corporate software sales by regan rose

This business plan outlines the strategy for sales of enterprise software planning solutions to mediumsized companies and franchises in Bangladesh. Bangladesh Corporate Software Sales (BBCSS) will act as the direct sales arm of a software manufacturing firm based in Oregon. We expect a high degree of profitability based on our plan to key in on businesses that have already expressed the need for such services and products to the software manufacturer. Our management expertise in dealing with corporate decision makers and our partner's reputation will be the cornerstone of our success. Company Summery BCSS provides enterprise-corporate planning software solutions. We identify companies' planning needs and work with a third-party manufacturer to create software to address these needs. Although the actual software is produced out-of-house, we guarantee the customer the right solution. Objectives • Market a business planning software package to corporate managers and achieve Tk1000 in commission fees in year one. • Customize the software to the individual needs of each client. • Provide training and follow-up service to each client. Mission The employees of BCSS recognize that information is vital for management and presenting that information in an efficient and easily understood framework is crucial. Also, not every business manager requires similar tools; what works for a service based company might be useless for a manufacturer. That's why we market an already proven third-party software planning tool which we will customize to the client's individual needs. Although we recognize the intimate relationship between profitability and quality products, we know that our success is ultimately dependent on the well-being of our employees. Keys to Success The success of our company is dependent on our ability to: • Anticipate clients’ needs. • Adapt software solutions to these needs. • Identify industries/corporations that need planning tool

Start-up Summary Start-up costs, which cover phone calls, office furniture, letterhead and business cards, come to Tk 3,050. These costs will either be financed by owner investment or through financing from the software manufacturing partner. Details and assumptions are summarized in the following chart and table.

Start-up

Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Consultants Insurance Rent Research and development Expensed equipment Other Total Start-up Expenses Start-up Assets Needed Cash Balance on Starting Date Other Current Assets Total Current Assets Long-term Assets Total Assets Total Requirements Funding Investment Investor 1 Investor 2 Other Total Investment Current Liabilities Accounts Payable

Tk300 Tk250 Tk0 Tk0 Tk1,000 Tk0 Tk0 Tk1,500 Tk0 Tk3,050 Tk11,000 Tk0 Tk11,000 Tk0 Tk11,000 Tk14,050

Tk9,000 Tk4,550 Tk0 Tk13,550 Tk500

Current Borrowing Other Current Liabilities Current Liabilities Long-term Liabilities Total Liabilities Loss at Start-up Total Capital Total Capital and Liabilities

Tk0 Tk0 Tk500 Tk0 Tk500 (Tk3,050) Tk10,500 Tk11,000

Highlights

Company Locations and Facilities The company will be located in a home-based office in Portland, Oregon. This location is ideal, as it is close to the software manufacturer's facilities and several of the first potential clients' home offices. Business environment The business environment that affects our venture is characterized belowDemographical environment: Now it’s a world of increasing technology and our country is about to adjust its step with it. People of all age are increasingly dependent on the Internet and it helps to communicate with outer world. Economical environment: The current GDP growth rate is 6.5% and expected to grow at a higher than this rate in year 2006. So, the economic growth is very excellent in the country and hence we can capitalize upon the fact i.e. demand for goods increasing. Political environment: There is huge political uncertainty in the country. So we have to face the political uncertainty to be successful. It is our of our risk of the on going business. Legal environment: Legal environment is about good because the order and law situation is quite good with the activity of “QUICK JUDGEMENT TRIBUNAL” and “RAB”. Cultural and social environment: The city and sub-urban life of the country is very much dependent on internet and communication technology. But the urban area is not likely to that extent. So the culture of the country is not enough to judge the venture.

2.0 Products and Services BCSS will provide medium- and large-sized companies with enterprise-wide collaborative planning solutions. We will also provide consulting services by helping companies recognize opportunities for using technology to streamline their business processes. Finally, we will provide complete training for the use of solutions purchased from us. Product and Service Description Software BCSS software products consist of a business planning software package that is proven in the consumer market. In fact, this product is the top-rated and best-selling small business planning package. The enterprise version will be similar to the consumer version however; it will be modified to fit the needs of different clients. The product will allow corporate sales forces and franchises to use planning tools to achieve tremendous efficiencies in their business processes. In essence, a sales force will be able to write concise business plans for any customer and through the use of an extranet, allow the customer to collaboratively plan their own account. Franchises will be able to create a road map of their business plans that corporate managers can monitor and adjust accordingly. The possibility exists to customize the product to work with other collaborative tools such as Lotus Notes and the clients email applications. Consulting BCSS will perform an analysis of all potential clients' planning strategies and tactics as well as their degree of aptitude with planning software and information technology. The goal of this analysis is to ensure that all clients get a solution that best fits their needs and capabilities. Whether they decide to purchase the product or not they will have an expert analysis of their planning strategies. Training BCSS will provide further value to our customers, and ease the customer service burden on our partner, by ensuring that all product users are properly trained in the use of all software solutions. Interface Through the software manufacturer, BCSS will provide an additional product which will give the client a dedicated service representative--eliminating the need for product updates. This will in essence create a "living" product which can grow and adapt with the clients' needs. The interface representative will function through the clients' established extranet. Competitive Comparison Alternative products do not offer a complete package of tools. For example, to get similar results from another product(s) the client would have to integrate complex spreadsheets, word processing software, instructions and Web based collaboration themselves. Technology The software package runs on Windows 95, 98, 2000, Windows NT, and Macintosh platforms.

Market Analysis Summary We operate in the business-to-business segment of e-commerce which recent research estimates transactions in excess of Tk160 billion (www.e-commerceguide.com). Our market is further segmented into companies with sales forces greater than 100 people and companies with branches, divisions or franchises in excess of 100 units. Market Segmentation We segment our market by size of sales force and number of company subunits. Our target customers will have sales operations in excess of 100 direct sales representatives or more than 100 organizational subdivisions or franchises. For the first three years of operation we will focus on U.S. companies in the Pacific Northwest, California and the Southwest. Geographically this make sense as our office is central to these regions and management has established key client contacts in each of these areas. Larger clients are more likely to benefit from the efficiencies our product offers and will

provide fees that will sustain our profitability. Exact figures for the number of businesses are hard to determine, however, the lean structure of our company will allow us to be profitable by generating two to three new clients per year. Market Analysis (Pie)

Market Analysis Potential Customers Sales Companies Franchises Other Total

Growth

2000

2001

2002

2003

2004

CAGR

500

515

530

546

562

2.97%

2% 5% 2.49%

800 200 1,500

812 210 1,537

824 221 1,575

836 232 1,614

849 244 1,655

1.50% 5.10% 2.49%

Target Market Segment Strategy Our strategy is designed to target: A Medium- to large-size organization whose sales forces provide their clients with proposals and plan that the client either collaborates on, or would benefit from collaboration. Companies that sell franchise rights and take an active role in the success of their franchises. Larger clients that will provide greater revenues through a larger volume of software licensing sales and greater chance of selling client interface solution. Market Needs Customization-products that strengthen their brand and address their differences: We will "Private Label" the solution so as to further strengthen the clients' brand. We recognize that different clients will have varying levels of sophistication and we will design different product templates for each customer. Speed, efficiency and information: Our product will allow the client to make better and faster business decisions and receive quicker feedback from their end-customer. Managers will have the ability to monitor the progress and profitability of their staff. Market Trends The most significant trend affecting our company is the growth of business-to-business e-commerce. More and more firms recognize the need to take advantage of the exchange of information over the Internet and our products and services rely on this. Market Growth The fastest growing segment of the e-commerce industry is the business-to-business sector. This segment has gone from less than Tk50 billion to more than Tk160 billion in three years. Service Business Analysis Customers tend to buy enterprise software solutions based on reputation, price and reliability. Also, compatibility with existing or legacy systems is very important. With this in mind, the key decision makers and influencer(s) will be the companies' chief financial officer and chief information officer. Business Participants

There are currently several companies that provide business planning software for desktop applications, but as yet none of these offer enterprise-wide solutions. Additional competitors are companies which provide word processing, spreadsheet and collaborative planning software, as well as publishers of business planning literature.

Strategy and Implementation Summery Various strategy/and implementation topics are discussed in the following sections. Competitive Edge Our greatest strength and competitive edge is the reputation and success of the desktop software product. This product is the market leader in sales and consumer ratings. Our success will rely upon building on those strengths. We will also rely on our experience working with decision makers at the corporate level. Marketing Strategy We will first target the corporate offices of franchises with more than 100 units, and companies with sales forces in excess of 100 personnel. The software manufacturer has already provided the names and contact information for several firms which fit this profile. These firms have approached the software manufacturer about enterprise solutions in the past. The software firm has also provided a list of larger businesses that purchased an executive version of their desktop product. We will contact these firms with the idea of helping them take this planning tool to the next level. Management of BCSS has business contacts at the decision maker level for several more prospects as well. These will be our secondary targets. Tertiary targets will come from lists of firms fitting the above criteria which management has generated through Web-based market research efforts. Tactics for approaching these prospects will be indirect, i.e., we will contact sales managers and/or franchisees to establish whether the firm fits our profile and then probe for upper or middle level management contact information. We will attempt to establish a face-to-face meeting with decision makers (CFO, CIO, and COO) where we will present a proposal tailored to their needs. If possible, we will also have this proposal reside on an extranet so that the client can modify the proposal and see first-hand how the product and service work. Positioning Statement This is an expensive solution to develop and maintain, and the price will reflect the premium quality of the offering. Set-up costs to the client will run between Tk100K-Tk200K. The dedicated service option is approximately Tk5K/year. Software licenses are Tk100/year. Sales Strategy Our sales consist of two services--consulting and training, and one product-the software/extranet package (called start-up sales). Our services provide a fraction of the revenue we will receive for the software/extranet solution, but they will sustain our cash flow needs while we develop the enterprise sales. Sales of consulting, training and product are predicted to grow at 30%, 20% and 10% respectively. Costs associated with these sales are estimated at 10% for start-up sales, 40% for consulting fees and 50% for training. We expect these costs to decrease two, five, and ten percentage points respectively in years two and three. Sales Monthly

Sales Forecast Sales Forecast Sales Start-up fees Consulting fees Training fees Total Sales

FY 2001 Tk150,000 Tk2,400 Tk2,550 Tk154,950

Direct Cost of Sales FY 2001 Start-up fees Tk15,000 Consulting fees Tk960 Training fees Tk1,275 Subtotal Direct Cost of Tk17,235 Sales

FY 2002 Tk165,000 Tk3,120 Tk3,060 Tk171,180

FY 2003 Tk189,750 Tk4,368 Tk3,978 Tk198,096

FY 2002 Tk13,200 Tk1,092 Tk1,224

FY 2003 Tk15,180 Tk1,529 Tk1,591

Tk15,516

Tk18,300

Management Summery Ronald Ivanhoe, 33, founded the company in September of 2000 to take advantage of a partnership opportunity with a highly successful Pacific NW software company. He has an MBA in marketing and e-commerce from the University of Arizona, and has designed numerous successful business plans for companies in the manufacturing, e-commerce and entertainment sectors. He consults with insurance brokers, e-commerce, and manufacturing companies in marketing strategies. He has lived in Asia for five years, speaks Japanese fluently and currently resides in Portland, OR. Personnel Plan Payroll expenses reflect the salary of Mr. Ivanhoe. Personnel Personnel Plan Name or title Other Total People Total Payroll

FY 2001 Tk0 Tk0 0 Tk0

FY 2002 Tk0 Tk0 0 Tk0

FY 2003 Tk0 Tk0 0 Tk0

Financial Plan The most crucial issue affecting our financial plan is the receipt of start-up fees for the customization and installation of the software and extranet solution. This drives our cash flow, and all other aspects of our operation. Important Assumptions This table summarizes the general assumptions used to project our balance sheet. General Assumptions

General Assumptions FY 2001 Plan Month 1 Current Interest Rate 10.00% Long-term Interest Rate 8.00% Tax Rate 25.42% Sales on Credit % 50.00% Other 0

FY 2002 2 10.00% 8.00% 25.00% 50.00% 0

FY 2003 3 10.00% 8.00% 25.42% 50.00% 0

Key Financial Indicators The chart below shows the relative relationships, year-to-year, of four business indicators; sales, gross margin, operating expenses, collection days of accounts receivable. Benchmarks

Break-even Analysis We include salary and fixed overhead as fixed costs above and beyond start-up costs. This requires a break-even in sales/month for year one of Tk8,680. Break-even Analysis

Break-even Analysis Break-even Analysis: Monthly Units Break-even Monthly Revenue Break-even Assumptions:

8,680 Tk8,680

Average Per-Unit Revenue Tk1.00 Average Per-Unit Variable Cost Tk0.25 Estimated Monthly Fixed Cost Tk6,510 Projected Profit and Loss Monthly P&L fluctuate drastically due to the work required before a sale is closed. One to two months prior to closing a sale, we will incur travel costs and other miscellaneous expenses associated with our consulting service. Expenses are approximately 40% of fees. Set-up costs to the client (our commission), drive revenue in the period a sale is made, as do training fees. Associated direct costs are 10% and 50% respectively; however, as we anticipate a learning curve in training costs, these decrease to a flat rate in year two of eight percent. The direct cost of start-up fees is our major expense. As the client prepares to go live with the product, we will need to travel more frequently to the site, bring in their key end-customers, and travel to the manufacturer more frequently as well. We have anticipated that start-up fees will grow 10% in year two and 15% in year three. Consulting fees are projected to grow at a steady rate of 20% and training fees at 30%. As a result, net profit is projected to grow at a conservative and realistic three percent for the first three years. Profit and Loss Pro Forma Profit and Loss FY 2001 Sales Tk154,950 Direct Costs of Goods Tk17,235 Other Tk0 -----------Cost of Goods Sold Tk17,235 Gross Margin Tk137,715 Gross Margin % 88.88% Expenses: Payroll Tk0 Sales and Marketing and Tk4,000 Other Expenses Depreciation Tk0 Leased Equipment Tk0 Utilities Tk480 Insurance Tk1,440 Rent Tk4,200 Payroll Taxes Tk0 Other Tk0 -----------Total Operating Tk10,120 Expenses Profit Before Interest Tk127,595 and Taxes Interest Expense Tk0 Taxes Incurred Tk31,888 Net Profit Tk95,707 Net Profit/Sales 61.77%

FY 2002 Tk171,180 Tk15,516 Tk0 -----------Tk15,516 Tk155,664 90.94%

FY 2003 Tk198,096 Tk18,300 Tk0 -----------Tk18,300 Tk179,796 90.76%

Tk0

Tk5,000

Tk6,000

Tk0 Tk0 Tk0 Tk0 Tk4,200 Tk0 Tk0 ------------

Tk0 Tk0 Tk0 Tk0 Tk4,350 Tk0 Tk0 ------------

Tk9,200

Tk10,350

Tk146,464

Tk169,446

Tk0 Tk36,616 Tk109,848 64.17%

Tk0 Tk43,068 Tk126,378 63.80%

Projected Cash Flow Our cash flow assumptions are dependent on the start-up fee. We will receive 15-20% of the total fee in commission. Historical values of start-up fees are from Tk150K to Tk200K and the accounts have taken from one to four months to close. Conservative estimates lead us to believe that we can attain sales revenue from start-up fees of between Tk135K and Tk240K in year one. Cash

Cash Flow Pro Forma Cash Flow FY 2001 Cash Received Cash from Operations: Cash Sales Tk77,475 Cash from Receivables Tk77,195 Subtotal Cash from Tk154,670 Operations Additional Cash Received Sales Tax, VAT, Tk0 HST/GST Received New Current Borrowing Tk0 New Other Liabilities Tk0 (interest-free) New Long-term Tk0 Liabilities Sales of Other Current Tk0 Assets Sales of Long-term Tk0 Assets New Investment Tk0 Received Subtotal Cash Received Tk154,670

FY 2002

FY 2003

Tk85,590 Tk85,561

Tk99,048 Tk98,999

Tk171,151

Tk198,047

Tk0

Tk171,151

Tk198,047

Expenditures FY 2001 Expenditures from Operations: Cash Spending Tk15,702 Payment of Accounts Tk39,957 Payable Subtotal Spent on Tk55,659 Operations Additional Cash Spent Sales Tax, VAT, Tk0 HST/GST Paid Out Principal Repayment of Tk0 Current Borrowing Other Liabilities Tk0 Principal Repayment Long-term Liabilities Tk0 Principal Repayment Purchase Other Current Tk0 Assets Purchase Long-term Tk0 Assets Dividends Tk0 Subtotal Cash Spent Tk55,659 Net Cash Flow Cash Balance

Tk99,011 Tk110,011

FY 2002

FY 2003

Tk16,033

Tk19,405

Tk45,213

Tk51,436

Tk61,246

Tk70,840

Tk0

Tk0 Tk61,246

Tk0 Tk70,840

Tk109,905 Tk219,916

Tk127,207 Tk347,123

Projected Balance Sheet Balance sheet is a result of key assumptions and estimated sales/cash flows. Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets

FY 2001 Tk110,011 Tk280 Tk0 Tk110,291

FY 2002 Tk219,916 Tk309 Tk0 Tk220,226

FY 2003 Tk347,123 Tk358 Tk0 Tk347,481

Tk0

Tk0 Tk110,291

Tk0 Tk220,226

Tk0 Tk347,481

Liabilities and Capital Current Liabilities FY 2001 Accounts Payable Tk4,085 Current Borrowing Tk0 Other Current Liabilities Tk0 Subtotal Current Tk4,085 Liabilities

FY 2002 Tk4,171 Tk0 Tk0

FY 2003 Tk5,048 Tk0 Tk0

Tk4,171

Tk5,048

Long-term Liabilities Total Liabilities

Tk0 Tk4,085

Tk0 Tk4,171

Tk0 Tk5,048

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities Capital Net Worth

Tk13,550 (Tk3,050) Tk95,707 Tk106,207

Tk13,550 Tk92,657 Tk109,848 Tk216,055

Tk13,550 Tk202,505 Tk126,378 Tk342,433

Tk110,291

Tk220,226

Tk347,481

Tk106,207

Tk216,055

Tk342,433

and

Business Ratios The following table outlines important business ratios for pre-packaged software, as described by the standard industry classification (SIC) index, 7372. Ratios Ratio Analysis

Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities

Industry

FY 2001

FY 2002

FY 2003

0.00%

10.47%

15.72%

Profile 9.70%

0.25%

0.14%

0.10%

21.50%

0.00%

3.00%

0.00%

45.70%

100.00%

70.20%

0.00% 100.00%

29.80% 100.00%

3.70%

1.89%

1.45%

42.40%

Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets

0.00%

19.20%

3.70% 96.30%

1.89% 98.11%

1.45% 98.55%

61.60% 38.40%

100.00% 88.88%

100.00% 90.94%

100.00% 90.76%

100.00% 100.00%

65.84%

64.01%

60.68%

79.40%

0.00%

1.30%

82.35%

85.56%

85.54%

2.20%

27.00 27.00

52.80 52.80

68.84 68.84

1.51 1.16

3.70%

1.89%

1.45%

61.60%

120.14%

67.79%

49.48%

3.50%

115.69%

66.51%

48.76%

9.20%

FY 2002 64.17% 50.84%

FY 2003 63.80% 36.91%

n.a n.a

276.70

n.a

1 0.00

n.a n.a

10.86

10.36

n.a

0.78

0.57

n.a

0.02

0.01

n.a

1.00

n.a

Additional Ratios FY 2001 Net Profit Margin 61.77% Return on Equity 90.11% Activity Ratios Accounts Receivable 276.70 Turnover Collection Days 45 Inventory Turnover 0.00 Accounts Payable 10.66 Turnover Payment Days 32 Total Asset 1.40 Turnover Debt Ratios Debt to Net Worth 0.04 Current Liab. to 1.00 Liab.

Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout

Tk106,207

Tk216,055

Tk342,433

n.a

0.00

n.a

0.71

1.29

1.75

n.a

26.93 1.46 0.00

52.73 0.79 0.00

68.76 0.58 0.00

n.a n.a