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Executive Summary

Ibrio Incorporated is a small start-up firm located in the business district of Palmyra, Pennsylvania. We
offer Internet and Web-related services to small businesses in the Central Pennsylvania area. The
services we offer include website development and design, hosting, maintenance, marketing, and
analysis.

Given our experience and expertise in both commercial Web development and business-to-business
sales, we believe we can offer a unique and superior service to small business owners, in comparison to
what is currently available.

The demand and growth rate for Web development and marketing services in the small business market
is at an all time high and shows no sign of slowing anytime soon. Even more astonishing is the fact that
very few Web development companies have taken advantage of the opportunity, as there are no
dominating participants in this huge market.

We believe the reason for this virtually untapped market is due to expensive project costs, the highest
profit margins in Web development today are in servicing large- and medium-sized corporations. We
have developed a system that dramatically reduces steep project costs and henceforth will allow us to
offer the same high-end Web development services as larger companies receive at a much lower cost
to the client.

This business plan will highlight many aspects of our system and our business. It will detail market
growth and demand, and it will outline our projected cash flow and profit margins over the next three
years. All numbers regarding our projected company growth are based on previous information
gathered by activity in the company over the last few months of operation.

1.1 Objectives
1. Revenues of $200,000 by month 10.
2. Net Profit of 25% in year one and 35% in year two.
3. 65% Gross margin by month 10.
1.2 Keys to Success
1. Offering high-end Web services to small businesses in a way that they can understand and
afford.
2. Build a strong residual income through secondary subscription-based services tailored for
small business (website hosting, marketing, maintenance, consulting).
3. Establishing strategic partnerships with area Internet service providers and computer
consulting companies to refer small business website projects to us in exchange for high payoffs.
1.3 Mission
Our mission is to provide affordable, accessible, and streamlined Internet and Web services to small
businesses. We have developed a system for offering many different types of Web services (site
development, hosting, marketing, and maintenance) that are exclusively tailored to fit the needs and
resources of small companies.
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Company Summary
Ibrio Incorporated is a start-up company that will provide high-end, affordable Internet related services to
small businesses that are looking to expand their existing marketing efforts to reach the Web. We have
a system established that will allow us to offer website development, hosting, marketing, and
maintenance of the same caliber that large companies take advantage of, at a very affordable rate.

2.1 Company Ownership


Ibrio has been incorporated as a Pennsylvania S corporation based in Lebanon county as of August 28,
2000. The corporation is privately owned by David W. Hickethier, chief operations officer and Richard
B. Andrews, chief technology officer.

2.2 Start-up Summary


Our start-up plan is a well thought out base to propel us forward with the proper equipment, marketing
tools, and personnel to start our venture. An initial cash investment by the owners in the amount of
$7,300 to purchase office furniture, computer equipment, and software has been made. Both owners
have also invested a combined time of approximately 3,500 working hours toward the start-up of Ibrio
Inc.

The cash requirement of $17,000 are funds that we need to provide the capital to run our business for
the first few months. This capital will fund two employees payroll and equipment/supplies to get them
started. It will cover business expenses for a few months until our cash flow takes over.

The four-year $20,000 loan has been secured from the XYZ bank to supply the needed capital
explained above.
Start-up

Requirements

Start-up Expenses

Business Cards $60

Phone Line Install (Two Lines) $150

Computer Monitor $200

InfoUSA Database $400

Office Equipment $580

Dedicated Server Setup Fee $150

Membership Fees $600

DSL Setup and Install $350

Phones $160

Total Start-up Expenses $2,650

Start-up Assets

Cash Required $17,000

Other Current Assets $7,650

Long-term Assets $0

Total Assets $24,650

Total Requirements $27,300

Start-up Funding

Start-up Expenses to Fund $2,650

Start-up Assets to Fund $24,650

Total Funding Required $27,300


Assets

Non-cash Assets from Start-up $7,650

Cash Requirements from Start-up $17,000

Additional Cash Raised $0

Cash Balance on Starting Date $17,000

Total Assets $24,650

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $20,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $20,000

Capital

Planned Investment

David W. Hickethier $3,650

Richard B. Andrews $3,650

Additional Investment Requirement $0

Total Planned Investment $7,300

Loss at Start-up (Start-up Expenses) ($2,650)

Total Capital $4,650

Total Capital and Liabilities $24,650

Total Funding $27,300

2.3 Company Locations and Facilities


We have an established commercial office space in Palmyra, PA under a two year lease that will expire
in October of 2001 with an option to renew every 60 days thereafter. There is approximately 1,400 sq. ft.
capable of housing workstations for up to 12 workers. Palmyra is in Lebanon county, less than a 60
minute drive to anywhere in our four county target market area.

Read more: http://www.bplans.com/web_design_business_plan/company_summary_fc.cfm#ixzz17uAWxNY4


Services
Ibrio Inc. is a full-service Internet solutions provider for small businesses. We focus mainly on the Web,
offering the following as our key 'Bread & Butter' website services:

• Design and development.


• Marketing and analysis.
• Hosting and maintenance.
We currently offer the following secondary services:

• E-commerce development.
• Website renovations and upgrades.
• Application development (i.e. chatrooms, message boards, online polling, live-feed
audio/video, etc.).
• Website maintenance training.
• Internet/website education seminars.
• Database construction.
We have plans to offer the following services within the next year:

• Internet access service for small businesses.


• Local Area Network (LAN) installation.
• Intranet setup and installation.
• Result-based website marketing.
3.1 Service Description
Website Design and Development: The service that we offer to small businesses is modeled after the
service that larger Web development firms offer Fortune 1000 companies in the sense that it is
completely customized and unique to each individual client.
Website Marketing and Analysis: After we build the website for our client, or a new client introduces
us to their pre-existing site, we offer this service. As experts of the Web, we can analyze and test a
website based on an established set of standards that account for the website's aesthetic value,
scalability, functionality, ease-of-use, and main customer base. After an analysis has been made, we
then explore and present to the client a detailed list of the most efficient Internet marketing tools and
methods available to them within the constraints of their budget. This type of service is pertinent to our
company given the fact that a very large percentage of our clients are on a tight budget and can only
afford to take advantage of marketing efforts that are targeted directly at their desired demographic.
Website Hosting and Maintenance: This service is offered for two reasons. The first reason is
because they are both ongoing, continual services that we can use to establish and maintain a strong
residual income. The second reason for offering these services is to allow for packaging together with
other services either Ibrio Inc. offers, or services an outside company can provide, hence allowing us to
expand our range of small business Internet services.
3.2 Sales Literature
Ibrio Inc. currently distributes a sales folder with all the pertinent information about our company and
services. This folder includes our strong points, history, portfolio examples, and pricing packages info. It
also contains facts based on the growth and popularity of the Internet for small businesses.

Ibrio Inc. currently operates and maintains a fully-functioning website that provides information about the
company, plus a variety of helpful resources for small business owners which we will be constantly
updating.

In the next six months, we plan to produce and distribute bulk mail and fax flyers promoting our Web
development and hosting services to small businesses in Central PA to solicit new business.

We have plans to offer a more compact version of our main sales folder in a brochure format. This
brochure will be available both as a mailer to interested parties and as a sales solicitation in area
businesses.

3.3 Fulfillment
For the website design, development, marketing, analysis, and maintenance we will employ industry
professionals to handle our clients' needs. Working for the company presently is Brandon Andrews, a
professional website development engineer and strategist with four years of experience in the
commercial Web development industry. To keep employee costs low, we have designed a "team"
development system that will consist of two full-time sales people and three full-time Web developers.
Of the Web developers, one position will be filled by a highly-qualified senior Web professional and two
lesser-qualified, lower paid developers. All three will work full-time on separate projects provided to
them by the sales people. However, the senior developer will have the duty of maintaining the same
high quality level of work in the junior developers' projects, that our clients have learned to expect from
us now.

For the website hosting services we offer, Ibrio Inc. has formed several alliances with industry leaders to
provide top-rate, reliable hosting solutions. Forming the alliances has allowed us much flexibility in
important hosting features, customizability, and it has drove costs down dramatically. All these benefits
are crucial to preserving the integrity of our company as being a 'fully-rounded Internet solutions
provider' for small businesses.

3.4 Technology
It is a given that technology and keeping up with new innovations strongly influence our business. We
operate a Windows® based Local Area Network (LAN) in the office that is equipped with the most
current software and hardware tools available to meet our project requirements. Within the next year,
we will be investing in additional tools that will extend our capabilities in handling various types of
program files (i.e. Macintosh computers, large capacity data storage, and high-end image scanners).
We also have plans to purchase licensing agreements with our major software vendors to allow for
automatic upgrades in new software tools.

Currently we own and operate both a professional digital and film camera for the purpose of offering on-
site and in-house product and business photography to our clients. We would like to improve upon these
services in the near future by purchasing a more complete photography system, it has been our
experience that this is a service many small businesses are recognizing as a crucial part of their online
marketing efforts and would take advantage of it were we to offer such a service.

3.5 Future Services


Local Area Network Installation: These days, a quickly increasing number of small businesses are
using computers as a necessary tool in the everyday operations of the company. We would like to be
able to expand our current services to meet this new demand. We will handle every aspect of setting up
a small business with an internal network of computers from purchasing, installing, and configuring the
machines to software integration and educating the employees on proper usage and operating
functions.
Intranet Setup Installation: In our plan, after developing an Internet website for outside marketing
purposes, we would like to offer the service of implementing the website into the network for use in all
the business day-to-day operations. This would include extensive product/service cataloging, vital
employee and management information, sharing of accounting and inventory details, etc., all intended
for strictly company uses.
Internet Access for Small Business: This feature would act as another residual, packageable service.
We would target small businesses exclusively allowing us to provide more flexibility and affordability to
our clients through discounted high volume rates, value added service packages, and much more
aggressive technical support services.
Result-based Marketing: This is a service that no small business can turn down. We have plans to
offer aggressive, intensified marketing services with the fees based solely on results. To achieve this,
we are in the process of forming multiple partnerships and alliances with industry specific Internet
websites and various other software and service-oriented companies that provide specific marketing
services and tools based on results achieved. We feel as though offering this rare service will
dramatically increase our portfolio of clients.

Read more: http://www.bplans.com/web_design_business_plan/services_fc.cfm#ixzz17uAcFHdr

Market Analysis Summary


Ibrio Inc. will initially focus almost exclusively on small companies looking to develop an Internet
presence for the first time. We will market our services to small business owners as a "step-by-step"
process, initially starting out with a small, simple website, then gradually improving and adding to the
site and their entire online marketing efforts.

Although we plan to bring on many clients who simply will need an online presence and nothing more,
our most important and sought after clients will be those business owners who are ready to implement
a larger percentage of their company onto the Internet. This type of client will traditionally need one of
the following services:

• E-commerce/shopping cart.
• Database driven websites.
• Dynamic content and website features.
• Aggressive online website marketing.
4.1 Target Market Segment Strategy
Ibrio Inc. will focus the majority of sales and marketing efforts toward attracting small businesses. The
reason for this decision is simply the low amount of services available for a market with such a high
demand. In addition to the very promising supply and demand ratio, it is also technically easier and less
expensive to market to and attract small website projects than larger projects.

4.1.1 Market Needs


The need for small business Internet services has existed for several years. Small businesses and start-
up businesses alike are migrating onto the Web at an astonishing rate and making their online presence
a higher priority than in earlier years. We have noticed an enormous hole however in the small business
services that are currently available.

Without a doubt, there is a need for custom, high-end, dynamic services designed exclusively for small
businesses. At this point, the majority of our competitors are offering services tailored around big
business, to small business owners, or they are offering the exact opposite, one-dimensional, "cookie
cutter" type services.

While every small business has now recognized the need for having a presence on the Internet, many
do not know where to start, how much it will cost, or even how it will benefit their company. It has been
our experience by talking to small business owners that the decision to take advantage of the Web is
not a matter of 'if' but a matter of 'when.'

4.1.2 Market Trends


An important market trend right now is the one toward aggressive online and website marketing.
Although many small businesses are still waiting to gain an Internet presence, those who already have
are beginning to look for more options along the lines of improving their existing efforts. We believe that
in the upcoming years, small companies especially, will start to look for more ways to increase the traffic
to their websites.

Another important trend is the overall merging of daily business operations with the Internet and World
Wide Web. Just as the majority of large companies have already started to use the Web to handle
interoffice tasks, we believe that many smaller companies will begin to realize the time and money
saving advantages to this strategy.

4.1.3 Market Growth


Our target market has been growing and expanding toward Internet and Web usage at an astonishing
rate. In addition, Internet usage by our clients' customers has been growing exponentially. Below
are supporting facts on our target market growth:

• By 2001, small businesses (1-99 employees) will spend in upwards of $22 billion to either gain
an Internet presence or improve their existing efforts. This number is up from $12 billion in
2000 (Activemedia Research).
• Small and home-based business' Internet usage is at approx. 81%, this is an increase from
only 26% usage in 1996. It is estimated to reach almost 95% by the year 2004 (IDC Research).
• Total U.S. business Information Technology (IT) expenditures for 2000 are $119.1 billion and
will reach $285 billion by the year 2003. The year 2000 will also be the first year that U.S.
businesses spend more of their total IT expenditures on Web-related services than on IT
hardware (IDC Research).
• Currently, the total number of online users in the U.S. is 107 million, by 2004 that number will
grow to 210 million (IDC Research).
• E-commerce revenue will reach nearly $6.8 trillion by the year 2004, up from $48.6 billion in
2000 (Forrester Research Group).
4.2 Service Business Analysis
Web services and development companies vary greatly in the type of service they offer and the type of
client they attract. Ibrio Inc. will be relatively unique in the fact that we are marketing exclusively to small
businesses.

This industry consists of many small Web development firms usually less than 10 years old that
generally start out offering services to smaller companies but with long-term goals of catering to large,
corporate Web accounts.

4.2.1 Main Competitors


1. Teeple Graphics: Located approximately 10 miles from our Palmyra offices, they offer Web
development and graphic services.
Strengths: Teeple has a very strong clientele, by talking to several of their Web development
clients, we have come to the conclusion that Teeple offers a very dependable and high-quality
service.
Weaknesses: Teeple Graphics is owned and operated by George Teeple, he is also the only
employee working for the company out of his home, and does not run his business as a full-time
operation. In addition, Teeple Graphics requires all clients who operate an e-commerce website to
pay his company a commission on the revenue generated by the site, this is paid on top of the
development fee that Teeple charges.
2. Sharp Innovations: Located approximately 30 miles from our Palmyra offices, they offer Web
development services to small businesses in the Lancaster, PA area.
Strengths: Sharp Innovations has a large market share in its area, offering a very broad range of
services from Web development, e-commerce, graphic design, and Internet access.
Weaknesses: Sharp Innovations is a young company with very high overhead. They market
themselves as "The Small Business Internet Marketing Professionals of Central PA," but the types
of services they offer and their very high prices do not in anyway reflect the needs of small
business owners. It is also our opinion, after reviewing Sharp Innovations' portfolio that they lack a
certain level of technical and aesthetic design knowledge that so many small businesses are
beginning to demand.
3. Say1.net: Located approximately 10 miles from our Palmyra, PA location. They offer a wide
range of community and business-related Web services in the Lebanon, PA and surrounding
areas.
Strengths: Say1 has established a 'portal' type website designed to serve the Lebanon and
surrounding areas with useful information regarding community events and business listings. This
could serve as a valuable tool to their clients when marketing to that area.
Weaknesses: For a company that claims to be experts in marketing for small business, they do
virtually no advertising of their own and it appears that they lack in the ability to bring on clients
that are outside the city of Lebanon. Even though Web development is a service that Say1 offers,
it is only one in a long list of varied services and we believe this will dramatically hinder their focus
toward leading the industry in our market.
4. WebWorks: Located approximately 25 miles from our Palmyra, PA offices. WebWorks offers
Web development and marketing services to businesses in the Greater Harrisburg, PA area.
Strengths: WebWorks has been in the Web services business for almost six years and has a very
experienced team of developers and programmers. They also offer outstanding marketing
services.
Weaknesses: Although WebWorks is a direct competitor, they have begun to focus a large portion
of their services toward attracting medium- to large-sized companies. Their pricing is dramatically
higher than any competing firms in the Central PA area and they now have put into effect a policy
of only excepting jobs of a certain size.
4.2.2 Business Participants
The Web services and development industry consists mainly of three different types of firms.

The first type are the very large, high revenue companies who service larger Fortune 1000 corporations
and well-funded Internet based start-ups exclusively. In this category are only a few worldwide
participants that dominate.

The second type of firm offers pre-fabricated, all-in-one, proprietary type Web services to any size
company at a very low cost or without any cost. The participants in this category consist of a few
dominating companies that mainly all have additional sources of revenue and only offer Web services
as a value-added service or additional attraction.

The third type of firm is our classification, that is the smaller, usually very young companies that market
to small- and medium-sized businesses in their local area. Currently there are a large number of
participants in this category, but no dominating forces.

4.3 Market Segmentation


Our target market is separated into the four surrounding counties listed below:

Dauphin County: Located to the West, approximately five miles from our location. The number of
businesses is estimated at 6,723. It will make up 23% of our four county target area.
Lancaster County: Located Southeast, approx. 20 miles from our location. We would like to begin
marketing in this area within four months. The number of businesses is estimated at 11,299. It will make
up 40% of our target area.
Lebanon County: Our office is located in Lebanon County. Lebanon is the smallest of the four counties
and therefore we will market in proportion to its size. The number of businesses is estimated at 2,547. It
will make up 9% of our target area.
York County: Located Southwest, approx. 40 miles from our location. York county is the last of the four
counties we will market in. It will be late next year before we begin marketing in this county. The number
of businesses is estimated at 8,238. It will make up 28% of our target area.

Our business allows us to offer services to small companies, no matter their geographical location, and
we plan to do so, eventually expanding outside our immediate area. The above counties are where we
will market most heavily and expect to receive the majority of our work. We do expect to receive a small
portion from outside this target area due to ad placement in a national business directory.

The above demographic information can be found through the Geospatial & Statistical Data Center.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Dauphin County 2% 6,723 6,844 6,967 7,092 7,220 1.80%

Lancaster County 2% 11,299 11,502 11,709 11,920 12,135 1.80%

Lebanon County 2% 2,593 2,645 2,698 2,752 2,807 2.00%

York County 2% 8,238 8,403 8,571 8,742 8,917 2.00%

Total 1.88% 28,853 29,394 29,945 30,506 31,079 1.88%

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Strategy and Implementation Summary


Ibrio Inc. will initially focus all marketing and sales efforts toward the Central Pennsylvania area, this
includes Harrisburg, Lebanon, Lancaster, and York counties.

We will market ourselves as an Internet and Web services organization devoted to offering high-end
services to small businesses exclusively. Our target customer will be the owners of any small or home-
based company who are looking to implement their business into the Web.

5.1 Competitive Edge


We have a valuable competitive edge over our local competitors based on the fact that we have
streamlined all our services into the small business market. Through setting up several strategic
partnerships with various Internet and Web-related companies, we are able to offer our clients an
affordable and efficient proprietary Web package that will meet all their related needs.

Ibrio Inc. also has as its lead development manager, Brandon Andrews, a main principal in the
company. Brandon Andrews has four years of commercial Web development experience and has been
recognized as a leader and innovator in the graphic design and layout areas of website development.

5.2 Marketing Strategy


Successful marketing of Web services to small business owners depends on how you approach and
follow-up every potential client. It is very important to deliver our marketing pitch in a clear, no non-
sense method. Details of the Internet and Web are still relatively unknown by many small business
owners, giving it the tendency to confuse and intimidate easily.

5.2.1 Marketing Programs


The following is a summary of our marketing programs from the Milestones table:

We will begin our marketing by acquiring memberships from the following organizations (October 2-9):

• Lebanon Chamber of Commerce.


• Harrisburg Chamber of Commerce.
• Hershey Partnership.
We plan on doing a large scale marketing project during this month including (March 5 - April 5, 2001):

• Radio advertising (WHP 580).


• Ad placement in local trade publications (The Central Penn Business Journal).
• Billboard Ads to promote wide-spread name recognition.
5.2.2 Pricing Strategy
For most small business owners, cost, both residual and one-time are huge influences on the decisions
they make regarding everyday operations of their company. Even though we offer 100% customized
services and our pricing is based on an hourly fee, to make it easier and less confusing for the clients,
Ibrio has established a packaged pricing system.

• Budget Domain Website Package ($585.00): For simple, information based websites.
Popular with companies who just need to gain an Internet presence.

• Mid-Level Website Package ($945.00): Information based websites with a large amount of
content. Popular with companies that have a large services/products list and/or want to implement
more of their business into the Web.

• Catalog Website Package ($1,440.00): Usually reserved for product-oriented websites that
are e-commerce enabled. Popular with companies that have a desire to market heavily on the
Internet or sell their products/services directly from the Web.

• Website Hosting (from $15.00 to $45.00 per month): Depending on the type and size of the
website, the price for hosting can vary greatly. The average cost of hosting for most clients is $25
per month.

• Website Maintenance ($45.00 per hour): We charge a set fee of $45.00 per hour billed in 10
minute increments. If a client feels as though they will need their website updated or maintained
on a regular basis, packages are available at a discount rate.
5.2.3 Promotion Strategy
Our target client is part of a very specific demographic, for this reason, we market and promote our
services in a direct and specifically targeted manner.

Print Ads:
• Currently we advertise in eight separate area yellow page directories. All our ads appear under
either the Internet Services or Website Design headings.
• Ibrio Inc. also has an ad listing in a national business directory under the heading of Web
Developers.
• In the near future we will feature ads in several area business publications such as The Central
Penn Business Journal and the Who's Who in Dauphin County.
Direct Mail and Fax:
• We have sent out targeted bulk mail flyers promoting special offerings by our company.
• We have participated in targeted broadcast fax promotions to small businesses in our area.
• In the near future we will begin a new aggressive, ongoing bulk mail campaign to promote our
Web development and hosting services.
Mass Media Ads:
• We will begin advertising on a broader scale within the next six months. Radio spots will be
continuously played during local area talk shows and news programs, this placement is intended
to reach the highest percentage of our target client possible.
• Billboard ad placement will be the second mass media marketing campaign we will implement
into our marketing efforts. Billboard ads will be intended as 'name recognition' advertising.
Educational Seminars:
• Ibrio Inc. has been invited to speak to business owners and managers at several Internet and
Web-related educational seminars on a variety of topic. In the near future, we will promote our
services through these seminars.
Local Area Commerce Groups:
• To promote our services and our name as a participant in the Web services industry, we will be
joining many of the local area Chamber of Commerce groups and various other strategic
partnership clubs.
5.3 Sales Strategy
Our clients are small business owners, most are very protective of their company, and almost all of them
are salesmen themselves. We sell value, service, and quality when we talk to business owners. We
need to convince them that they can look past all of the hype surrounding the Internet and still see why
having a website is worth the money spent.

We currently utilize a database system specifically targeted toward our desired demographic to
establish our first contact with every potential client. It has proven a successful method for soliciting new
business directly due to the method in which we approach the first call. The salesman always requests
to speak to the business owner, asking for him by his first name only, and when asked who is calling,
responds by providing simply his first name as well. Once on the phone with the business owner, there
is absolutely no script and the salesman clearly identifies himself and asks the business owner if he has
ever considered having a website developed for his company, no matter what the response, a brief
conversation will always pursue, sometimes leading to an appointment, and sometimes to a follow-up
call.

Because we have full confidence in our services, and recognize that business owners are generally
open to the idea of utilizing the Internet and most even consider it a necessity, we take a very low-
pressure, non-abrasive approach to direct selling. We will normally present the information about our
company, portfolio, strengths, and pricing to the client and let them make the decision on their own. This
method has proven successful provided that we keep our follow-up calls consistent and regular until we
receive either a yes or no answer.

5.3.1 Sales Forecast


The following table and chart summarize our forecast sales. We expect the first month of operations
(October) to be spent training the new developer and new salesman. November will be our first month of
operation and we expect to grow steadily in the following months.

Website development sales will be the largest portion of our revenue with result-based marketing
following. Maintenance and hosting revenue will be built up slowly but are the residual base we will
stand on in the future.
Sales Forecast
Year 1 Year 2 Year 3

Sales

Website Development $117,000 $350,000 $750,000

Result-based Marketing $19,250 $81,900 $199,500

Maintenance $14,230 $43,000 $130,000

Hosting $14,040 $40,000 $115,000

Total Sales $164,520 $514,900 $1,194,500

Direct Cost of Sales Year 1 Year 2 Year 3

Website Development $0 $0 $0

Result-based Marketing $9,900 $35,000 $102,600

Maintenance $0 $0 $0

Hosting $5,650 $15,000 $25,000

Subtotal Direct Cost of Sales $15,550 $50,000 $127,600

5.3.2 Sales Programs


The following is a summary of the our sales programs from the Milestones table:
October 9-16: Hiring first salesman. We will be training this employee this month to make telephone
calls to business owners in the area and set appointments to meet with them and show them what we
have to offer. Starting in mid-November he/she will begin meeting with clients alone.
October 23 - November 2: We will be updating our sales literature including creating brochures, and
printing leaflets to be placed in our presentation folders.
February 12-26: Hiring second salesman. We will be training this salesman in the same fashion
previously stated.
5.4 Strategic Alliances
Currently, we do not participate in any co-marketing or co-development efforts with outside companies.
However, we have specific plans to establish several strategic partnership programs with area ISPs
(Internet Service Providers) and computer consulting companies. These partnerships are intended to
attract more sub-contracting work from potential competitors, in exchange for a commission to be paid
for each lead and resulting new client.

5.5 Milestones
The accompanying table lists important program milestones, with dates and managers in charge, and
budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

What the table doesn't show is the commitment behind it. Our business plan includes complete
provisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings every month to
discuss the variance and course corrections.

Milestones

Milestone Start Date End Date Budget Manager Department

Incorporation 8/14/2000 8/28/2000 $500 Dave Admin

Acquire Start-up
8/14/2000 10/1/2000 $0 Dave Admin
Financing

Accounting/Balance
8/31/2000 8/31/2000 $300 Dave Admin
Sheet Setup

Acquire Chamber
10/2/2000 10/9/2000 $600 Dave Marketing
Memberships

Staff Sales Position #1 10/9/2000 10/16/2000 $2,240 Dave HR

Staff Development
10/16/2000 10/23/2000 $3,200 Brandon HR
Position #1

Upgrade Current Sales


10/23/2000 11/6/2000 $300 Dave Sales
Literature

Acquire Dedicated Web


11/1/2000 11/8/2000 $770 Brandon Development
Host Service

Staff Development
1/15/2001 2/1/2001 $3,200 Brandon HR
Position #2

Staff Sales Position #2 2/12/2001 2/26/2001 $2,240 Dave HR

Acquire Large Scale


3/5/2001 4/5/2001 $2,000 Dave Marketing
Outside Marketing

Staff Developer Postion


3/19/2001 4/2/2001 $3,200 Brandon HR
#3

Other 1/1/2001 1/1/2001 $0 ABC Department

Totals $18,550

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Management Summary
Ibrio Inc. is owned and operated by two partners with equal equity in the company, and both directors in
the corporation.

David Hickethier attended Williamson College on a three year scholarship basis, earning his Associates
Degree in construction management. He has completed many business management and business
finance courses and has also had hands on experience with managing people. He has one year
experience in Internet and Web-related sales and nearly two total years of professional sales
experience.

R. Brandon Andrews is an experienced website developer and strategist with over four years of
commercial Web and Internet services experience, plus numerous attendance to various related
seminars and educational classes. Previous to the forming of Ibrio Inc., he owned and operated a sole-
proprietorship, which offered similar Web-related services, but did not market exclusively to small
business.

6.1 Organizational Structure


Ibrio Inc. will depend on the two main principals, David Hickethier and Brandon Andrews, for all
management responsibilities. This will include office management, accounts receivable and payable,
marketing, and talent recruitment.

David Hickethier will serve as chief operations officer and sales manager. He will supervise all salesmen
and all sales promotions and projects. David will also be holding the office of the treasurer therefore will
be responsible for all financial related matters.

Brandon Andrews will serve as chief technology officer and lead Web developer. He will be directly
supervising all Web development (employee and sub-contracting projects), and will also be responsible
for any necessary training in the same department.

6.2 Management Team Gaps


The current management team will require support in both the business development and administrative
departments. Both managers have had prior experience in these fields, but feel as though their
experience is limited given the fact that prior working environments rarely required this type of support.

We will turn to Parks & Company, our finance and accounting firm, to provide expert advise and
counseling in both the business development and administrative support departments. This strategy will
allow the partners of Ibrio Inc. to lend the majority of their time to their respective areas of the company.

We will turn to the law offices of Keefer Wood Allen & Rahal, LLP for all advice concerning the legal
issues of running Ibrio, Inc.

6.3 Personnel Plan


We visualize implementing a "team" development system that will consist of two full-time sales people
and three full-time Web developers. Of the Web developers, one position will be filled by a highly-
qualified senior Web professional and two lesser-qualified, lower paid developers. All three will work full-
time on separate projects provided to them by the sales people. However, the senior developer will have
the duty of maintaining the same high quality level of work in the junior developers' projects, that our
clients have learned to expect from us now. By May, 2001 we plan to have one of these teams fully
functional.

The following table shows how we plan on making the above a reality.

Personnel Plan
Year 1 Year 2 Year 3

Production Personnel

Brandon/Web Developer $3,400 $25,000 $60,000


Keith/Hired in Oct $16,228 $23,000 $27,000

Developer #2/Hired in Feb $10,944 $21,000 $25,000

Developer #3/Hired in Apr $7,920 $21,000 $25,000

Other $0 $0 $0

Subtotal $38,492 $90,000 $137,000

Sales and Marketing Personnel

Dave/Marketing $3,400 $25,000 $60,000

Sales Position #1/Hired in Oct $16,504 $23,000 $25,000

Sales Position #2/Hired in Feb $10,096 $21,000 $23,000

Other $0 $0 $0

Subtotal $30,000 $69,000 $108,000

General and Administrative Personnel

N/A $0 $0 $0

N/A $0 $0 $0

Subtotal $0 $0 $0

Other Personnel

N/A $0 $0 $0

N/A $0 $0 $0

Subtotal $0 $0 $0

Total People 7 7 7

Total Payroll

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Financial Plan
Ibrio's financials summarize the following areas:

• Important Assumptions.
• Key Financial Indicators.
• Break-even Analysis.
• Projected Profit and Loss.
• Projected Cash Flow.
• Projected Balance Sheet.
• Business Ratios.
7.1 Important Assumptions
Our financial assumptions are based on a steady economy and standard numbers for a business in our
industry.
General Assumptions
Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 13.00% 13.00% 13.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

7.2 Key Financial Indicators


The following chart indicates our key financial indicators over the next three years.

7.3 Break-even Analysis


The following table and chart summarize our break-even analysis. With two developers and two
salesmen we plan on developing eight sites in November and once the two new hires are fully trained
doubling the number to 16 sites a month. (We don't plan on that happening until March 2001).

The average variable cost is an aggregate measure for all the types of services which will be offered.

Break-even Analysis
Monthly Revenue Break-even $4,649

Assumptions:

Average Percent Variable Cost 9%

Estimated Monthly Fixed Cost $4,210

7.4 Projected Profit and Loss


Our projected profit and loss is shown on the following table. Some highlights are the Gross Margin at
67% for our first year and steadily increasing. Our Net Profit/Sales starting at 26% and increasing by
approximately 10% the following two years to reach 45% by our third year.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3

Sales $164,520 $514,900 $1,194,500

Direct Cost of Sales $15,550 $50,000 $127,600

Production Payroll $38,492 $90,000 $137,000

Other $0 $0 $0

Total Cost of Sales $54,042 $140,000 $264,600

Gross Margin $110,478 $374,900 $929,900

Gross Margin % 67.15% 72.81% 77.85%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $30,000 $69,000 $108,000

Advertising/Promotion $2,790 $3,500 $10,000


Travel $1,020 $3,000 $7,000

Miscellaneous $0 $1,000 $2,500

Total Sales and Marketing Expenses $33,810 $76,500 $127,500

Sales and Marketing % 20.55% 14.86% 10.67%

General and Administrative Expenses

General and Administrative Payroll $0 $0 $0

Sales and Marketing and Other Expenses $0 $0 $0

Depreciation $3,180 $5,000 $12,000

Rent $4,500 $12,000 $24,000

Depreciation $0 $2,000 $4,000

Leased Equipment $0 $0 $0

Utilities $805 $2,000 $5,000

Insurance $0 $2,500 $5,000

Payroll Taxes $8,219 $19,080 $29,400

Other General and Administrative


$0 $0 $0
Expenses

Total General and Administrative


$16,704 $42,580 $79,400
Expenses

General and Administrative % 10.15% 8.27% 6.65%

Other Expenses:

Other Payroll $0 $0 $0

Consultants $0 $0 $0

Contract/Consultants $0 $0 $0

Total Other Expenses $0 $0 $0

Other % 0.00% 0.00% 0.00%

Total Operating Expenses $50,514 $119,080 $206,900

Profit Before Interest and Taxes $59,964 $255,820 $723,000

EBITDA $63,144 $260,820 $735,000

Interest Expense $2,600 $2,302 $1,664

Taxes Incurred $14,330 $63,380 $183,340

Net Profit $43,034 $190,139 $537,996

Net Profit/Sales 26.16% 36.93% 45.04%

7.5 Projected Cash Flow


Cash flow projections for the first half of the year are slightly declining and in May they begin to raise
sufficiently. We may need to borrow against our accounts receivables but are projecting that the initial
capital raised should cover us until our cash becomes fluid.
Pro Forma Cash Flow
Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $54,292 $169,917 $394,185

Cash from Receivables $70,969 $261,372 $638,141

Subtotal Cash from Operations $125,260 $431,289 $1,032,326

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $10,700 $0 $0

Subtotal Cash Received $135,960 $431,289 $1,032,326

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $68,492 $159,000 $245,000

Bill Payments $40,764 $156,598 $379,881

Subtotal Spent on Operations $109,256 $315,598 $624,881

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0


Principal Repayment of Current Borrowing $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $0 $4,589 $5,222

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $20,000 $20,000

Dividends $0 $0 $0

Subtotal Cash Spent $109,256 $340,187 $650,103

Net Cash Flow $26,704 $91,102 $382,224

Cash Balance $43,704 $134,806 $517,029

7.6 Projected Balance Sheet


The balance sheet in the following table shows managed but sufficient growth of net worth, and a
sufficiently healthy financial position. The monthly estimates are included in the appendix.

Pro Forma Balance Sheet


Year 1 Year 2 Year 3

Assets

Current Assets

Cash $43,704 $134,806 $517,029

Accounts Receivable $39,260 $122,871 $285,045

Other Current Assets $7,650 $7,650 $7,650

Total Current Assets $90,614 $265,327 $809,724

Long-term Assets

Long-term Assets $0 $20,000 $40,000

Accumulated Depreciation $3,180 $8,180 $20,180

Total Long-term Assets ($3,180) $11,820 $19,820

Total Assets $87,434 $277,147 $829,544

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $9,050 $13,213 $32,836

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $9,050 $13,213 $32,836

Long-term Liabilities $20,000 $15,411 $10,189

Total Liabilities $29,050 $28,624 $43,025


Paid-in Capital $18,000 $18,000 $18,000

Retained Earnings ($2,650) $40,384 $230,523

Earnings $43,034 $190,139 $537,996

Total Capital $58,384 $248,523 $786,519

Total Liabilities and Capital $87,434 $277,147 $829,544

Net Worth $58,384 $248,523 $786,519

7.7 Business Ratios


The following table shows the projected businesses ratios. We expect to maintain healthy ratios for
profitability, risk, and return. The Industry Profile ratios, shown for comparison, are based on Standard
Industrial Classification (SIC) code 7375, Information Retrieval Services.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 212.97% 131.99% 9.70%

Percent of Total Assets

Accounts Receivable 44.90% 44.33% 34.36% 25.00%

Other Current Assets 8.75% 2.76% 0.92% 46.30%

Total Current Assets 103.64% 95.74% 97.61% 76.60%

Long-term Assets -3.64% 4.26% 2.39% 23.40%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 10.35% 4.77% 3.96% 49.40%

Long-term Liabilities 22.87% 5.56% 1.23% 21.20%

Total Liabilities 33.23% 10.33% 5.19% 70.60%

Net Worth 66.77% 89.67% 94.81% 29.40%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 67.15% 72.81% 77.85% 0.00%

Selling, General & Administrative


41.00% 35.88% 32.56% 78.10%
Expenses

Advertising Expenses 1.70% 0.68% 0.84% 0.90%

Profit Before Interest and Taxes 36.45% 49.68% 60.53% 1.90%

Main Ratios

Current 10.01 20.08 24.66 1.57

Quick 10.01 20.08 24.66 1.19

Total Debt to Total Assets 33.23% 10.33% 5.19% 70.60%

Pre-tax Return on Net Worth 98.25% 102.01% 91.71% 4.10%


Pre-tax Return on Assets 65.61% 91.47% 86.96% 13.80%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 26.16% 36.93% 45.04% n.a

Return on Equity 73.71% 76.51% 68.40% n.a

Activity Ratios

Accounts Receivable Turnover 2.81 2.81 2.81 n.a

Collection Days 54 86 93 n.a

Accounts Payable Turnover 5.50 12.17 12.17 n.a

Payment Days 27 25 21 n.a

Total Asset Turnover 1.88 1.86 1.44 n.a

Debt Ratios

Debt to Net Worth 0.50 0.12 0.05 n.a

Current Liab. to Liab. 0.31 0.46 0.76 n.a

Liquidity Ratios

Net Working Capital $81,564 $252,114 $776,888 n.a

Interest Coverage 23.06 111.14 434.50 n.a

Additional Ratios

Assets to Sales 0.53 0.54 0.69 n.a

Current Debt/Total Assets 10% 5% 4% n.a

Acid Test 5.67 10.78 15.98 n.a

Sales/Net Worth 2.82 2.07 1.52 n.a

Dividend Payout 0.00 0.00 0.00 n.a

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