Brief Business Plan for Outer Body Support and Consulting

Name

Financial Management 571 Section 020

After many years of working it Information Technology (IT) I have learned a great deal about customer service and the industry as a whole. In addition, I have acquired skills in research and planning and now the time has come for me to go into business for myself. The business will support or assist small-to-medium size businesses IT system support and consulting. Defining IT support is rather difficult simply because it falls within a range of many task from end user help desk support to system design architecture. In the following article (2009), the author defines an IT support organization as:
To define the support, maintenance, and operations organization required to support (supporting) the information technology defined during the Strategic Systems Planning process. The focus of this task is on the organizational structure…Examine the following areas, and recommend strategies for user support; maintenance; operations; policies; procedures; corporate approach to information technology. (Borysowich, 2009)

Furthermore, I will be considering adding a help desk facility with internal/external support teams. I will also add local and remote support services to our clients as well as hardware and software support for all operating systems. I also hope to add system and software programming within a year or so based on the profitability of the business. Individually, I will assume the role of the owner, but I will partner will several family investors financially. By the same token, I hope to manage, train, and work as a technician in the short term. However, later I plan to move strictly toward a fulltime management role. What are the goals and objectives that we want to achieve? We want to provide real people support with consistent solutions and old fashion customer service in which we will do everything to keep your business. Internally, I would like to maintain a customer service rating above 90%, and will monitor this through weekly and monthly surveys. Our business philosophy is, “Business first, people always.” While business is important, people are more important. This underlines that while many things in society place business first we will always put you as a person above all and empathize with you.
Our primary marketing plan would target small-to–medium businesses (private or public institutions) in the two major metropolitan markets in the state of Missouri (St. Louis and Kansas City). Although, service during the first year in Kansas City will be strictly for help desk support through phone and remote services, but consulting will be through appointment or new clients within the Kansas City area. Furthermore, for the primary marketing campaign we have partnered with Synergy Marketing Group. The firm has expertise in the markets here in the state of Missouri. Synergy will research and gathering data for our target markets. While the cost can be significant, we believe data and research should be carefully taken into consideration. Secondarily, independently we will employ research means using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. The importance of (content) marketing is crucial in today’s markets.
Spending on content marketing, video marketing, and social media content creation will increase by 15.1% in 2013 to total $118.4 billion, according to eMarketer. What does that mean? It means more and more marketers are allocating their budgets toward content, and there is no sign of this slowing down. (Roy, n.d.) Is this a growth industry? According to the Bureau of Labor Statistics, projected consistent growth in all fields from 2010 through 2020 should average to about 6.1% (Bureau Of Labor Statistics, 2012, para. 9). Additionally, Cloud and mobile computing will continually drive the industry, and it is believed that within the next several years many companies that have been reluctant to the changes will adapt to these new methods (Bureau Of Labor Statistics, 2012, para. 10). How will our company be poised to take advantage of them? With the recent cyber attacks we will dedicate a large amount of assets toward the prevention malware and virus protection.

(Bureau Of Labor Statistics, 2012)
The core competencies of our company are being ethical, focused, and open to feedback. Our customers deserve fair and moral service even at the risk of us not making money. We believe truth and honesty will ultimately bring return business. The central point of our customers issues are our issues, we will exhaust every avenue to resolve an issue. We truly want to serve our customers, so client feedback is crucial. We will review feedback daily and if need be make automatic changes immediately (even individually for some clients). What do I think will be our major competitive strength? Old-fashioned customer service has become a lost art, and we plan to do as much as possible so the client can be freed from hassles.
What background experience, skills, and strengths do I personally bring to this new venture? Personally, I have 15 years IT and management experience.
Proven success in implementing management, operations, technical and interpersonal skills to increase productivity, reliability and teamwork to benefit the company. Senior team leader for security, repair, installation, migration, and maintenance of large-scale Windows and Apple systems and infrastructure of over 2000 end users. Hands on experience as a Master skill-level repairman of laptops/desktops (Windows systems vendor neutral) including the installation and repair of hard drives, network cards, CPUs, motherboards, power supplies, printers, monitors. In compliance with Telecommunications Industry Association (TIA)/ Electronic Industries Alliance (EIA) standards, I am proficient in terminating, testing, and installation of Category 5/5e/6 Ethernet cabling. Hands on skill and servicing with Samsung Chromebook, Apple iMac, MacBook, MacBook Pro, MacBook Air, complete system repair. Master computer support specialist (Tier 3)/help desk support staff troubleshooting software, hardware, and network issues, using remote management software on Apple, and Windows operating systems (telephone support). Here is a list of other skills that I possess: * Wireless Networking, 10/100/1000 Ethernet * Virtual private network (VPN) software, LAN, TCP/IP Protocol, * Cloud applications/solutions Android/iOS knowledge * Windows 2000/NT/XP/7/8 Remote Desktop Management * Apple Remote Desktop * Apple 10.4/10.5/10.6/10.7/10.8 * Microsoft Office 2007/2010(Windows) * Microsoft Office 2008/2011 (Macintosh) * AppleScript commands * UNIX commands * Windows Power Shell * Ubuntu, Linux * Deployment/Imaging Windows (Ghost, CloneZilla, Windows Automated Installation Kit) * Deployment/Imaging Apple (Disk Utility, Deploy Studio, Carbon Copy Cloner), Virtual Environment tools (Virtual Box)

As owner I have researched the methods of ownership and I believe that the best form of ownership would be that of a Limited Liability Corporation (LLC) would protect and serve the investors. Provide that if the business does not meet expectations and that liquidation occurs I want to protect all of my investors to want they actually invested. Nevertheless, the advantages that LLC's provide are personal liability protection, management flexibility, and tax classification advantages. For business customers, the demographic factors that we are seeking are small businesses (from 1 to 1000 employees) located in St. Louis or Kansas City. Specifically looking for businesses and firms that do not possess any IT staff, however, can assist small IT departments. Startup expenses that have been tabulated are strictly based on estimates. I have invested personally $40,000 cash, $100,000 (@ 8%) loan from Bank Of America. Also, I have secured $280,000 dollars from investors with the promise of 8% after the first year and 10% there after. The startup expenses and capitalization chart (Table 1) that is provided presents a best estimate with a larger than normal contingency fund for the unknown. In addition, the profit and loss projection again offers the best educated guess. Most of the numbers provided are contracts that have been negotiated and secured. Notice that all employees are salary and payroll expense are marked $0 dollars. To cut cost the owner has decided to manually do the taxes and pay the salaries out of the company's account. The projections for outside services, supplies, repairs & maintenance are again the estimated best guess, however, the advertising budget (Synergy Marketing Group) will be paid in full each January per annual contract. Based on the estimates I have elected to omit taxes section purely because of the regulation policies in the next year, this too could decrease the company's net profit. Based on the numbers tabulated, the company looks to make a net profit of $42,900. Based on the funds invested, $420,000 dollars what would be the possible value of the business today, but in 5 to 10 years from now? Using the total invested
$420,000 dollars, FV = PV (1+i) N = FV = $420,000 (1 + 10%)5, the value of the company should be estimated to be $676,414 dollars in 5 years and $1,089,371 dollars in 10 years. Furthermore, how will the initial investors do on their investments? After the first year the $280,000 dollar investment should be worth closed to $290,330.10. After the first year investors should see an additional increase of 10% making their stake in the company close to $305,833. The personal bank loan of $100,000 dollars will be settled in approximately 6.4 years (77 payments) at the rate of $1667 dollars a month. The company has an operating margin of 8.76%, meaning the company makes at least 9 cent on a dollar. The average cost of services per hour is $50.00 dollars, and based on the breakeven analysis at 32,308 hours of service billed the company will reach it's breakeven point. All things being equal, if the production level remains the consistent the company should breakeven in 4.3 years. The debt to equity ratio is .74, meaning that if the ratio is greater than 1, the majority of assets are financed through debt. If it is smaller than 1, assets are primarily financed through equity. As far as pricing, to be more cost effective and reasonable we took the average of the table below and applied that price to all services ($83.85). The aggressive strategy will definitely woo customers.
Table 1: Startup Expenses Reserve for Contingencies | | $100,000 | | | | Working Capital | | $260,260 | | | | Summary Statement | | | | | | Sources of Capital | | | Owners' and other investments | | $320,000 | Bank loans | | $100,000 | Other loans | | - | Total Source of Funds | | $420,000 | | | | Startup Expenses | | | Lease (St. Louis & Kansas City) | | $18,240 | Leasehold improvements | | $2,000 | Capital equipment | | $12,000 | Location/administration expenses | | $5,000 | Opening inventory | | $1000 | Advertising/promotional expenses | | $7,500 | Other expenses | | $14,000 | Contingency fund | | $100,000 | Working capital | | $260,260 | Total Startup Expenses | | $420,000 | | | | | | | Security and Collateral for Loan Proposal | | | | | | Collateral for Loans | | Value | Real estate (Owner's Property) | | $480,000 | Other collateral (Owner's Stocks & Bonds) | | $123,000 | Other collateral (Owner's Vehicles) | | $66,000 | Other collateral | | - | | | | | | | Owners | | | Marvin Hardy | | | Stone Hardy | | | Garrison Hardy | | | | | | | | | Loan Guarantors (other than owners) | | | Bank Of America | | | | | | | | | | | |

Personal Financial Statement of: | Outer Body IT Support & Consulting | | As of 1/1/2014 | | | | | | Assets | Amount in Dollars | Cash - checking accounts | $40,000 | Cash - savings accounts | 260,260 | Life insurance | 400,000 | Personal property | 189,000 | Retirement Funds | 500,000 | Real estate | 480,000 | Total Assets | $1,869,260 | | | Liabilities | Amount in Dollars | Current Debt | $420,000 | Notes payable | - | Taxes payable | 5,000 | Real estate mortgages | 50,000 | Other liabilities | 10,000 | Total Liabilities | $485,000 | | | Net Worth | $1,384,260 | | | | |

Table 2: Profit and Loss Projection (12 Months) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fiscal Year Begins | | | | | | | | | | | | | | | | | | | | | | | | | | | Jan-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | IND. % | Jan14 | % B/A | Feb-14 | % | Mar-14 | % | Apr-14 | % | May-14 | % | Jun-14 | % | Jul-14 | % | Aug-14 | % | Sep-14 | % | Oct-14 | % | Nov-14 | % | Dec-14 | % | YEARLY | % | Revenue (Sales) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Support | | $14,500 | - | $20,000 | - | $10,000 | - | $20,000 | - | $10,000 | - | $20,000 | - | $10,000 | - | $19,000 | - | $40,000 | - | $10,000 | - | $20,000 | - | $10,000 | - | $203,000 | - | Consulting | | $10,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $5,000 | - | $65,000 | - | Repair | | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $9,000 | - | $108,000 | - | Total Revenue (Sales) | $33,500.00 | 0.0 | $34,000.00 | 0.0 | $24,000.00 | 0.0 | $34,000.00 | 0.0 | $24,000.00 | 0.0 | $34,000.00 | 0.0 | $24,000.00 | 0.0 | $33,000.00 | 0.0 | $54,000.00 | 0.0 | $24,000.00 | 0.0 | $34,000.00 | 0.0 | $24,000.00 | 0.0 | $376,000.00 | 0.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary expenses | | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $14,583 | - | $174,996 | - | Payroll expenses | | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | Outside services(Subcontracted repairs / supportShort-term) | | $10,000 | - | $0 | - | $$10,000 | - | $$10,000 | - | $0 | - | $0 | - | $0 | - | $$10,000 | - | $$10,000 | - | $0 | - | $0 | - | $0 | - | $50,000 | - | Supplies (Office and Operating) | | -$2,000 | | $2,000 | | $2,000 | - | $0 | - | -$2,000- | | $0 | | -$2,000- | | $0 | | $0 | - | $2,000- | | -$2,000- | | $14,000 | - | Repairs and Maintenance | - | $4,000 | | $0 | - | $0 | - | $0 | - | $0 | - | $0 | | $2,000- | - | $0 | - | $0 | - | $2,000 | | $0 | - | $8,000 | - | Advertising | | $20,000 | | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $20,000 | - | Car, delivery and travel | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $500 | - | $6,000 | - | Accounting And legal | $2,500 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $$2,500 | - | Rent | | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $1400 | - | $16,800 | - | Telephone | | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $8400 | - | Utilities | | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $700 | - | $8400 | - | Insurance | | $2,000 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $2,000 | - | Taxes | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | Interest (Loans and Investor Interest) | | $30,400 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $30,400 | - | Depreciation | | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | 0 | - | $0 | - | Misc. (unspecified) | | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | $0 | - | 0 | - | $0 | - | Total Expenses | | $82,783 | | $23,883 | | $29,883 | | $29,883 | | $17,883 | - | $19,883 | | $17,883 | | $31,883 | | $27,883 | - | $17,883 | | $19,883 | | $17,883 | - | $341,496 | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net Profit | | -$49,283 | - | $10,117 | - | -$5,883 | - | $4,117 | - | $6,117 | - | $14,117 | - | $6,117 | - | $1,117 | - | $26,117 | - | $6,117 | - | $14,117 | - | $6,117 | - | $42,900 | - |

TABLE 3

CONTRACTOR RATES Q1 2012 | | | Role | Rate | Status | Business intelligence consultant | $123.84 | HD | Architect | $113.78 | HD | Project manager | $113.33 | HD | Accounting systems | $106.86 | HS | Agile | $99.02 | HS | Project management | $92.06 | HS | Account manager | $89.82 | HD | Quality assurance manager | $85.63 | HD | Networking | $85.63 | HS | Business analyst | $84.19 | HD | Analyst programmer | $82.87 | HD | Business analytics | $81.87 | HS | .NET development | $80.28 | HS | Data conversion lead | $78.63 | HD | Network designer | $78.06 | HD | Engineering | $70.06 | HS | Cisco | $69.15 | HS | Active directory | $67.95 | HS | Help desk/support | $37.88 | HS | Desktop/network support | $36.12 | HD | | $1677.03 | | | Source: ITCRA SkillsMatch | | | | |

(Kidman, 2012)

Bibliography

Borysowich , C. (9/11/2009.). Retrieved from http://it.toolbox.com/blogs/enterprise-solutions/defining-an-it-support-organization-34073

Bureau Of Labor Statistics. (3/29/2012). Retrieved from http://www.bls.gov/ooh/Computer-and-Information-Technology/

Kidman, A. (2012, May). Retrieved from http://www.lifehacker.com.au/2012/05/what-are-the-hourly-rates-for-it-contractors/

Roy, J. [Web log message]. Retrieved from http://engage.tmgcustommedia.com/2013/01/24-stats-to-make-you-a-believer-in-the-power-of-content/