IT Company Business Plan: Everything You Need to Know
An IT company business plan is a detailed plan for running and developing an information technology company. 3 min read
An IT company business plan is a detailed plan for running and developing an information technology company. It should describe all aspects of the business, including the company's description, product description, marketing strategy, and financial analysis, in a clear and precise manner.
Tips for Writing a Great Business Plan
A business plan should set out a clear roadmap for developing and expanding your business. Keep the following points in mind while writing a business plan:
- Test your idea. Avoid the temptation of jumping into a business merely on the basis of the success stories of others. Discuss your idea with prospective customers, vendors, and other people in the industry.
- Study the market to get an idea of industry trends, underlying challenges, and scope of future growth.
- Share your business plan with your employees. It is not something to be kept confidential.
- Write it in a clear and concise manner. Be specific, and cover all areas of the business.
- Put the plan to use; simply filing it away will not serve any purpose. Refer to it whenever possible.
- Revisit and revise your plan as your business grows.
Sections of a Business Plan
A typical business plan includes the following sections:
- Executive summary.
- Description of the company.
- Market research.
- Product or service description.
- Management structure.
- Sales and marketing strategy.
- Financial Analysis.
Benefits of Writing a Business Plan
Writing down your business plan offers the following benefits, among others:
- You get to understand your business better.
- It increases the chances of your business's success.
- It makes it easier to raise capital for a startup.
- Businesses with a written plan grow at a higher rate than those without any written plan.
Steps to Writing a Startup Business Plan
1. Have a Clear Objective
- Make sure that the company description is not ambiguous. The company description can also include your business's mission statement.
- State the reason for choosing that specific business. For example, you might be prompted to open a restaurant because no other restaurants in your area serve the cuisine your restaurant specializes in.
- Discuss the vision and growth prospects of your business in brief.
The summary should be concise and should not exceed four paragraphs.
2. Identify Your Target Market
Narrow down your target market based on geography, demography, psychology, and behavior. Your final target market may look like the following:
- Ages 20 to 35
- Living in the New York area
- With an annual income of $50,000-$60,000
- Who are interested in recycling and sustainable living
3. Analyze the Competition
Perform a competition analysis and differentiate your product accordingly. Price and quality can be two important differentiating factors. You should analyze the competition while simultaneously identifying your target market since both these steps are a part of the market research section of your business plan.
4. Prepare a Budget
Estimate the amount of funds you will need to start and operate the business. Many startups fail due to lack of funds. Preparing a budget beforehand will reduce this risk. When calculating your budget, consider all possible expenses, including the following:
- Cost of equipment.
- Money required for buying or leasing property.
- Legal fees.
- Employees' salaries.
- Insurance premiums.
- Inventory cost.
5. Make Financial Projections
Prepare financial projections based on the size of your target market and your expected market share. Include the expansion strategy in your projections. Keep your projections reasonable and make sure you cover three to five years of operations.
6. Define Your Business Structure
Define the organizational structure of your business. Having a clear hierarchy of power removes unnecessary doubt and debates over jobs and reporting positions. However, avoid adding too many layers in your business structure since that may create confusion and make the communication inefficient.
7. Prepare a Marketing Plan
A well-balanced marketing plan should include a strategy for customer acquisition in line with your target market, budget, and financial projections.
Some of the basic ideas for a marketing plan include the following:
- Launching a website.
- Being active on social media.
- Building a subscribers' list.
- Setting up loyalty programs.
8. Keep It Short and Simple
Although your business plan should be detailed and thorough, make it a point to keep it short and simple. Write it professionally and avoid using jargon. Proofread the plan for grammar, readability, and confusion.
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Technology Business Plan Template
AUG.16, 2016
Technology business plan for starting your own business
If there is one field that cannot go out of business within the foreseeable future, that is the technology business. This business has been growing vastly since the start of this century. There are more technology businesses out there than you can count, yet there is a capacity for new entrants in this field. We have made this business plan for technology company to tell you in sheer detail how to start a information technology company.
This business plan is based on the real-life example of MacArthur Tech Services. Let’s see how this business plan for investors can help you make money.
Executive Summary
2.1 the business.
MacArthur Tech Services will be a licensed and register tech services provider in Detroit. It will be owned by Maximilien MacArthur who is a former executive from Silicon Valley and has worked for many tech startups. This business plan for tech startup will help you learn from MacArthur’s experience.
2.2 Management of Technology Company
While explaining how to start a business solutions company, the first important thing to learn is the management of the company. You need to know the managemental hierarchy of the company for technology business setting up. This can also be used as a business plan for bank to get debt financing for your startup.
The management of MacArthur Tech Services will mainly be handled by MacArthur himself. He will hire experts of the field to help him with the operations.
2.3 Customers of Technology Company
As a semiconductor business plan is a vast field, we need to determine what customers would we be dealing. This includes the following:
- Domestic Customers
These customers will include the people who:
- Want to get their personal computers fixed.
- Want home-based tech and connectivity solutions.
- Want consultancy for domestic tech setups.
- Business Clients
These will be slightly bigger than the domestic customers and will include:
- Businesses looking for automation.
- Small businesses looking for digital bookkeeping and inventory management.
- Businesses looking for better connectivity solutions.
These customers will need:
- Campus management solutions.
- Labs and Library computer setups.
- Corporate Clients
These will be the biggest clients needing corporate-grade computing and tech solutions.
2.4 Business Target
The target will be to become the leading provider of tech services in all of North America.
Company Summary
3.1 company owner.
The owner of MacArthur Tech Services, Maximilien MacArthur is an expert of the field. He started his career with a repair shop and that makes and excellent computer repair business plan today. He then moved to the Silicon Valley where he made a information technology business plan example by starting a number of companies and making them successful.
3.2 Why the Technology Company is being started
MacArthur has an extensive knowledge of the field and has set many information technology business continuity plan example. He has helped a number of tech companies successful and is now planning to make a company of his own. He is passionate about it and knows where there is a gap in this business and how he can make a name in this field.
3.3 How the Technology Company will be started
Step1: Planning
The next thing we need to cover in this technology business plan sample is the planning to start the business. No business plan for tech company can be complete without that.
We need to plan everything from the number of employees and starting costs for the business to the perspective customers.
Step2: Branding
People trust the companies that have established brand names. In order to make it successful, our tech company will also establish a strong brand name. An impressive brand logo, moto, and color scheme will be chosen to make this happen.
Step3: Establish Your Office
MacArthur Tech Services will have an office in downtown Detroit from where all the services of the company will be extended to the customers.
Step4: Establish a Web Presence
No successful technology business plan can be complete without web presence. An extensive website will be launched for customers to interact with MacArthur Tech services.
Step5: Promote and Market
All possible ways of communication will be used to make sure that MacArthur Tech Services is known in all of Detroit and Michigan.
The next thing we need to address in this technology business plan template are the services we will be providing. As Technology is a vast field and no single company can reasonably cover all aspects of the industry, we’ll offer limited services in this information technology startup business plan and will try to be the best at them.
The main services provided by MacArthur Tech Services will include:
- Connectivity Solutions
This area of the services provided by MacArthur will include:
- Connectivity solutions for domestic clients.
- Connectivity solutions for offices and businesses.
- Connectivity solutions for corporate clients.
- Tech Equipment Supply
This segment of MacArthur’s services will include the supply of:
- Projectors.
- Tech Support Services
MacArthur Tech Services will offer support services for clients. These will include support for:
- Any major fault in tech setups.
- Break down of network or mainframes in offices.
- Personal and domestic tech support.
MacArthur Tech Services will maintain a 247 support helpline to provide support to people facing any tech problems.
- Tech Consultancy
For the clients that do not know where to start with tech, we’ll be giving tech consultancy services.
Marketing Analysis of Technology Business
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If you want to know how to write a business plan for a tech startup, the most important thing for that is the marketing analysis of the technical business plan sample. We are performing the marketing analysis of thebusiness plan technology description to make things easier for you. It is paramount to have an extensive knowledge of thetechnology business solutions if we want the business to be successful.
5.1 Market Trends
The tech market is one of the most fast-growing ones all over the globe. Most of the top companies and richest people in the world right now are associated with this field. We have seen a lot of tech companies come forth and be successful in this field.
The field is a bit saturated but there is always place for companies that come with the intention of providing exalted services in this industry.
5.2 Marketing Segmentation
The customers of our Tech business will be divided in the following market segments. Each segment will need its own specialized set of services.
5.2.1 Domestic Individual Customers
These will be the lowest paying customers but with the largest values. Anyone who needs an advice on what laptop to buy to anyone looking for someone to setup their workstation will fall into this category. We will provide all the services from the installation of Windows to replacing broken displays. Our focus will be to make repeat customers here.
5.2.2 Small Large Businesses
The businesses needing services for their tech setup will also be our customers. We will provide them with the services including automation, bookkeeping, inventory management, connectivity, and all other services that they might need.
5.2.3 Corporate Clients
This will be the market segment for us that will make the bulk of our income. They will be in a lesser number but will pay the premium prices. We will offer all the services from cloud computing to blockchain services and all other tech-related services a corporation might need.
5.2.4 Nonprofits
Lastly, we will offer discounted services to the nonprofit segment of the business to play our role in community development.
5.3 Business Target
- To become the leader in tech services in all of North America within 5 years.
- To provide impeccable tech services to our clients.
- To expand to at least 3 more states by the end of year 1.
- To start making an annual $368,000 in profit by the end of year 3.
5.4 Product Pricing
We will keep the product prices lower than the market average at the start. This will be done to attract the customers and once we have enough of them, we will move on to increase the prices.
Marketing Strategy
Now that we know the market we are going to enter, the next thing we need is a business plan in marketing to make sure we get our business objectives. As the Tech market is a saturated one, marketing is one of the decisive factors that can make any information technology business proposal template a success.
We need to be objective here and use any competitive leverage that we have in order for us to be successful and we’ll spare no expense in making sure that our technology startup company is successful.
6.1 Competitive Analysis
- The thing that will give us an edge on the competitors will be the extensive experience of the owner Mr. MacArthur.
- We will provide top-notch service and only the best of the best equipment to earn permanent recurring clients.
- We will provide a 247 support helpline, something that can make a huge difference and something not much of the competitors have.
6.2 Sales Strategy
- We’ll target the domestic, business, and corporate market at once to ensure that we get the best sales margin.
- We’ll provide a one-year warranty on all our products and services to make people rely on us and buy from us.
- Like all the best biotech business plans , we will offer huge discounts for the first two months.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan
The next thing needed for writing a business plan for a tech startup is the planning of the staff needed to efficiently run the company. This business plan for a web hosting and other tech services needs a number of skilled people to help it run properly. As the main focus of this business is to provide technical support and services, these employees will be the most valuable asset of the business.
7.1 Company Staff
- Maximilien MacArthur will be the owner and the CEO.
- 1 General Manager.
- 1 Operations Manager.
- 1 Liaison Manager.
- 5 Technicians.
- 2 Engineers.
- 5 Support Agents.
- 2 Drivers for the support Team.
- 2 Office Boys.
- 1 Receptionist.
- 1 Accountant.
7.2 Average Salary of Employees
Financial plan.
This last part of this business plan information technology company is the financial planning of the business. The recipe for a successful business is to decrease the expenses and increase the income of the setup. To make this happen, we have to have a clear idea of the expenses for starting and running the business. Let’s see a tentative budget planning for a technology business .
Here is a list of the expenditure for starting the business and running it until it starts generating enough revenue to fund itself and return profit.
- The cost of setting up the office.
- The cost of setting up an online presence.
- The cost of advertisement of the business.
- The salaries of the staff for the starting year.
- The cost of overheads included in running the business.
8.1 Important Assumptions
8.2 break-even analysis.
8.3 Projected Profit and Loss
8.3.1 profit monthly.
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
8.5 Projected Balance Sheet
8.6 business ratios.
Download technology business plan sample in pdf
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25 Tech Business Ideas for 2022
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .
If you’re looking to start a business with high earning potential, you’ve probably looked into some tech business ideas.
And why wouldn’t you? In 2019, the estimated economic output of the technology industry was $1.8 trillion, comprising over 10% of the national economy, according to CompTIA. What’s more, the average successful startup exit (via either acquisition or IPO) has sat at $242.9 million since 2007.
However, for every successful startup exit, there are hundreds if not thousands of startups that have failed. So if you’re an entrepreneur hoping to hit it big in the technology sector, you need to start with a strong tech business idea.
In an industry defined by innovation and disruption, what constitutes a “good” tech business idea is constantly changing. That’s why we’ve compiled a list of tech business ideas that are poised for extreme growth in the coming years.
What is a tech business?
Tech businesses provide products and services that have applications across multiple industries — but at their core, they pertain to the research, development and distribution of technology-based goods. This includes businesses that manufacture electronics (like Apple), create software (like Salesforce), provide services relating to information technology (like Google) and more.
The best part about our technology business ideas is that they don’t require a lot of overhead—you can start small and grow over time. However, you will need some level of technical knowledge to be able to successfully start a business in the industry. If you don’t have any tech experience, consider starting with a coding bootcamp.
Here are some of the top tech business ideas, including some recommendations from tech entrepreneurs themselves.
1. Food tech
Our first recommendation comes from Phil Strazzulla, founder of HR software company SelectSoftware. Strazzulla sees the food tech sector as a major growth industry in the coming years:
“Companies like Beyond Meat are just the beginning of businesses engineering eco-friendly and healthy food that is as delicious as our current diet. The science is now there, and the market for next-generation food is literally in the trillions of dollars, and it grows just as quickly as the world's population.”
2. Web design
One tech business idea that will never go out of style is website design. That’s because pretty much every business needs a professional-looking website in order to appear reputable and build their brand.
Web design encompasses a range of different services, including graphic design, interface design, copywriting, UX design, and SEO. According to IBISWorld , the web design business has grown at a rate of 6.6% over the last five years, and generated $38 billion in revenue in 2019, meaning you can rely on there being a market for this tech business idea for years to come.
3. Extended reality
Extended reality technology encompasses both augmented reality, or AR, and virtual reality, or VR, technologies. Kenny Trinh, editor of tech review publication Net Books News, sees extended reality technology proliferating in the coming years.
"In 2020, we’ll see more and more businesses applying extended reality to their brands to stand out from the competition and deliver a better customer experience,” says Trinh. “In fact, some businesses have been doing that already.”
Trinh points to the eco-friendly water packaging project W-in-a-Box, which uses AR to further explain the benefits of their product.
4. Robotics
Robotics is a bit of a catch-all term that encompasses mechanical engineering, electronic engineering, information engineering, computer science and other related disciplines. The goal of robotics is to create machines that can move and react to sensory input. According to Statista , this industry is expected to grow from $80 billion in annual revenue in 2019 to over $200 billion in annual revenue by 2025.
5. Customer experience management, or CXM
Ian Kelly, VP of operations for a CBD oil company called NuLeaf, believes customer experience management platforms like ZenDesk will soon make customer relationship management platforms, or CRMs, obsolete.
"While a CRM can help you manage customer details, a CXM unifies all sales, marketing and customer service conversations into a single silo so that your customers are treated like the loyal fan-base they are,” says Kelly. “No more hitting your customer over the head with repeat promos, selling them on services/products they already have or letting them slip through the cracks when they've bought and never been properly onboarded.”
6. Influencer marketing
Influencer marketing is an industry enabled by social media platforms like Instagram involving endorsements and product placements from individuals or organizations who possess a certain level of expertise or social influence in their respective fields. While not just anyone can be an influencer, if you possess some level of unique knowledge or a lot of charisma, you can launch a business by gathering a social media following and hiring an influencer marketing agency to connect you with brands.
On the flip side, you can also launch a business focused on connecting brands with the right influencers for their products and mission.
7. Content automation
With content and social media becoming an ever-growing part of many businesses’ marketing plans, Gleb Myrko, an analyst at the market research firm Freedonia Group, believes content automation software presents a great opportunity for tech entrepreneurs.
"Businesses today have accounts on all different social media channels like Instagram, Facebook, TikTok, etc. All of these channels require different approaches to content planning, content production and account management and analytics,” says Myrko. “There’s still not a widely applied tool for omnichannel management, promotion and analytics for the most popular social media. We need an all-in-one hub where marketers can analyze data/performance, as well as manage and promote their accounts on different social media channels in a more centralized, convenient and effective manner.”
8. Artificial intelligence
The term “artificial intelligence" is used to describe technologies pertaining to machine learning, computer vision, natural language processing and more. Although artificial intelligence is a technology that has been around for quite some time, as it becomes increasingly sophisticated, its market potential is growing as well.
Statista reports that the industry grew by 154% in 2019 alone—making it a great tech sector to build a business around.
9. Podcasting
If you’ve been paying attention to innovations in content over the past few years, you’re probably aware of the exploding popularity of podcasts. Today, 51% of the U.S. population has listened to a podcast, and podcaster Dre Baldwin sees podcasting’s prospects only increasing in the coming years.
“Entrepreneurs need to start building their podcast content library ASAP,” Baldwin says. “More and more people are consuming media on the go; audiobooks and podcasts are at the forefront of this. Any entrepreneur or business entity that wants the attention of consumers needs to be in their ears, literally.”
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10. Streaming service
Services like Netflix and Disney+ get most of the attention when it comes to streaming services, but there is plenty of opportunity to start a streaming service for more niche content. For example, you can create a streaming service where users can upload instructional videos or a streaming service designed specifically for children’s content. You could also develop a platform for live streaming (like Twitch) or streaming music (like Spotify).
The global outlook on the streaming service industry is overwhelmingly positive. In 2019, streaming services generated $25 billion in revenue. By 2025, that number is expected to rise to $30 billion, according to Statista.
11. 3D printing
One of the more exciting technologies developed during the 2010s is 3D printing, which allows users to build a three-dimensional object from a computer-aided design model. Shayne Sherman, CEO of TechLoris, believes 3D printing will have increased importance in the next decade as the technology continues to become more sophisticated.
"There will always be the need for production companies, but just as the advent of the assembly line changed production, so too has 3D printing,” Sherman says. “The ability to manufacture whole components in single pieces has created a serious demand, especially in the medical fields. This demand means that 3D printing companies are set to grow exponentially, and if you can get into the business, it's a solid choice for the coming years.”
12. E-commerce
E-commerce is another technology that has been around for a while, but still has growth potential. Over the last year, Statista reports that e-commerce sales grew from $500 billion to nearly $550 billion.
If you have a unique idea for an e-commerce store, you can launch your own e-commerce business from the comfort of your home. No product in mind? Not to worry; dropshipping allows you to start an e-commerce business with products you are not responsible for warehousing or shipping.
If you want to grab a bigger share of the market, you could also take the time to develop your own e-commerce platform or marketplace. Just keep in mind that the e-commerce platform space is already dominated by giants like Shopify and Amazon. Therefore, if you want to start your own e-commerce platform, we suggest focusing on a niche market.
13. Portable charging devices
Mobile devices go with us everywhere nowadays, but having your phone battery die on you while you’re out is still a far too common problem. That’s what’s driving the growth of the portable phone charging industry.
According to data published by BCC Research, the portable charging device market is expected to grow by 6.6% year over year from 2017 to 2022. Growth is driven by the fact that many newer phone models have lower battery capacity.
"Growing urbanization, rising disposable income and increasing mobile phone penetration will boost the mobile charger market around the globe,” according to the report’s author Mohammed Javed. “Increasing penetration of high-specification electronic gadgets/devices that drain batteries at faster rates will further boost the mobile charger market in the near future.”
14. Publishing e-books
An e-book is a book made available in digital form. If you’re a writer, there is a growing market for books published online. Businesses are creating e-books as a way to market their brand, and aspiring authors of fiction and nonfiction publish e-books as a way to reach more customers and grow their readership.
In 2019 alone, revenue generated from e-books topped $1.3 billion, and that number will rise to $1.6 billion by 2024, Statista reports.
15. Fitness tech
Technology has applications in nearly every industry — including the fitness industry. We’ve already seen new technologies like FitBit, Peloton and Strava change how people exercise, and more innovation is on the horizon. That’s the belief of Jared Weitz, founder of United Capital Source Inc.
"Fitness technology is an area of continued growth. Whether it is creating products like fitness trackers, wireless earbuds or smartwatches that have multiple functions, the market is constantly seeking new gear and technology,” Weitz says. “This niche is expanding from tangible fitness products to the apps and data that marry the physical and digital together. Combine a high-tech device with an app related to exercise or diet and you will be setting yourself up for success in 2020 and beyond.”
16. Online teaching
Do you know a foreign language? Can you build a treehouse? Do you cook really good soup? Then you can make money sharing your knowledge and expertise online. Thanks to services like Teachable and Udemy, teachers can now build their own online classes, sell them to students and teach the entire class online. If you’re a good teacher and know how to market your class, you can earn a livable wage by teaching your skills to others through the internet.
17. Mobile application development
Every business needs a website. And the way the market is trending, soon every business will also need their own mobile app. This presents an exciting opportunity for individuals skilled in app development. Successful companies like Braze and Leanplum have built their entire business around developing apps for others.
There is really an endless supply of app ideas. There were 194 billion app downloads in 2018 alone, and that number is only expected to climb. So strike while the iron is hot.
18. Search engine optimization consultant
Google is still an essential part of many business’s marketing strategies. They need to be able to appear as a top result in Google Search for keywords related to their business. That means they need someone who is skilled in search engine optimization, or SEO, to help them. Some businesses hire people to perform SEO in-house, but many organizations also work with freelancers or third-party agencies to implement an SEO strategy. If you can train yourself in SEO and keep up with its ever-changing trends, you can start a business providing SEO services to other organizations.
19. Social media consultant
If you’re not into SEO, but are good on social media, you can work with businesses to help them generate likes, shares, retweets, followers, comments, clicks and more as a social media marketer . In this role, you’ll consult with companies and help them manage their social profiles, spread content across the web and build their brand.
What’s more, the startup cost to be a social media marketer is minimal and can be done from your own home. Just be sure to buff up your social media skills and keep up with the latest trends and platforms.
20. Drone videography
If you own a drone and know how to use a camera, there’s a market for your services. Commercial and residential real estate agents are increasingly using aerial shots as a way to market their buildings and property. You can find real estate agents in your area using platforms like Zillow. Then reach out and offer up your services. Other industries, such as agriculture, events and more have uses for drones, as well.
21. Cybersecurity or IT consulting
Businesses today are increasingly threatened by cyberattacks, making the need for IT consultants greater than ever. As an IT consultant, you can help businesses evaluate their security systems, run tests and offer advice on how they can better protect themselves from cyberhackers.
More generally, an IT consultant can help businesses set up their computers and troubleshoot any general issues.
22. Venture capitalist
A vast majority of tech startups are backed by venture funding. If you have an interest in the tech space, but don’t have any technical knowledge yourself, you can try raising some money and becoming a venture capitalist or angel investor.
Similar to being an influencer, a venture capitalist isn’t something you can simply become overnight. That’s because being a venture capitalist requires allowing others to trust you with their money.
You need to start small and make some solid investments in order to make a name for yourself. Many independent investors join a VC fund for a while before striking off and starting their own fund.
23. Startup incubator
Another way to get involved in the tech world without having a lot of technical experience is to create your own startup incubator. The job of an incubator is to help startups plan and launch their business successfully. Services provided may include management training, office space and mentorship opportunities.
Of course, you’ll need some background in business to be able to successfully launch an incubator. The cost of creating your own incubator and attracting founders may also be difficult to muster. Many incubators start small and grow over time once they have successfully helped multiple startups enter the market.
24. Antivirus developer
An antivirus developer is a highly specific sort of tech business idea that pertains to the creation of antivirus software that can help businesses protect critical data. Antivirus software can be created using a variety of different programming languages. The overall goal of an antivirus is to detect and remove malware before it impacts a computer’s systems. Start networking with local businesses in your area to find out if there's a need for this service.
25. Domain name broker
Being a domain name broker is similar to being a stockbroker, except instead of stocks, you sell domain names. To get started you need a little capital to buy some domain names. You’ll then need to educate yourself so that you’ll be able to predict domain name requirements in the future.
So like most of the businesses on this list, it will take some work to get started. But everyone needs a domain name, so there will always be a market for this service.
The bottom line
We hope our list has helped you figure out which tech business idea is the right fit for your skills and interests. Regardless of the route you choose to take, you’ll need to write a business plan, create a business entity and maybe take out a business loan to get your startup off the ground.
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Information Technology Business Plan
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Financial plan investor-ready personnel plan .">.
Although we are treating the business as a start-up company, the financial plan is solidly based on past performance. We have taken actual SIOT P&L income and expenses from the past three years, and eliminated corporate overhead expenses such as warehouse and administrative costs, inventory penalties, and corporate nominal interest. We then projected income based on actual past performance, and factored back in the revenue base that was relocated to Honolulu over the past two years (mainly service and supplies).
We approached the financial planning from a conservative standpoint, and based those numbers on achievable gross margins. Also, our actual interest and tax rates will most likely be lower than the assumed rates due to our being structured as an employee-owned corporation (ESOT).
7.1 Important Assumptions
The financial plan depends on important assumptions, most of which are shown in Table 7.1. As mentioned previously, we assumed interest and tax rates based on a “worst case” scenario, and these will be adjusted once we have finalized the initial funding and establish the ESOT. We have also assumed our personnel burden at 30% of payroll in order to allow for above-average benefits for our employees. As we shop around for benefits vendors, this assumption will be subject to revision as well.
Other key business assumptions are:
- We assume access to the start-up funding necessary to re-shape and re-build the company, and to provide adequate initial capitalization.
7.2 Key Financial Indicators
As shown in the Benchmarks chart below, our key financial indicators are:
- Inventory Turnover: We will maintain just-in-time inventory levels, or 11 turns per year. This will require accurate sales forecasting, and working closely with our manufacturers. We have already begun this process under SIOT, and the Neighbor Island inventory levels are well below previous years.
7.3 Break-even Analysis
For our break-even analysis, we assume running costs which include our full payroll, rent, and utilities, and an estimation of other running costs. Payroll alone, at present, is about $65,500 per month (including benefits and taxes).
We will monitor gross margins very closely, and maintain them at a midrange percentage by taking advantage of all promotions and discounts offered by our manufacturers. Canon USA has tentatively agreed to offer us “end column” pricing as a new dealer incentive.
The chart shows what we need to sell per month to break even, according to these assumptions. This is about 78% of our projected sales for our first year, and is well below what we have achieved annually over the past three years under more adverse operating conditions.
7.4 Projected Profit and Loss
Our Pro Forma Profit and Loss statement was constructed from a conservative point-of-view, and is based in large part on past performance. By strengthening our service position, and rebuilding our customer relationships, we will widen our customer base and increase sales.
Month-to-month assumptions for profit and loss are included in the appendix.
7.5 Projected Cash Flow
Because we are treating the new company as a start-up, the cash flow for FY2002 is somewhat exaggerated by the instant influx of new capital. Subsequent years however show a healthy growth in cash flow, mainly due to the short 60-month repayment of the start-up loan and increased sales.
7.6 Projected Balance Sheet
The Projected Balance Sheet is quite solid. We do not project any trouble meeting our debt obligations as long as we achieve our specific objectives.
7.7 Business Ratios
The following table shows our main business ratios, and is compared to national averages. Our SIC industry class is currently: Office equipment, nec – 5044.99.
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- IT Business Plan
Article Index:
2.0 Company Description
3.0 products, 4.0 market analysis, 5.0 marketing strategy and implementation, 6.0 organization and management, 7.0 financial plan, 1.0 executive summary.
Prime contractors who receive job orders from the federal government often hire other companies to help ensure the fulfillment of the contract. If the government contract is greater than $650,000, the federal government mandates the prime contractor to provide a plan for subcontracting a portion of the work to small businesses. Information Technology Solutions (‘ITS’), is an information technology subcontractor that specializes in database management and application development support. ITS strives to provide the high quality technological business solutions with a concentrated focus on the energy and defense sector. ITS, established in 2010, is located in Charlotte, North Carolina. The company currently has five full–time staff members with expansion plans to add five more within the next three years.
ITS was formed in 2010 by Sara Jayne when she was downsized from Cap Gemini. Ms. Jayne has grown the company five-fold with the addition of five new employees and anticipates need for five more within the next three years. With over 20 years experience Ms. Jayne has successfully subcontracted with 20+ local contracts and has a pipeline of 10 more.
ITS focuses its efforts in two service areas: database and application development and support. ITS strives to foster and maintain solid relationships with its clients, fine tune its services, and continue to develop innovative business solutions that will improve the way their clients do business. Due to its small size, ITS has the unique ability to act quickly and easily meets or beats its deadlines. Its main limitation is its limited staff resources. ITS plans to expand personnel over the next three years to meet achieve a balance of supply and demand.
The purpose of this plan is to create a strategy for ITS that will increase its revenues annually by 20%, and simultaneously grow assets 25%. Overall, this business plan will provide an in–depth understanding of the company, along with a plan for growth in the future.
1.1 Business Objectives
The primary objectives of ITS are:
- Provide custom solutions with outstanding customer service– which enhances its customer’s efficiency and secures ITS long relationship via contracts and recurring projects.
- Grow company in staffing to accommodate the growing need for services by offering a dynamic work environment with flexible hours, a commitment to ongoing education, and offer bonuses to commensurate with performance and earnings.
- Focus on delivering contracts. ITS is small enough to turn ‘on a dime’ compared to its larger peers burdened with ‘red tape’ requirements. ITS has a can do attitude and is happy to get the deliverables in the most efficient manner to its clients.
1.2 Mission Statement
It is ITS mission to empower prime government contractors to meet their objectives. ITS strives to foster and maintain positive relationships with each and every client (both internal and external), by providing cutting edge technology services at reasonable and competitive prices.
1.3 Guiding Principles
Be Dedicated. Every day, consistency is key. ITS is dedicated to each and every job – down to the very last detail. It is this tenacity, attention and focus to detail on each and every project that defines the success of this organization.
Be Dependable. ITS believes that a commitment to meet all its obligations punctually, honestly and honorably. ITS believes that if you are the “go to” business, you’ll never have to worry about having to generate extra leads or word-of-mouth referrals.
Give and You Shall Receive. Give the thing you want most and you’ll be amazed at what you get in return. ITS firmly believes in this philosophy and that its efforts can be multiplied for the greater good of the company, its customers and the community.
1.4 Keys to Success
ITS considers the following factors to be the primary contributors of business success:
- Diversification of product lines and customer base
- A recurring revenue base
- Management with rounded skill set in business growth and marketing
- Sound financial management
ITS strives to foster and grow empowered relationships with prime government contractors. While small in size, the ITS team of experts has collectively has over 60 years experience in computer problem solving and solutions. With its corporate office located at 1327 S Mint Street in, Charlotte, North Carolina, ITS easily targets local prime government contractors. ITS is established as a WOSB, that is a Woman Owned Small Business as classified by the Small Business Administration.
ITS seeks long term contracts with a focus on database management and application and development. Rather than casting a broad net, ITS targets two distinct government sectors: energy and healthcare. By specifically targeting these areas of interest, ITS is the industry expert and can truly not only understand its customers’ needs but can identify solutions that are just as dynamic as the technologies and industries themselves. In turn, it is ITS belief that its customers will return time and time again for additional projects and long term contracts. ITS has future plans for some diversification and in the next ten year horizon plans to diversify its markets by incorporating the defense industry as well. In addition, the company plans to ultimately become a prime government contractor and at that time will also hire a full-time RFP (Request for Proposal) writer to win the contracts.
ITS believes that because it is already established as a WOSB, this further enhances its position in the government contract market. The federal government has both prime contracting and subcontracting goals for small businesses. More specifically, 23% of federal prime contract dollars are currently awarded to small businesses, with individual prime and subcontracting goals for certain identified small business groups. Further, the federal government must award 5% of its prime and subcontract dollars to WOSBs.
2.1 Ownership
Originally formed as a sole proprietorship, ITS recently changed its status to a Chapter S Corporation. ITS is wholly owned by Sara Jayne. Sara Jayne is the President, CEO and CFO. Ms. Jayne graduated from Duke University with a degree in Sales. She is also the Project Manager for all government subcontracts. It is her proven extreme attention to detail and commitment to these contracts that gets the awards time and time again. She has ten years of experience in the technology consulting industry as a Network Engineer and ten years of experience as a Database Administrator with Cap Gemini. Ms. Jayne is a Microsoft Certified Systems Engineer. She is also 6 Sigma certified, meaning she has received extensive training in business process improvement.
2.2 Legal Form
ITS is a Chapter S Corporation formed in 2010 doing business in the State of North Carolina.
2.3 Start-Up Summary
N/A – ITS has been operational for two years.
2.4 Location and Facilities
The corporate office of ITS is located in the heart of downtown Charlotte at 1327 S Mint Street, Charlotte, North Carolina. The city has a population of over 11,555 according to the 2010 U.S. Census Report. The residential population in the immediate area is comprised of a mixture of single family and multi-family housing. The median household income is $38,895. Major employers include Bank of America, Wells Fargo, U.S. Airways, Carolinas Healthcare System, and Duke Energy.
Charlotte has a strong technology base and unlike it peers in other technology hubs, the lower cost of living and warmer climate make Charlotte the ideal location to find (and employ) talent.
The company leases 1,200 square feet on the third floor of a 34,000 square foot high rise office building. According to Charlotte’s Chamber of commerce, the area comprising of zip code of 28202 employs some of the largest employee concentrations in the greater Charlotte MSA and is comprised of 2,388 establishments and employs a total of 51,825. Of these employees, the majority or 18,688 work in the service industry while 12,717 work in Finance/Insurance/ Real estate field. 4,560 are retail employees and 3,164 are employed in manufacturing. With easy access to Interstate 77 and U S Highway 74, the location provides easy access in the greater Mecklenburg County.
3.1 Products/Services Descriptions
ITS partners with its prime contractors and assures the production of quality deliverables from each subcontract assigned, assuring the development of long term business relationships. ITS provides the following services:
Analysis of the current technical environment, Analysis of business requirements relevant to the application architecture, Architecture definition, Application software requirements analysis, Application software testing, System level integration and testing
3.2 Competitive Comparison
The zip code 28202 is home to 15 information technology companies in addition to ITS. Because ITS is not limited to its physical location and focuses its source of business on servicing government contracts, the majority of these local companies do not compete directly with ITS.
However, due to their proximity to ITS and their similar background they are mentioned here:
Vialogix Communications Inc 501 N College St Established in 1996, and operated by Robert Norris. The company has 20 employees and annual revenues of $3.9 million. With a primarily focus in building websites. Vialogix does not directly compete with ITS. Vialogix primarily builds web sites, intranets, extranets, web-enabled applications, wireless applications and databases.
Data Recovery Charlotte 401 S Tryon St # 10 With 7 offices in the Charlotte region, 18 employees and annual revenues of $3.5 million, Data Recovery competes indirectly with ITS. They are primarily computer forensic analysis and recover data that has been corrupted or intentionally deleted. They can identify how a ‘hacker’ got past the security checks and if fortunate enough, identify the individual who caused the damages.
William Ives Consulting 320 S Tryon St Ste 213 The company has 18 employees and annual revenue of $2.7 million. The company has a primary focus on legal industry; however, they also provide automation with the way the clients chose to do business. They utilize groupware, document management and fax tools network platforms such as Microsoft Windows NT and Novell Netware.
Refresh Technologies 201 W Morehead St Ste 400 The company has 8 employees and annual revenues of $1.5 million. This is a newly established company similar to ITS. The key principal, Fae Schaefer, has 10 years experience, comparable to Ms. Jayne’s. Refresh Technologies focuses more on companies utilizing her contractors to free up their employee resource pool. Her company provides comparable services, by offering services remotely or within a hosted environment, data backup & recovery, business continuity, server and storage monitoring and management, managed security, email management, application and database monitoring and managed network services. The company also reportedly saves its customers an average of 40% when compared to its peers but this information could not be verified publicly.
3.3 Product/Service Sourcing
ITS’ key to success thus far has been the creation of clear, unambiguous subcontracts. Each subcontract has a legally binding, written contract that defines the following items:
- The legal names of the parties involved in the contract will be specified.
- The responsibilities and authorities of each party to the contract,
- A clear definition of the deliverables and minimum content to be provided by the subcontractor,
- A clear definition of the services to be provided by the subcontractor,
- Any and all constraints imposed on the subcontractor by the prime contractor, such as schedule constraints, budget constraints, specific tools to be used, and
- A clear statement of requirements for quality of deliverables and services including the requirement to allow independent quality inspections of materials and processes.
- Appropriate terms and conditions which will be imposed on both the prime contractor and the subcontractor will be identified.
- The acceptance process will be clearly identified.
3.4 Inventory Management
ITS is primarily a service based company which carries no inventory.
3.5 Warehousing and Fulfillment
Ms. Jayne is the Project Manager and delegates the specific tasks to be completed. Each subcontract, although tailored for each client generally follows these standard guidelines:
Define Scope The first step in the preparation of the Project Plan is the creation of the narrative description of the project. The narrative establishes the customer’s ultimate system objectives and provides frame of reference for reviewing the balance of the plan.
Define Deliverable The next step in the process is the definition of the deliverables. The deliverables should be defined in as much detail as possible. A well defined deliverable ensures a common understanding of what is to be delivered and establishes realistic expectations. If one of the deliverables is an operational system, a complete functional specification should be included. This will explicitly define the system for both the users and for the designers. This is important since it is the basis for measuring the success of the system. It also forces the users to ensure that all of the requirements have been included. Simply put, if the Project Plan does not define it, it will not be in the end-product.
Define the Methodology Determine how the deliverables will be acquired or produced. Refine the methodology, whether it be the customer’s or ITS’, and make any modifications necessary due to specific project needs.
Establish Project Organization The next step in the preparation of the Project Plan is the creation of a Project Organization Chart. A project will not be successful unless there is a clear understanding by all parties of who the deliverer and acceptor are. The completion and circulation of the Project Organization Chart will ensure that this takes place. The chart also identifies the other key project participants, the customer, and the project team members.
3.6 Products/Services
ITS’ current focus is twofold: database management and application development.
Database Management In general, the government sectors require old broken outdated software systems to be upgraded and stagnant legacy systems to be streamlined and operating more efficiently. Operating efficiency has become vital as the government seeks to get its arms around the largest databases in the country. The U.S. government’s information systems are clogged with a variety of old and disparate sources. Legacy systems, databases, and data warehouses are ‘clogging’ the systems As these sources and data volumes multiply, over time, it becomes to critical to incorporate, regiment and apply rules of order to avoid further data ‘glut’.
By creating a comprehensive data model, ITS offers insight into organizational needs and provides the roadmap for successful integration. Ms. Jayne leads teams with specialists in business process and data analysis, system design and integration, and business intelligence to develop solutions that deliver results.
Application Development Application development, the creation of programs that perform functions for software and hardware, are in great demand for government entities. ITS can create many applications for example, that run behind-the-scenes for tracking inventory, maintaining account balances and billing clients automatically.
Once, applications focused primarily on functionality. Today, the most complex applications focus on elements such as speed, compatibility, security, scalability and customer experience. ITS strives to create the fastest and the most user-friendly applications to meet these needs.
Future Plans ITS has future plans to expand into government contracts, and expects to hire a full-time proposal writer. Additional plans include diversification into other popular government contracting sectors such as defense. Another goal is secure a recurring base, consulting, revenue to serve as a cushion against sales declines when the spending environment deteriorates. Long-term contracts provide revenue continuity: Contracts are often five to 10 years long, and are rarely broken.
The global IT consulting & other services market had total revenue of $515.6 billion in 2010, representing a compound annual growth rate (CAGR) of 3.9% for the period spanning 2006-2010. The integration & development services segment was the markets most lucrative in 2010, with total revenues of $254.2 billion, equivalent to 49.3% of the market’s overall value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 2.7% for the five-year period 2010-2015, which is expected to drive the market to a value of $587.8 billion by the end of 2015. (Data Monitor).
4.1 Industry Analysis
The U.S. information technology services industry includes about 100,000 companies with combined annual revenue of about $290 billion. Major companies include Computer Sciences Corporation (CSC), Unisys, and the technology consulting arms of IBM and Hewlett-Packard. The computer facilities management segment of the industry is also highly concentrated: the 50 largest companies generate about 80 percent of revenue. The rest of the industry is concentrated: the 50 largest companies account for about 50 percent of revenue.
Worldwide IT services revenue is about $800 billion. Leading exporters of computer and technology services include India, the US, Israel, and China, according to the World Trade Organization. Major companies based outside the US include Fujitsu (Japan), T-Systems International (a subsidiary of Germany’s Deutsche Telekom), and Cap Gemini (France). (First Research).
The market is fragmented with small players competing alongside large, multinational companies. Buyers range in size: larger buyers, with greater financial muscle, exert more buyer power. Brand recognition is likely to be of significant importance to customers and they therefore often look to a reputable company for services. Entry to this market is increasingly achieved through the diversification of operations by existing companies from other fields. Rivalry between market players is alleviated to an extent with larger players operating in other markets or offering their services to a range of industries. Skilled employees, as suppliers of technical knowledge and expertise, are an important input. On the other hand, some companies show some backwards integration with their own hardware and software capabilities, which reduces their reliance on external suppliers. (Data Monitor)
IBM Global Services is the leading player in the global IT consulting & other services market, generating a6.6% share of the market’s value. Hewlett-Packard Company accounts for a further 4.5% of the market. (Data Monitor)
4.1.1 Market Size
According to the U.S. General Services Administration the Top 100 Contractors Report is a list developed annually and tracks U.S. federal government procurement. The Top 100 Contractors Report for Fiscal Year 2010 lists contracts totaling $284.7 billion (2009: $294.6 billion). In the same period, small business contracts totaled $97.9 billion (2009: $96.8 billion). In Fiscal Year 2011, the top five departments by dollars obligated were the Department of Defense ($373.6 billion), Department of Energy ($25.1 billion), Health and Human Services ($19.3 billion), Department of Veteran Affairs ($17.4 billion), and NASA ($15.4 billion).
4.1.2 Industry Participants
The subcontractor market is flooded industry participants.
ITS’s primary competitors can be virtually almost business. In fact, any entity meeting the general requirements is a perspective competitor. The criterion to subcontract with the federal government is relatively simple. In order to do so, qualified candidates must 1) Obtain a small business certification from the U.S. Small Business Administration (SBA). The type of certification depends on the ownership, location or revenue of the subject business. Business certifications include HUB Zone, 8(a), small, women-owned, veteran-owned, Native American, Alaskan-owned and Native Hawaiian-owned. 2) The company must then register with the Central Contractor Registration, and complete an online training course. 3) The company must, be in business for at least two years prior to and apply through the Small Business Administration (“SBA”).
4.1.3 Main Competitors
ITS does not have local competitors, however, due to their proximity to ITS and their similar backgrounds they are mentioned here:
Vialogix Communications Inc 501 N College St Established in 1996, and operated by Robert Norris. The company has 20 employees and annual revenues of $3.9 million. With a primarily focus in building websites Vialogix does not directly compete with ITS. Vialogix primarily builds web sites, intranets, extranets, Web-enabled applications, wireless applications and databases.
4.1.4 Market Segments
The US Government is as diverse as the U.S. secondly itself. However, with a few exceptions, the majority of the U.S. government contracts are awarded to the following industries: aerospace, telecom, automotive, defense, insurance and social service, energy and life sciences, banking/finance, rail/naval, distribution/sales assistance, aeronautics, space, and utilities.
4.2 Market Tests
While working as an independent consultant, Ms. Jayne focused her company’s efforts on two highly sought after government contract areas: energy and healthcare. She began contracting for some of Charlotte’s lager energy provides, providing them with IT services. She currently has 30 customers including: Duke Energy, Toshiba America Nuclear Energy, Westinghouse Electric, Power Group, and The Shaw Group.
To date ITS has been awarded two government subcontracts: 1) with the Betchel Group, and 2) with General Electric. Both projects are currently underway with all milestones to date meeting/exceeding expectations. Both prime contractors had a mandatory requirement to subcontract a portion of their work. The fact that ITS is a WOSB, combined with its proven track record, and ability to move quickly on short notice, made the award process that much more appealing to the conglomerates.
4.3 Target Market Segment Strategy
ITS’ strategy is twofold: work directly with prime government contractors (such as Duke Energy) and obtain contracts indirectly (word of mouth) such as the their experience with Betchel.
4.3.1 Market Needs
In general, the government sectors require old broken outdated software systems to be upgraded and stagnant legacy systems to be streamlined and operating more efficiently. Operating efficiency has become vital as the government seeks to get its arms around the largest databases in the country. The U.S. government’s information systems are clogged with a variety of old and disparate sources. Legacy systems, databases, and data warehouses are ‘clogging’ the systems As these sources and data volumes multiply, over time, it becomes to critical to incorporate, regiment and apply rules of order to avoid further data ‘glut’.
4.3.2 Market Trends
Many areas of high technology are highly competitive and are subject to rapid, unanticipated changes. The dynamic business climate poses significant challenges requiring companies to adapt rapidly to evolving conditions. In addition, during sharp industry declines such as 2000-2001 or 2008-2009, cash balances can be depleted very rapidly. (Standard and Poor’s)
While the timing of technological change and obsolescence is difficult to predict, rapidly changing technologies with marked potential for materially eroding companies’ business and financial profiles are one of the few constants in the high technology sector. Cyclicality and technological change can create sharp declines and significant shifts in competitive dynamics, customer requirements, and buying patterns, which can rapidly reshape industry subsectors. The ongoing transformation of the data storage and semiconductor industry segments is an example of these market dynamics at work. (Standard and Poor’s)
High technology companies’ earnings and cash flows are subject to cyclicality created by the business and/or consumer cycles. In many developed countries in recent years, volatility in business/corporate sector demand has tended to be markedly greater than cyclicality in the consumer economy. Historical recessions have largely been business-driven, rather than consumer-led, but in the current recession, demand is down sharply across both consumer and business markets. (Standard and Poor’s)
Consolidation remains a long-term trend in many high technology subsectors as growth rates have slowed. Managements of larger companies view their subsidiaries as components of a portfolio that should be actively managed, a strategy generating ongoing acquisition and divestment activity. Customers want integrated solutions; in response, high technology companies are broadening their offerings through acquisitions. (Standard and Poor’s)
4.3.3 Market Growth
While prime contractors saw a decline in growth when comparing fiscal year 2010 to fiscal year 2009, sub-prime contractors actually grew over the same time period. Sub-prime contracts were reported to be $96.8 billion in year 2009 compared to $97.9 billion in 2010 representing a 1.12% increase.
Based on the growth in this market and the current government mandates to award to small businesses, it is ITS’ contention that annual grown of 20% in revenues and 25% in assets does not appear unreasonable. Further this aligns ITS with its peers of similar size which enjoy the same growth. ITS will achieve this growth with the addition of more staffing. With the addition of billable hours and the built in cushion ITS has in its billable hours, the company feels these are sound achievable financial goals. (For more information regarding this ‘cushion’ please refer to the financial analysis portion of this business plan).
4.4 Positioning
ITS has set itself apart from its competitors by 1) its narrow and targeted market focus (energy and defense) and by completely understanding industry trends. ITS is truly the market expert. 2) ITS’ extreme attention to detail in its subcontracts and project planning sets them apart from their peers. 3) Because of its small size, ITS has the ability to not only meet /exceed deadlines, but they can adapt quickly as well and on short notice. 4) All these factors lead to cost savings which in turn are passed on to their clients.
In order to grow revenues 20% annually and to keep pace with peers, ITS must sell $152,000 in new revenue or put another way, bill an additional 1,344 hours annually. ITS has built in cushions into its pricing model, which easily allows for just such an increase.
For example in proforma Year One, ITS estimates that it will bill 2,794 hours in billable revenue. (2,794 hours * $113.07 hourly rate =$315,917 in revenues). However, with a staff of 5 employees working 40 hours a week, the company has the potential for 9,600 hours annually. The additional burden of 1,344 hours could easily be absorbed by current staff. ITS, however, chose to keep a conservative estimate by basing the projected income and expenses similar to its peers.
5.1 SWOT Analysis
5.1.1 strengths.
- By utilizing its lean experienced staff, focusing on specific target markets and providing detailed project outlines, ITS provides high end consulting services at a reasonable price.
- ITS is flexible, able to ‘turn on a dime’ and meet / exceed deadlines and easily adapts to changes as needed.
- ITS pursues a minimum of 20% of its revenues in the form of contracts – which provide income stability.
5.1.2 Weaknesses
- Product obsolescence and technology changes.
- Rapid life cycle; IT industry quickly can be subject to obsolescence with the advent of new technology.
- Substitution – many of the services ITS provides can be mirrored by competitors – even worse, larger competitors although have longer turnaround times, may be able to offer lower prices due to larger economies of scale.
- Customer base is limited with a potential for concentration risk should one sector become less than profitable.
5.1.3 Opportunities
- ITS has already attained WOSB status, making them attractive to partner with in prime government contracts.
- New technologies in cutting edge in energy and healthcare industry make the Charlotte market a robust one for subcontracting.
5.1.4 Threats
- Cash flow will be critical if payment from the contractor is delayed for any lengthy time period.
- National competitors might be able to reduce their prices due to efficient in economies of scale.
5.2 Strategy Pyramid
ITS plans on achieving a minimum of 20% of its revenues in the form of recurring consulting base, to cushion against revenue decline when the spending environment deteriorates. Long-term outsourcing contracts provide revenue continuity: Contracts are often five to ten years long, and are rarely broken. ITS plans on achieving this goal by providing top notch service to its customer base with detailed follow-ups and reviews. By keeping its narrow focus on target markets and needs, ITS can quickly alert clients of improvements and new technologies. With its commitment to training and education, ITS employees can readily adapt and perform routine upgrades. These services are often built into the contracts up front, automatically generating residual income.
5.3 Unique Selling Proposition (USP)
ITS has set itself apart from its competitors by 1) its narrow and target market focus (energy and defense). By completely understanding industry trends and trends ITS is truly the market expert. 2) ITS’ extreme attention to detail in its subcontracts and project planning sets them apart from their peers. 3) Because of its small size, ITS has the ability to not only meet /exceed deadlines, but they can adapt quickly and on short notice. 4) All these factors lead to cost savings which in turn are passed on to their clients in the form of cost savings.
5.4 Competitive Edge
That fact that ITS works with both local government contractors, has a narrow, specific targeted customer base, combined with WOSB status and a proven track record, gives ITS an edge over the competition.
5.5 Marketing Strategy and Positioning
ITS is uniquely poised as government subcontractor by its narrow focus on the energy and healthcare sectors. This focus allows for detailed models, specifically targeted to these industries. ITS utilized a focus strategy – and positions itself to cater to the needs of a narrowly defined market.
5.5.1 Positioning Statement
ITS’ goal is to be the premier subcontractor in the energy and healthcare sector. By, crafting detailed project plans, utilizing detailed models, defining the deliverables and anticipating the steps needed to complete each a and every project they undertake. ITS with its talented pool of in house talent perform all the work themselves, keeping overhead low and passing the savings onto their clients. ITS is not mired in red tape and can readily meets its milestones and deadlines and adapts easily to change. ITS motto is ‘We don’t just get the job done the first time, we get it done right”.
5.5.2 Pricing Strategy
ITS charges a flat rate of $113 per hour
- One hour on–site minimum
- The flat rate does not increase because of emergencies
5.5.3 Promotion and Advertising Strategy
ITS relies primarily on direct marketing by word of mouth. Ms. Jayne is a member of the Charlotte Chamber of Commerce and has promoted the business by word of mouth and volunteering for many of the chamber events and sponsoring happy hours and corporate luncheons.
The company has a website which is another marketing tool.
ITS plans to join IT Energy Trade Groups and IT Healthcare Trade Associations.
5.5.4 Website
The ITS website identifies who the company is, a brief history, and services and products provided. The website has a “Who We Are” section featuring pictures and brief biographies of the ITS staff. The site has links to related sites such as SUB-net a database that lists all opportunities from government contractors and FedBizOpps.gov, the searchable federal opportunities database.
The website features case studies with actual clients with needs and benefit analysis.
5.5.5 Marketing Programs
ITS, with its limited budget, will rely heavily on face to face time with contacts. Through her extensive contacts while made working in the industry, Ms. Jayne plans to continue meeting directly with prospects. The IT community is close-knit and word travels quickly.
5.6 Sales Strategy
It is impractical to have a try before you buy in the IT field; however, ITS likes to present its prospects with the next best thing, an initial free consultation and evaluation. The potential client is given a detailed questionnaire to complete and forwarded to ITS for review. The questionnaire is invaluable and helps ITS determine options best suited for the client. ITS thoroughly believes that by truly understanding their customers, they can create custom Project Plans and win subcontracts.
5.6.1 Sales Forecast
ITS expects to grow revenues 20% annually over the next three years. In order to grow revenues 20% annually and to keep pace with peers, ITS must sell $152,000 in new revenue or put another way, bill an additional 1,344 hours annually. ITS has built in cushions into its pricing model, which easily allows for just such an increase.
For example in proforma Year One, ITS estimates that it will bill 2,794 hours in billable revenue. (2,794 hours * $113.07 hourly rate =$315,917 in revenues). However, with a staff of 5 employees working 40 hours a week, the company has the potential for 9,600 hours annually (or $1,085,472). The additional burden of 1,344 hours could easily be absorbed by current staff. This business plan however employs a more conservative approach with sales and assets reflective of industry peers.
Table 5.6.1 Annual Sales Forecast
5.6.2 Sales Programs
ITS awards it employees with a lucrative incentive package to include bonus and profit sharing. For the initial three years employees will receive small bonuses, but over time, bonuses and profit sharing will commensurate with annual revenues.
ITS is a Chapter S-Corporation doing business in the State of North Carolina. The company is wholly owned by Sara Jayne.
5.8 Milestones
The following milestones will assist ITS in gauging its target metrics.
Table 5.8 Milestones
5.9 Exit Strategy
If revenues fall below break-even for four consecutive periods, the company will not have sufficient cash flow or working capital to meet operating needs. At such time, the company would require liquidation and disposal of assets, primarily the computers and hardware. Secured creditors would be paid first, then unsecured with the remainder to the investor(s).
6.1 Organizational Structure
ITS is an S-Corporation wholly owned by Sara Jayne. She currently has five employees on her staff – including one database administrator and four programmers.
6.2 Management Team
ITS is a Chapter S Corporation wholly owned by Sara Jayne. Sara Jayne is the president, CEO and CFO of ITS. Sara graduated from Duke University with a degree in Sales. She is also the Project Manager for all government subcontracts. It is her proven extreme attention to detail and commitment to these contracts that gets the awards time and time again. She has ten years experience in the technology consulting industry as a Network Engineer and ten years as a Database Administrator with Cap Gemini. Ms. Jayne is a Microsoft Certified Systems Engineer. She is also 6 Sigma certified, meaning she has received extensive training in business process improvement.
ITS will utilize a local accounting firm and outsource its payroll and taxes.
6.3 Management Team Gaps
6.4 personnel plan.
The following table demonstrates the budget requirements for ITS staff over the next three five years.
Table 6.4 Personnel Plan
6.5 Board of Directors
The financial plan will cover the following:
- Required Cost of Start-Up
- Profit and Loss
- Balance Sheet
- Financial Ratios
7.1 Important Assumptions
MM = 1,000,000
The estimated average billable rate: $113.07 per hour; this analysis employs a conservative billing rate; this model can easily be adapted to demonstrate higher hourly billing providing additional ‘cushion’ to the financial analysis.
INCOME STATEMENT ASSUMPTIONS
The company currently employs one database administrator and four programmers.
Company plans to hire two additional programmers in Year Two
In Year Three, the company plans to hire three additional programmers
Estimate the company will grow revenues 20% annually and assets by 25% (coincides with industry peers).
The company assumes to generate additional 20% in revenue streams from residuals created by long term contracts
Advertising expense is estimated to be .93% of revenues
Accounting and Legal is estimated to be 4.76% of revenues. Primarily this will be attributed to a tax service for the purposes of payroll and income taxes.
Legal expenses will be minimal, but in the event the company creates a patent, then this expense could potentially increase.
Professional Fees represent s.57% of revenue and compares favorably with industry peers
Annual rent is $9,600 or 2.43% of revenue in Year One. The company occupies 1,200 square feet of a 34,000 square foot building located at the desirable Mint Street location in heart of downtown, Charlotte, North Carolina.
Wages represent the largest component of annual expenses and are estimated to be $296M in Year One, $409M in Year Two, and $580M in Year Three. Like its peers, the IT Company’s largest expense is in the form of wages, salaries and bonuses.
BALANCE SHEET ASSUMPTIONS
The company was formed two years ago as a sole proprietorship and recently reorganized as an S-Corporation. Rather than owner’s contribution, the owner advanced approximately $33M in the form of loan to be repaid. The loan is fully amortizing based on a five year term.
7.2 Start-Up Costs
Although not technically a ‘start-up’, initial expenses include working capital and computer hardware and software.
Table 7.2 Start-Up Costs
7.3 Source and Use of Funds
The source of funds for the initial funding were in the form of owner contribution and loan to owner the loan is fully amortizing over at 6.25% over a five year term.
7.4 Break-Even Analysis
As a service provider, ITS has no cost of goods sold or overhead. Rather than try to consider employees wages as overhead, the break even chart below demonstrates the point where fixed costs less variable costs (in terms of billable hours ) equals zero.
Table 7.4 Break-Even Analysis
7.5 Projections
7.5.1 projected profit and loss.
Company’s gross profit appears in line when compared with peers. As a service provider they have little or no overhead. In addition to billable hours, the IT Company needs to strive for residual income in the form of long term contracts. This repeat business will act as a cushion in the event of an economic downturn.
Over the three year estimate, the company’s total expenses appear in line with industry peers based on same sized revenues and assets. Total expenses approximate 93% of total revenues.
Salaries, wages and bonuses represent the largest component of expenses. To retain talent and get the higher billable hours, comes with a price. Offsetting this however, is barring any unforeseen expenses; this industry enjoys high profit margins, typically above 6%.
Table 7.5.1 Pro Forma Profit and Loss
7.5.2 Projected Cash Flow
The statement of cash flow shows the incoming and outgoing cash of the business.
Table 7.5.2 Pro Forma Cash Flow
7.5.3 Projected Balance Sheet
Liquidity is key in this industry. Cash and trade receivables represent approximately 53% of total assets, resulting in positive working capital and cash flow. Right now, this company is enjoying the benefits of positive cash flow, but as has been seen in the past, this industry is economically sensitive and the similar downturns such as those of as 2000-2001 or 2008-2009 could quickly deplete cash reserves. IT companies must also maintain liquidity to keep current with technology. As new technology advances, the IT Company must be prepared to keep pace and make smart purchases to partner with this technology.
Table 7.5.3 Pro Forma Balance Sheet
7.6 Business Ratios
Because of the high level of business risk, many IT companies’ financial risk and leverage profiles tend to be more conservative, characterized by relatively high levels of equity capital, modest debt, and often substantial cash reserves accumulated because they need cash available to protect against cyclicality and unexpected downturns in earnings. (Standard and Poor’s)ITS’ business ratios also demonstrates these attributes.
Table 7.6 Ratio Analysis
- eSignatures
- API overview
- All use cases
- Customer Success
- Customer stories
- Help center
- Product updates
- Community gallery
- Integrations
- Developer portal
Information technology proposal templates
Use information technology templates as a starting point for developing your own technology business. Completely customize any proposal, contract, quotes and other templates. Focus on strengths and values that will help to increase your sales effectiveness.
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IT Services Business Plan Template
Written by Dave Lavinsky
IT Services Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their IT companies.
If you’re unfamiliar with creating an IT business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a IT business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your IT business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start an IT business or grow your existing IT company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your IT business to improve your chances of success. Your IT business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for IT Businesses
With regards to funding, the main sources of funding for an IT business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for IT companies.
How to Write a Business Plan for a IT Services Business
If you want to start an IT business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your IT business plan.
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of IT business you are running and the status. For example, are you a startup, do you have an IT business that you would like to grow, or are you operating a chain of IT businesses?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the IT industry.
- Discuss the type of IT business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
Company Overview
In your company overview, you will detail the type of IT business you are operating.
For example, you might specialize in one of the following types of IT businesses:
- Computer repair: This type of IT business provides computer maintenance and repair services.
- Computer training: This type of IT professional specializes in teaching others how to use computers as well as various software and computer programs.
- IT support: This type of IT professional provides services for businesses such as setting up a network, backing up data, and systems management.
- Cloud computing: This type of IT specialist helps individuals and businesses establish cloud platforms and tools, or may help to migrate their information to the cloud.
In addition to explaining the type of IT business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of new clients served, the number of repeat clients, reaching $X amount in revenue, etc.
- Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the IT industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the IT industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your IT business plan:
- How big is the IT industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your IT business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your IT business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, schools, families, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of IT business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other IT businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of IT consultants, in-house IT support, or do-it-yourself IT tutorials. You need to mention such competition as well.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of IT business are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you make it easier for clients to acquire your product or service?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a IT business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of IT company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide cloud computing, data center management, or network setup services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your IT company. Document where your company is situated and mention how the site will impact your success. For example, is your IT business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your IT marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to websites
- Distribute flyers
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your IT business, including answering calls, meeting with new clients, billing and collecting payments from clients, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your IT business to a new city.
Management Team
To demonstrate your IT business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing IT businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing an IT business or successfully running a small IT consulting service.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you charge your clients an hourly rate of $250 per hour, and will you work 5 hours per day? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your IT business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a IT business:
- Cost of equipment and office supplies
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of your IT credentials.
Writing a business plan for your IT business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the IT industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful IT business.
IT Business Plan FAQs
What is the easiest way to complete my it services business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your IT services business plan.
How Do You Start an IT Services Business?
Starting an IT business is easy with these 14 steps:
- Choose the Name for Your IT Business
- Create Your IT Business Plan
- Choose the Legal Structure for Your IT Business
- Secure Startup Funding for Your IT Business (If Needed)
- Secure a Location for Your Business
- Register Your [Sector] Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your IT Business
- Buy or Lease the Right IT Business Equipment
- Develop Your IT Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your IT Business
- Open for Business
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Other Helpful Business Plan Articles & Templates
MassChallenge
Innovation Blog
7 steps to create a technology startup business plan.
- Published on: April 26, 2022
- Author: masschallenge
Many entrepreneurs still overlook the importance of a technology startup business plan. In a space as competitive as the tech industry, a lack of preparation will surely pave the way to disappointment.
Instead of diving in without any concrete strategy, a plan provides a foundation for sustainable business growth.
In this article, we’ll explore the essential elements of a tech startup business plan, and provide the insights you need to create a plan for success.
What Is A Business Plan?
A tech startup business plan is a document that details the premise of your technology business, summarizing vital financial objectives and operational goals, as well as details on how you will accomplish these goals.
Put simply:
It’s a road map that describes what you intend to do, and how you intend to do it.
A typical business plan will comprise the following seven elements:
- Executive Summary
- Company Description
Market Research
- Description of Products and/or Services
- Management & Operational Structure
- Marketing Plan
- Financial Plan
3 Reasons You Need a Business Plan
Before we dive into the individual aspects of a startup business plan, let’s first consider why you need one.
Just what are the benefits of a business plan?
1. It Offers Greater Clarity
Having a business plan will give you a much better understanding of your business and the objectives you are trying to achieve. Even the most basic technology startup business plan example will seek to define your goals in more objective terms.
For example, you can set specific targets for website traffic, sales volumes, or profit margins. This makes it easier to track and measure success and aligns your decision-making with sales and marketing initiatives.
2. It Increases the Chances of Success
A report from the Harvard Business Review found that companies with a business plan are 16% more likely to succeed.
Furthermore, companies that have a business plan also enjoy higher growth rates than companies without a plan.
3. You Are More Likely to Get Investment
Angel investors and venture capitalists aren’t in the habit of making bad bets. When they part with large sums of money, it’s a carefully considered decision they base on the likelihood of earning a positive return on investment (ROI). When you have a business plan, you give your startup strategic focus, which helps you create an identity that is built to succeed. This makes for a more attractive prospect in the eyes of investors, so it’s easier to raise capital for your startup when you have a plan.
How to Write a Business Plan for Your Tech Startup (7-Steps)
So, now that you understand the motivation behind creating a tech startup business plan, it’s time to see how it’s done. By including the seven elements below, you’ll have a plan that gives your company a much stronger footing.
1. Executive Summary
The executive summary is, without a doubt, the most critical element of your tech startup business plan. Despite this, a lot of plans fail here because the summary doesn’t captivate readers. If you can’t hook prospective investors, partners, or employees with your executive summary, they may never read the rest of your business plan.
Source: The Balance
This section should be compelling yet concise, giving people enough to understand what makes your startup unique, and how it will be able to offer solutions in an existing, competitive market.
While you want to keep it brief, there is a lot to pack into this opening section of your business plan. Here are the crucial components of an executive summary:
- Business Model – What is your product or service? How will you make money?
- Target Market – Who will benefit from this product or service?
- Business Opportunity – Why do consumers need your product or service?
- Marketing Strategy – How will these consumers learn more about your product or service?
- Competition – What other companies are competing for market share?
- Goals – How will your startup transform the marketplace with this product or service?
As the executive summary is such a vital aspect, it’s a smart move to write it last. By waiting until you have finished the rest of the business plan, you can draw from the other sections to craft an excellent executive summary.
2. Company Summary
The company summary essentially boils down to a single sentence, otherwise known as a headline statement. When it’s done right, this summary can be the perfect elevator pitch to capture the imagination of would-be financial backers or partners, and it will serve as a natural lead-in to your more detailed business plan.
Source: Gusto (credit: LivePlan)
The company summary or headline statement should do the following:
- Give people a brief overview of what your company does.
- Communicate the value you offer.
- Highlight the opportunity in the market.
Here is a good template to create your company summary:
<Your company> is a <type of business> who sells <product or service> to <target customer> , who needs <solution> , but doesn’t get it from <competition> .
Don’t worry if you can’t create the perfect summary now. When you develop your business plan, you will get a better understanding of what this headline statement should be, and then you can refine it to reflect your vision and value proposition.
We’re sure you have a great idea, but that’s no guarantee that everyone is going to love it as much as you do. No matter how good you think your startup may be, you still need to conduct proper market research to learn more about your ideal customers and competitors.
Identify your Target Market
Without a viable market for your product or service, your business is doomed.
Many startups have failed quickly because the owners were so obsessed with their own product that they were effectively blind to the fact that nobody else cared about it.
Source: CB Insights Image: Cleveroad
Initially, you can adopt a broad scope to get a sense of your total addressable market (TAM), which is the potential revenue opportunity your new product or service could generate. Of course, with the competition, and changing consumer interests, it’s unlikely you will dominate the entire TAM.
Once you have this broad idea, you can hone your sights to go more niche. While this presents a smaller audience, it is more effective. By narrowing your targeting, you can market to a more engaged audience that will be more receptive and likely to purchase your product or service.
Consider the following factors when segmenting your audience:
- Demographic – What age group? What gender?
- Geographic – In what country or city do your prospects live?
- Behavior – What websites/blogs/news sources do they use? What are their purchasing habits? What retail sites or brands do they buy from?
With in-depth data analysis and evaluation of your prospective customers, you can create detailed buyer personas that help you refine your marketing strategies.
Perform Competitor Analysis
During the market research stage of your tech startup business plan, you should also carry out a thorough competitor analysis.
This will help you determine the key differentiators between your company and the competition.
Ask yourself these questions:
- Why should people choose my product or service?
- How can I improve on the existing solutions in the market?
- Why do people not already buy the products in the market?
By thinking about current trends or flaws in existing products, you can identify opportunities for innovation so that your business can connect with customers on a deeper level.
Knowing your audience is crucial, and therefore, your business plan must demonstrate a deep understanding of your target market, and your competitors.
3. Description of Products and/or Services
Here, you must highlight the link between what you are offering, and what people need, so you can prove that people are ready and willing to pay for your product or service.
Research Problems in Market
It helps to conduct some face-to-face research, asking potential customers about the problems they have. Don’t try to usher the conversation in any direction or shoehorn their answers to fit your product – instead, look to learn from their honest responses about the solutions they need.
You should do this research before creating the product. After all, it makes more sense to create a product for an existing problem, instead of trying to find a problem for your product.
Source: ProductTribe
Tailor Product to Problems
After doing your research on the existing problems in the market, trim your list to focus on a few of the most important issues. Describe how your product or service will be the ultimate solution to these problems.
For instance, if people believe the existing solutions are too expensive, you can offer a product with a more attractive price point.
By matching up consumer problems with specific solutions, you can develop a product or service that has a more significant value proposition.
4. Management & Operational Structure
The next stage of the traditional technology startup business plan template delves into the people that make up your company. You must highlight the strengths and experience of your existing team, as new partners effectively invest their money in the team as much as the business idea.
Ideally, your team will consist of several experts whose respective skill-sets complement one another. For example, your tech startup may have a coder, a graphic designer, an inbound marketing expert, and a sales professional. Discuss the merits of each team member to convey the value they add to the business.
You can also speculate about prospective new hires and the key attributes you will seek in future team members. If you haven’t already got a chief financial officer (CFO), it’s a smart move to mention adding one soon. This will add backbone to your business plan by reassuring people that you have good financial sense.
Organizational Chart
Here, your plan should clearly define the organizational structure of your startup. For now, it may just be you and a couple of business partners.
However, by including a graphic that visualizes the structure you intend to build, people will get a clear understanding of the distribution of power and chain of command.
For example, it may look something like this:
Having a hierarchy prepared before starting helps prevent any debates about who is in charge of each department, and makes it easier to understand who reports to who.
5. Marketing and Sales plan
No tech startup business plan would be complete without mentioning the marketing and sales strategies you intend to use.
Sales channels
To clarify the difference, marketing channels are used to promote your business, and its products or services, whereas sales channels are the mediums that enable people to purchase those products or services.
You may only have one direct sales channel to begin with, such as an online e-commerce store. Make sure you explain it in your business plan.
Marketing activities
In this section, you must detail how you will acquire leads and customers.
At the base level, you should do the following:
- Launch a company website
- Develop strategy to get organic traffic (i.e. visitors from search engines like Google)
- Develop a PPC strategy to get immediate online exposure for your most important product/service keywords
- Develop channel partnerships
- Build an email subscriber list
Over time, you can use marketing to nurture stronger customer relationships, which in turn, help you build an audience of loyal followers that will, hopefully, become customers.
The marketing section of your business plan will need to account for several factors, including your goals, risks in the market, and your budget. Which brings us to the final aspect of your tech startup business plan.
6. Financial Plan
Lastly, any good business plan must include pertinent details about your company budget and sales goals.
This can be daunting for many new entrepreneurs and is all the more challenging when you have no balance sheets, cash flow reports, or even any stable income on which to base your projections.
That being said, it’s still possible to make educated projections – so long as you have done solid market research.
When it comes to financial matters, your business plan should include details about:
- Revenue streams – how will the company generate income?
- Major expenses – What high costs do you anticipate in the year ahead?
- Salary demands – Are you still bootstrapping or are you and the partners taking a salary? If so, how much?
- Financial milestones – Detail your expansion strategy by considering future hires or store openings that will impact the books.
Many startups aren’t profitable in the first year. Your financial projections should maintain a long-term view for success, keeping ambitions realistic and honest. That way, you’ll be able to produce a more accurate break-even analysis .
With these long-term projections, you must consider the financial impact of expanding. You may be making more money in Year 3, but opening a new store will set you back.
Keep everything in perspective and make sure you don’t set yourself or your investors up for any nasty shocks down the road.
5 Tech Startup Business Plan Templates
When you have all the elements above in place, your business plan will be in good shape. However, presentation matters. If you want to make the best first impression, getting creative with your technology startup business plan template can make a big difference.
Not only will your research and expertise shine through, but you will have a visually stunning presentation that catches the eye of investors.
Here are five tech business plan examples to inspire you.
Business Plan Infographic PowerPoint
This plan allows you to present in-depth market analysis, statistics, and projections in a professional visual infographic. With several hundred editable slide options, it’s well worth the $16 fee for the license.
Source: Medium
Emaze Business Planning With Analytics
This is more than the average technology startup business plan template. Emaze has a diverse array of creative collaboration tools, making it easy and enjoyable for teams to create unique plans together from any of the built-in templates. Furthermore, you can incorporate analytics, which is perfect for impressing investors. That said, $19 per month for the premium version may seem a little steep for some small businesses.
Source: Emaze
Lean Canvas 1-Page Business Plan
A tech startup business plan doesn’t need to take weeks to create. In fact, with this template, you can have a basic – yet brilliant – business plan all together on a single page in just 20 minutes.
Source: Lean Stack
StartUp Pitch
For $15, you can access the full array of colorful slides in this presentation, which are all customizable to your needs. This template includes many ready-made aspects of the typical business plan, such as SWOT analysis, competitor analysis, and project timelines.
Source: Envato
This is another user-friendly tool for creating short business plans. You enter the information, and then LivePlan will generate a one-page plan in an infographic style.
Source: LivePlan
Make Your Tech Startup Business Plan a Priority
It’s not enough to have a great startup idea.
If you want to stand out from the pack, secure investment, and build a successful company that can earn real profits, growth, and customer loyalty, then you absolutely must have a solid tech startup business plan.
It’s time to create yours.
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How to start an IT services business
As the modern business landscape is being driven by technology, companies in all industries need the right tech infrastructure to stay competitive, reduce risk, and protect data. As a result, IT services professionals like you are in high demand across every industry.
Businesses are boosting their IT budgets to bring in these professionals and consultants. A recent Gartner report shows that global IT spending is predicted to grow by 6.2% in 2021 .
You can capitalize on this need by starting your own IT services business .
Regardless of your field of specialty, there’s ample work to be done. And most importantly, high earnings potential. In this guide, we’re outlining the steps you can take to create a successful IT services business.
Decide on your IT service offerings
Remember that your services will be a main selling point for potential clients. Some of the IT services your practice might provide some combination of:
- network design and installation
- software installation and updates
- tech support
- IT budgeting and procurement decisions
- hosted services and storage
- risk assessments
- security strategy
- remote admin management
When deciding your offerings, commit to ones you have experience with. It can be tempting to offer services outside of your skill set in hopes that you’ll win more clients. But taking on an IT project you have no experience with can backfire.
Research your market and competitors
Once you’ve settled on potential IT services, determine what type of clients you’ll pursue. You might target customers by business size. Or you could focus on companies in sectors where you have made a name for yourself.
Some cities are more difficult to start a business in than others in terms of customer base, competition, and expenses. Do market research on competing IT businesses in your city.
Finding out what services they offer is relatively easy, but dig deeper to learn how much they charge. A competitive analysis will help you identify opportunities to fill gaps in your local IT services market.
You can use our study of the seven best cities to start an IT consulting business to get a sense of which areas have the most potential. Some cities are pricier than others, but you can charge higher rates for your services in more expensive cities.
Choose a business structure
When you're starting an IT services company, don’t overlook finding the right business structure. It’s not enough to simply have the required experience and enough money to get started.
Most small IT services businesses opt for a sole proprietorship , a partnership, a limited liability company (LLC) , or an S corporation (S corp) . The structure you select for your company will impact your taxes, the amount of paperwork you’ll need to do, and your personal liability.
For instance, a sole proprietorship is the easiest business structure for single-person companies. You won’t have any paperwork to file with your state. But if a client sues you, there’s no distinction between personal and business assets.
Forming an LLC can cost up to $500, and your state could take a few weeks to process the paperwork. However, an LLC shields a small business owner’s personal assets in the event of a lawsuit.
S corps and partnerships each require their own paperwork and filing procedures. They also have different tax structures and various restrictions. Your accountant can provide advice on what makes sense for your current state and future plans for the business.
Get a business license
Once you decide on a company structure, you may need a business license. The process of getting a business license varies by state, but applying for one is usually straightforward.
Your state’s business licensing website will offer specifics, but expect to submit basic information about your company, such as:
- Employer Identification Number (EIN)
- business name and type
- contact information and business address
- name of the business owner
- number of employees, if any
Depending on your state, you may have to pay a filing and/or processing fee. Once your application is approved, make sure you know how long your license is valid for. Certain states require small business owners to reapply for their business license every few years.
Write a business plan
A business plan is essentially a snapshot of your company’s current state and a road map for its future growth. Many small businesses don’t have a formal business plan when they first start. But if you want to get funding for your business, investors and banks will probably require one.
The U.S. Small Business Administration (SBA) offers templates for traditional and lean startup business plans . Traditional business plans are longer and take more time to write, but you’ll probably want to choose this format if you seek major funding.
Business plans typically include:
- a company summary
- your business structure
- product or service offerings
- a competitive market analysis
- funding sources
- financial projections
- marketing strategy
- hiring strategy
Open a business bank account and dedicated business credit card
A business bank account will make it easier to keep your personal and business finances separate.
Separating business earnings and expenses from personal money makes bookkeeping and taxes far less complicated. When you know which transactions were related to your business, it’s much easier to calculate your income and track deductions.
A business credit card makes it that much easier to separate business expenses. And these cards typically offer better terms and higher limits than personal cards. Plus, you can enjoy perks like rewards points and cash-back offers.
Most banks offer competitive small business checking accounts and credit card options. You may also want to consider talking with your accountant about banking options. NerdWallet offers a guide to business checking options and the top-rated business credit cards if you’d like to do the research yourself.
Secure funding
Before you can get your business off the ground, certain costs may stand in your way. If you can’t foot the bill with your savings or help from friends and family, you have options.
Raising money from venture capital firms can be helpful. You’ll want to find a venture firm that works specifically with IT services businesses. For example, America’s Seed Fund is one of the leading investors for early-stage IT companies.
Besides a business plan, venture capitalists will want to see a compelling pitch that explains why they should invest in your business and what return you hope to offer them.
You might also be eligible for a grant through the SBA, such as the 7(j) Management and Technical Assistance Services grant. This grant provides funding to companies that offer technical assistance and management services to other small businesses.
If these options don’t seem like the right fit, research business grants funded by third-party companies and organizations. For example, the National Association for the Self-Employed awards small businesses grants for purchasing equipment, hiring part-time help, creating a website, and more.
Other small business funding sources include SBA microloans, low-interest credit cards, and crowdfunding platforms.
Choose your workplace
One of the major benefits of self-employment is choosing where you work.
You can opt for a traditional office, a co-working space, or your home office. Your decision should factor in your budget, working style, plans for possibly hiring employees, and how often clients will visit.
If you plan to rent office space, keep in mind that most landlords will want you to carry commercial property insurance to protect against theft or damage to items in your space.
Home-based IT service businesses that do most of their work at client sites should consider commercial auto insurance or hired and non-owned auto insurance . Most personal auto insurance policies won’t pay for accident damages that occur when you’re driving for business.
Create a basic budget to start
Understanding any upfront costs for your IT services business can help you save money over time. Before you start making big investments in your business, create a simple budget to help you stay on track. Here’s how you can get started:
- Calculate the costs: Add up your business expenses, including loans, rent, software licenses, insurance premiums , and so on. If your business hosts websites or applications for customers, you may need servers and other expensive equipment.
- Estimate your revenue: Determine how much money you expect to make monthly, quarterly, and annually. If you’ve already started making money, you can use that as a baseline to forecast your revenue. If not, you can estimate revenue based on your financial goals.
- Calculate your profit margin: Your profit margin is the percentage of money left over from sales after your business expenses. Monitoring your profit margin allows you to see if you’re charging enough and keeping expenses in check as your business expands.
Track your budget monthly by tallying your revenue and expenses at the end of the month. This will help you spend responsibly.
As your business grows, so will your budget needs. You may want to review steps for a thorough small business budget now to help you plan for your business’s financial future.
Draft and use client contracts for every engagement
Before you start working for a client, have contracts that outline your terms and conditions. Contracts can protect you from lawsuits and let your clients know exactly what they can expect from you – and what you expect from them.
A basic IT services contract should include the following information:
- scope of the work
- price and frequency of invoicing
- timelines for the project
- termination clauses
- dispute resolution details
Client contracts will frequently require your business to purchase technology errors and omissions (E&O) insurance . This policy protects your company from lawsuits caused by work mistakes or missed deadlines. It will pay for attorney's fees, court costs, and settlements if a client sues you.
For some projects, you might also need cyber liability insurance to help pay for recovery from a data breach or your response to a lawsuit caused by one. Many insurance providers now bundle cyber liability insurance with E&O coverage. Even if this isn’t a contract requirement, it’s still a sound investment.
Hire strategically
When your business begins to grow, it could be time to consider hiring employees or freelancers. Beyond lightening your workload, it can allow you to take on new projects.
But don’t necessarily hire the first person who applies. Every new hire should undergo a thorough background check. You may be trusting these employees to handle confidential and potentially sensitive information. Call their references, and make sure that all terms of employment and wages are clear in the offer letter.
You can purchase fidelity bonds to guard against employee theft and fraud. In fact, your clients may request it in their contracts.
Most states require businesses with employees to carry workers' compensation insurance . If an employee suffers a job-related injury or illness, workers’ comp coverage pays for the injured employee’s medical expenses and partial lost wages.
These policies will also cover attorney's fees, court costs, and settlements if an injured employee sues your business.
You may also consider employment practices liability insurance to protect against lawsuits over wrongful termination, harassment, and similar issues.
Invest in marketing and networking
Finding clients for your new IT services company can be challenging. But it’s the most important step for long-term success. That’s why your marketing and networking are critical.
As an IT business, digital marketing is a must. Many potential clients will find your business through search engines. If your budget allows, hire a web firm or freelancer to create your website. A search engine optimization (SEO) consultant can help boost your site’s Google rankings.
If you don’t have the budget for professional help, try designing a site yourself with online tools like Squarespace, Wix, or WordPress. Starting a blog can also be an effective way to attract clients and improve your search rankings.
Social media is another powerful tool for reaching prospective clients. Create LinkedIn, Twitter, and Facebook accounts for your IT services business and post content relevant to the industry and your potential clients. You can also run paid ads that target users by geography, demographics, income, and other criteria.
But don’t forget the human touch. There’s still no substitute for networking.
Reach out to both current and former colleagues. Meet new potential clients and business partners by attending virtual and in-person conferences and networking events. Make a small investment in business cards and pass them out to your new contacts.
Make continuing education and certifications a priority
Earning IT industry certificates and accreditations can make your new business stand out from the competition.
Continuing education will help you stay up-to-date on trends and best practices and give you the chance to learn new skills. CIO Magazine offers a list of the top certifications for IT professionals , and you can find many more programs online depending on your area of expertise.
Some popular certifications include:
- Certified in the Governance of Enterprise IT (CGEIT): The CGEIT tests your ability to manage security threats and your understanding of IT governance.
- Certified Information Systems Security Professional (CISSP): A CISSP cert proves your knowledge about IT security, including information assurance, organizational structure, budgeting, risk management, and more.
- Information Technology Infrastructure Library (ITIL): An ITIL cert shows your expertise in the ITIL framework, with a focus on using effective strategies to manage teams and improve efficiency across an organization.
- Six Sigma Certification: Six Sigma’s certification program helps IT professionals hone their project management and leadership skills, especially when it comes to organizational transformation.
- Certified ScrumMaster (CSM): Earning the ScrumMaster badge means you understand how to keep IT projects on track, limit distractions, and improve project team efficiency.
- Certified Associate in Project Management (CAPM): The CAPM certification tests your ability to oversee multiple IT projects at a given time, as well as manage a product or service life cycle.
Your business can also pursue certifications for a vendor’s technology. This includes companies like Microsoft, Cisco Systems, and Amazon Web Services (AWS). These certs can be a huge selling point for potential clients because they know you’re an expert with the technology they use.
Starting an IT services business provides a significant opportunity to pick your own projects, boost your income, and work for clients in a range of industries. Investing the time and effort into covering all your bases increases the chances that your business will enjoy long-term success.
At Insureon, we’ve helped countless new IT businesses protect themselves and limit their risk. Complete our easy online application today to compare quotes for business insurance from top-rated U.S. insurers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.
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Tesla stock down as investor day falls short on specifics
- Tesla CEO Elon Musk took the stage to present his "Master Plan Part 3" for the company at its 2023 investor day in Austin, Texas.
- The company's manufacturing leader, Tom Zhu, revealed that Tesla had produced 4 million cars as of Wednesday.
- The presentation was long on vision and a review of prior achievements, but short on specifics about any new Tesla products or services.
In this article
Electric vehicle maker Tesla hosted a 2023 investor day presentation in Austin, Texas, on Wednesday. CEO Elon Musk took the stage to share his "Master Plan 3," and to discuss how Tesla plans to scale up in the face of increasing competition.
The presentation was long on vision, and included a review of prior achievements, but short on specifics about any new Tesla products or services.
Near the beginning of the presentation, Musk said: "There is a clear path to a sustainable-energy Earth. It doesn't require destroying natural habitats. It doesn't require us to be austere and stop using electricity and be in the cold or anything." He added, "In fact, you could support a civilization much bigger than Earth, much more than the 8 billion humans could actually be supported sustainably on Earth."
Musk was initially joined on stage by Drew Baglino, senior vice president of powertrain and energy engineering at Tesla. They discussed a future in which the company would play a role in "re-powering the grid with renewable fuels" as they ramp up battery production, both for Tesla's electric vehicles and for the company's utility-scale energy storage systems.
Tesla's goal is to produce 20 million electric vehicles per year by 2030, executives reiterated. The company reported full-year deliveries of around 1.31 million vehicles in 2022.
During a question-and-answer session following the three-hour presentation, executives fielded a question about how Tesla could grow its market share in China.
Elon Musk passed the question to Tom Zhu, who is heading up global production and has run the China and APAC businesses for Tesla for years. "As long as you offer a product with value at affordable price you don't have to worry about demand," Zhu said. "We try everything to cut costs," he added, "and pass down that value to our customers."
Musk then added, "Demand is a function of affordability not desire." He said, "Even small changes in the price have a big effect on demand."
Zhu also announced that as of Wednesday, Tesla had produced 4 million cars in total.
"It took us 12 years to build the first million, and about 18 months to the second million. The third million, 11 months. Then less than seven months to build the 4 millionth," Zhu said, touting the company's improving operational efficiency.
He said Tesla plans to construct new car and battery cell factories, and also to produce more cars per year at its existing factories.
Tesla charging leader Rebecca Tinucci said that in 2022 the company provided 9 terawatt hours across charging methods, including home charging including 40,000 Superchargers. (By way of comparison, the entire U.S. consumes about 4,000 terawatt hours of electricity per year.) Tinucci also noted that about half of the company's Superchargers in the EU are open to other vehicles, and that the company just opened 10 Superchargers in the U.S. to non-Teslas.
Read more about electric vehicles from CNBC Pro
Here's what every major analyst thought of Tesla's investor day
Top auto analyst Jonas stays bullish on Tesla, says investor day showed competition can't keep up
JPMorgan downgrades electric vehicle stock Nio, says expectations are too high
Tesla design leader Franz von Holzhausen and the company's vice president of vehicle engineering, Lars Moravy, took the stage to show off a number of planned manufacturing changes meant to improve the efficiency of Tesla vehicle production. But von Holzhausen said that Tesla would not yet reveal its "next gen" vehicle.
The company's powertrain vice president, Colin Campbell, said that Tesla's next powertrain factory will be 50% smaller than the one in Austin but will have the same capacity. He also said the company is working on a new kind of drive unit that is compatible with any battery cell type, and a motor that will be built without any rare earth metals.
Ahead of the 2023 investor day, at a news conference on Tuesday, Mexico's president, Andres Manuel Lopez Obrador, said Tesla had agreed to build a large factory in Monterrey, Mexico . He said the company agreed to use recycled water and take other initiatives to cope with water scarcity in the region.
Musk confirmed the factory plans on Wednesday, and said production there would supplement, rather than replace, any manufacturing at other Tesla facilities.
Tesla shares have rebounded from declines during 2022, and are up more than 60% for the year so far. However, the stock dropped 1.43% on Wednesday before the event, and 5% after-hours.
Mizuho Securities analysts maintained a buy rating on shares of Tesla ahead of investor day, seeing the company in a leadership position in a growing market for fully electric vehicles. They wrote in a note earlier this week, "Near-term, we see continued strength in TSLA's market share, but see cheaper competitor EVs coming to market as potentially dilutive to TSLA's share of the US EV market."
Currently, the lowest-priced Tesla available is the Model 3 sedan, which starts at a price point of around $43,000, they wrote. Seven models from other automakers are currently priced below that, Mizhuo noted.
Musk's ambitious "Master Plan, Part Deux " was published in 2016, and has not been completely fulfilled. It included four main objectives:
- "Create stunning solar roofs with seamlessly integrated battery storage"
- "Expand the electric vehicle product line to address all major segments"
- "Develop a self-driving capability that is 10X safer than manual via massive fleet learning"
- "Enable your car to make money for you when you aren't using it" .
— CNBC's Michael Bloom contributed to this report.
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Tesla Offers a New ‘Master Plan’ but Few Big Revelations
Elon Musk confirmed his car company would build a factory in Mexico and said it was working on more affordable vehicles. But he did not reveal a new model, disappointing some investors.
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By Jack Ewing
Tesla said on Wednesday that it would build a factory in Mexico to manufacture an electric vehicle that would be significantly more affordable than any of the cars it sold now. But the company disappointed investors who were expecting it to make big announcements about new products and strategies.
Shareholders and analysts had expected Tesla to reveal information that would clarify how the company would retain its crown as the world’s dominant maker of electric vehicles in the face of energetic competition from established carmakers and relatively younger Chinese manufacturers.
Instead, company executives offered a seminar on its manufacturing processes, supply chain organization and software. The message was that Tesla is eons ahead of other automakers in technology and efficiency, on track to someday produce 20 million vehicles a year, twice as many as Toyota does now. Tesla provided few of the financial bullet points or strategic initiatives that are often found in investor presentations.
Elon Musk, Tesla’s chief executive, portrayed Tesla as a company on a mission to eliminate global dependence on fossil fuels, a theme he has often highlighted.
“I really want today to be not only about investors who own Tesla stock but anyone who is an investor in Earth,” Mr. Musk said early in the event at the company’s factory in Austin, Texas. “Earth can move to a sustainable economy and will do so in your lifetime,” Mr. Musk said, before ceding the stage to other executives who offered wonky presentations on topics like electrode manufacturing, Tesla's energy storage business and how the company will build electric motors that do not require rare minerals.
“We didn’t hear as much about market conditions in electric vehicles as we did about ‘Here are some very grand goals we have for sustainable energy,’” said Tammy Madsen, a professor at the Leavey School of Business at Santa Clara University.
Mr. Musk waited until the end of the event, which lasted more than three hours, to confirm reports that Tesla would build a factory, its fifth car plant, in Monterrey, Mexico. He indicated that Tesla would build a more affordable model there, but declined to offer any details about the vehicle’s design or performance.
President Andrés Manuel López Obrador of Mexico said on Tuesday that the company had decided to build the plant.
Tesla’s presentation on Wednesday seemed more like a recruiting event for engineers than an investor presentation, said Vincent Pluvinage, the chief executive of OneD Battery Sciences, a battery technology company.
“It was all about efficiency, getting more for less,” Mr. Pluvinage said. “I don’t think he cares about investors,” he added, referring to Mr. Musk.
There had been speculation that Mr. Musk would unveil plans for a Tesla vehicle that would be less expensive than the Model 3, which starts at $43,000 in the United States.
Mr. Musk spoke of a $25,000 car in 2020, but he later seemed to quash the idea. Whether the car would be so affordable when it goes on sale is another question. Mr. Musk and Tesla had said the Model 3 would cost $35,000 before it went on sale in 2017, but few were sold at that price. Since then, the car’s price steadily climbed before Tesla lowered it a bit in January .
Analysts and investors have expressed concern that Tesla has been too slow to introduce new vehicles and respond to carmakers like Hyundai, Volkswagen and Ford Motor that have brought out a wide variety of new electric models, many much cheaper or very different from Tesla’s four models: the S, X, 3 and Y. General Motors plans to begin selling three new electric vehicles this year, including an electric version of the Chevrolet Equinox crossover that will start at around $30,000.
Investors had also expected Mr. Musk to make an announcement about battery technology. One of Tesla’s main selling points has been its batteries, which provide more range and faster charging than many of the models offered by other manufacturers. Executives talked about Tesla’s lead in battery technology, but no major announcements were made.
The event on Wednesday was seen as a response to investors who have complained that Mr. Musk’s acquisition of Twitter last year diverted his attention and left him less focused on his car company.
But the presentation does not appear to have impressed investors. Tesla’s share price, which is often volatile, was down about 5 percent in extended trading on Wednesday evening.
In China , the automaker BYD has surpassed Tesla in electric vehicle sales, challenging the notion that Tesla is poised to dominate the auto industry as battery-powered cars increasingly supplant gasoline models. BYD is now making a big push into Germany and other European countries, threatening to undermine Tesla’s dominance there.
When asked about China, Mr. Musk handed the question off to Tom Zhu, who oversaw construction of Tesla’s factory in Shanghai and now oversees all of the company’s factories. As long as Tesla offers good products at reasonable prices, “you won’t have to worry about demand,” Mr. Zhu said. “I’m not too concerned about China.”
China has the world’s largest car market, and Tesla’s factory in Shanghai produces more cars than any of its other plants.
After falling 65 percent last year , Tesla’s share price has recovered some of its value but is still down almost 50 percent from its high in November 2021, when the company was worth more than $1 trillion.
With the factory in Monterrey, Tesla is following a path taken by almost all other major carmakers, which have long made cars and components in Mexico, attracted by cheaper labor and duty-free access to the U.S. market. Ford makes the electric Mustang Mach-E in Cuautitlán, north of Mexico City. BMW in February announced that it would build electric vehicles in San Luis Potosí, where it already has a large manufacturing operation.
Monterrey, in Nuevo León State, has been less prominent in the auto industry than other Mexican states like Guanajuato, where G.M., Toyota, Honda, Volkswagen and Mazda have operations. But Monterrey is a seven-hour drive from Austin, where Tesla began manufacturing vehicles last year.
Tesla also has factories in Fremont, Calif., and Berlin. The factories in Austin and Berlin are still getting up to speed, suggesting it will be a challenge for Tesla to manage the ramp-up of another plant.
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A business plan will help you raise funding, if needed, and plan out the growth of your technology business in order to improve your chances of success. Your technology business plan is a living document that should be updated annually as your company grows and changes. Sources of Funding for Technology Businesses
Steps to Writing a Startup Business Plan An IT company business plan is a detailed plan for running and developing an information technology company. It should describe all aspects of the business, including the company's description, product description, marketing strategy, and financial analysis, in a clear and precise manner.
We need to plan everything from the number of employees and starting costs for the business to the perspective customers. Step2: Branding People trust the companies that have established brand names. In order to make it successful, our tech company will also establish a strong brand name.
This business plan leads the way. It renews our vision and strategic focus: adding value to our target market segments, and reinforcing our ties with businesses in our local markets. It also provides the step-by-step plan for improving our sales, gross margin, and profitability.
Here are some of the top tech business ideas, including some recommendations from tech entrepreneurs themselves. 1. Food tech Our first recommendation comes from Phil Strazzulla, founder of HR...
(Data Monitor). 4.1 Industry Analysis The U.S. information technology services industry includes about 100,000 companies with combined annual revenue of about $290 billion. Major companies include Computer Sciences Corporation (CSC), Unisys, and the technology consulting arms of IBM and Hewlett-Packard.
Start your own information technology business plan. Information Management Hawaii Financial Plan . Although we are treating the business as a start-up company, the financial plan is solidly based on past performance. We have taken actual SIOT P&L income and expenses from the past three years, and eliminated corporate overhead expenses such as ...
This is a sample business plan created with iPlanner.NET business planning software application. Main financial measures 2012 2013 2014 Cash 3,422 52,939 114,404 Sales revenue 1,175,000 1,800,000 2,450,000 Net profit for financial year -112,509 76,547 210,178 Operating margin -9.58% 4.25% 8.58% Owners' equity 22,491 159,038 349,216
Information Technology Solutions ('ITS'), is an information technology subcontractor that specializes in database management and application development support. ITS strives to provide the high quality technological business solutions with a concentrated focus on the energy and defense sector.
Our Free Sample Information Technology Business Plan is Designed in Collaboration with Industry Specialists to ensure that your company achieves its goals and employs effective business strategies. Edit the Document Elements—Company Name, Objectives, Unique Selling Point, Target Market, SWOT Analysis, Operational Plan, and Financial Plan ...
Information technology proposal templates. Use information technology templates as a starting point for developing your own technology business. Completely customize any proposal, contract, quotes and other templates. Focus on strengths and values that will help to increase your sales effectiveness.
Your IT business plan is a living document that should be updated annually as your company grows and changes. Sources of Funding for IT Businesses With regards to funding, the main sources of funding for an IT business are personal savings, credit cards, bank loans, and angel investors.
By including the seven elements below, you'll have a plan that gives your company a much stronger footing. 1. Executive Summary. The executive summary is, without a doubt, the most critical element of your tech startup business plan. Despite this, a lot of plans fail here because the summary doesn't captivate readers.
Some of the opportunities being addressed by Information Technology as part of the 2011-2014 Business Plan include: - Migrating all of the City's staff PCs to Windows 7 and Office 2010; - Improving the wireless Infrastructure and eCity Portal for improved service delivery and network access; and - Implementing Enterprise Level Decision ...
A business plan is essentially a snapshot of your company's current state and a road map for its future growth. Many small businesses don't have a formal business plan when they first start. But if you want to get funding for your business, investors and banks will probably require one.
A business plan for an information technology services company involves a lot of things. It requires your assets, needs, desires. You need to flush it out, as it were. How many computers will your need for the business, also, who will need the highest level of tech. The ceo cannot wait for data.
Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.
Tesla CEO Elon Musk took the stage to present his "Master Plan Part 3" for the company at its 2023 investor day in Austin, Texas. The company's manufacturing leader, Tom Zhu, revealed that ...
There had been speculation that Mr. Musk would unveil plans for a Tesla vehicle that would be less expensive than the Model 3, which starts at $43,000 in the United States. Mr. Musk spoke of a ...
A first round of swingeing culls hit the technology sector in November. US companies including Goldman Sachs, Microsoft and Amazon followed by laying off nearly 103,000 people in January, the highest monthly total since the height of the pandemic. Now the misery is spreading, as executives hunker down ahead of a possible recession.