Moogtech LTD.: Business Plan For
Moogtech LTD.: Business Plan For
Moogtech LTD.: Business Plan For
MoogTech Ltd.
The content in the following business plan is based on two people starting a software company
called MoogTech. They specialize in "electronic commerce and payment."
MoogTech is a fictitious company that only seeks to serve as an example of how a business plan
can be organised.
Contents
BACKGROUND INFORMATION OF OWNERS
RESUME
THE COMPANY'S IDEA/RAISON D'ÊTRE
PERSONAL GOALS AND RESOURCES3
PRODUCT/SERVICE
MARKET DESCRIPTION
SALES AND MARKETING
ORGANIZING THE COMPANY
ENTERPRISE DEVELOPMENT
FINANCING
BUDGETS
Background Information
Name: Mogens Thomsen
Address: Syberg Street 15
Postcode / City: 8200 Aarhus N
Telephone: 22 33 22 33
e-mail: mt@moogtech.com
URL: www.moogtech.com
Resume
MoogTech Ltd. develops, implements and services small business administrative software so it
can be used for electronic commerce and online payment.
Our customers are metal and electronics companies that are subcontractors to larger companies.
These companies will be first "hit" of the requirement to introduce electronic commerce and
payment.
The average total price for our product will then be: 57,000 with a margin of 51,000 per. customer -
it gives a 79% contribution ratio.
Turnover in the first year is calculated to 654,000 with a profit of 250,000 – of which we will draw
our “salary”
We believe it will be realistic to find and carry out tasks for 10 clients in the first year.
Once the businesses realize that they have to be able to handle electronic payments, they will
contact us - if they know we exist.
The company is a Ltd. and is owned by Mogens Thomsen and Vitthal Chaydhry.
Mogens Thomsen trained engineers specializing in networking and has worked for two years in a
computer firm, dealing with the internet.
Vitthal Chaydhry is MBA from the business school and has worked for two years in an accounting
department.
Clients:
Clients are companies with over 20 employees who are subcontractors to larger companies.
Economy:
We have each saved 25,000 and our demand for daily earnings are low, since none of us have our
own home yet. Our parents have promised to guarantee for the additional 25,000 each.
Product / service
The company has the following products/product groups/services:
Product 1: Formulation of strategy paper/presentation for the client that provides a basis for
assessing the advantages & disadvantages of electronic commerce and online payment.
Product 1: Other computer companies may also work in this area, but we have it as our
core business. We provide special expertise.
Product 2: The starting point is our customers' existing solutions and we have specialized in
developing customer oriented solutions so we can use their existing administrative
software.
Product 3: We are not driven by well-known manufacturers of hardware and software, but
entirely of our own strategy and the demands our customers ask of us.
Calculation of product/service:
Product 1:
Cost: 10 hours + driving;
Selling price: 8.500;
approx. gross profit: 8.500. (Contribution ratio: 100%):
Product 2:
Cost: 15 hours + driving + software for 6.000;
Selling price: 39.000
approx. gross profit: 33,000 (Contribution ratio 85%)
Product 3:
Cost: 10 hours + driving;
Annual subscription: 9.500; approx.
Gross profit: 9.500. (Contribution ratio: 100%)
Price of product:
Reflections of the above cost calculation: The price can be relatively high because it signals
quality, customers are forced to buy our services because of their customers wish to pay
electronically and high price is customary for using high level IT consultants.
The average total price for our product will then be: 57,000. We are considering writing off 50% of
strategy papers price if the customer orders product 2 +3. We have not incorporated this idea into
our budget.
Industry development:
There are unlimited possibilities for growth within the industry, because virtually all businesses
within the next 2-5 years shall be able to handle electronic payments.
Market Description
Customers like the company's product because:
They are forced by their customers to buy the product, but they could also save time on the
economy and stock management.
According to the results of a search in a business database there are 899 manufacturing
companies in North-Western parts of the country that has between 10 and 100 employees.
Of the 889 manufacturing companies in north-western part of the country with between 10 and 100
employees, we will select 50 companies who will receive a mail.
Subsequently, we conduct a telephone call, which hopefully will be followed by a customer visits.
We have developed easily understandable material that tells about the advantages of electronic
commerce and payment. We have contacted a start-up ad-agency that can perform this work.
We intend to dress in "casual work uniforms" to ensure that we always look good when we're out
working with customers.
None of us like sales work, but we must both work with it at first.
Bank details:
National Bank, North-Western branch
Auditor:
Registered auditor Peter Rose, Grosse Street, South Ville
We need approx. 50 m2 for a start-up and to expansion 2-400 m2 in about three years.
M2 price per. years is approx. 440 in northern city = 22,000
Operational Policy:
Pricing policy: Same price for everyone.
Discount Policy: Minus 50% of service if the product purchased 2 +2.
Payment Terms: Cash + 14 days.
Warranty service: After the system has run flawlessly for 14 days provided no guarantee.
Services: In the top if purchased subscription.
Customer service: The customer is entitled, if it does not cost us over 2 hours.
Personnel Policy: Our most important resource is skilled and motivated employees.
We need to find something so they want to be with us and it should preferably be more than
just salary.
After a year's time we may employ administrative staff to serve clients, consultants and business
generally, inc. daily bookkeeping and administration.
Financing
The necessity of establishment of capital:
(From establishing budget)
85.200
Needed liquidity:
(Liquidity Requirements calculated using a cash budget)
55,000
Total funding:
(Establishment + cash)
Owner: 50.000
Family: 0
Budgets
Premises:
2 month rent x 2500 5.000
Payment for the purchase of premises or business 0
Deposit for renting (3 months’ rent) 7.500
Goodwill 0
Fitting and repair 5.000
Production equipment:
Machines - (2 CPUs x 12.000) 24.000
Tools 0
Other: 0
Store Inventory:
Cash Register 0
Disk 0
Other: 0
Office furniture:
Furniture (desk, office chair, bookcase, etc.). 12.000
EDB (Printer, network, etc.). 5.000
Phone 1.200
Fax 0
Copier 4.000
Other: Mobile Phone, etc. 6.000
Purchase:
Raw materials / intermediates 0
Finished (stock) 0
Stationery 0
Other: 0
Car:
Payment for car 0
Other acquisition costs 0
Marketing:
Letterhead, business cards etc.. 4.500
Brochures 3.000
Ads 0
Signs 0
Reception for opening 3.000
Other: 0
Other expenses: 0
Design protection / IPR 0
Other:
Variable costs
Materials (12 software purchases x 6000) 72.000
Wages and salaries
Free-lance consultant
Transportation
Other
Total variable costs: 72.000
Fixed costs
Salary owners (We split the ”Net profit”) 0
Freelance technical assistance (50hours x350) 17.500
Freelance bookkeeper (2h.x 45weekw x 200) 18.000
Connecting to remote server, etc.. (12mdr x 1500) 18.000
Local Hire (12 x 2.500) 30.000
Electricity, water and heat 10.000
Rep. and legendary. of premises 2.000
Cleaning
Operation of car / driving allowance (40,000 km a 1.60) 64.000
Travel 10.000
Stationery 4.500
Interest
Interest on bank loans 4.700
Interest on overdraft 11.992
Other interest 2.000
Total interest: 18.692
Depreciation:
Operating 19.049
Other
Total Depreciation: 19.049
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