| Software Publisher Business Plan |
| | >>Note: Sample Software Company is an S Corporation founded and entirely owned by Ralph and Mabel Smith. The company was founded in 1993 and has received no outside investments. Sample sells three different software products that command impressive market share. Ralph and Mabel are interested in taking the company to the next level achieving $3.8 million in sales by 2000. |
| | Sample's objectives are ambitious yet achievable. Sales increases of $1.9 million in 1999, and doubling that for the next year. They also forecast gross margin increases to 70% and net profit increases to 9.75%. Their goal is to hold personnel to one employee for every $250,000 in revenue. With their flagship product, Product X, they will maintain a 30% market share as measured by PC Data. These goals will be maintained by adhering to three keys to success, market power, customer satisfaction, and the right management team. |
| | >>Note: Sample Software was founded in 1993 by Ralph Smith to market his Product X software. It was originally installed in a home office, but moved into its present space in 1996. It has added several new products, and has acquired shelf space in the retail market. |
| | >>Note: Our products are prescriptive software, more than just tools, because they instruct and empower the user with know-how as well as tools. Our best-selling flagship, Product X, is the key. We are also shipping Product Y™ for Windows. |
| | Strategy and Implementation |
| | >>Note: Ideally, we would want to bring in as much as $1 million of equity investment from investors compatible with our growth plan, management style, and vision, in return for some equity ownership. We are not going to talk about specifics of a deal until we have met the right partners. This plan does not call for equity from outside investors. |
| | >>Note: Sample is participating in a $3.8 billion market that will have a 20% growth rate for the next three years. Sample will be targeting four customer segments: home offices, small offices, professionals, and academics. These markets are growing at 2%, 5%, 8%, and 0% respectively. These markets have 22,000, 15,000, 10,000, and 12,000 potential customers respectively. These figures are the USA market. The major trend in the market is toward international sales. The market has seen a significant surge in international PC products primarily fueled by the recent Internet boom. While the US market has seen 22% growth for the last three years, it is estimated that the international market will grow at 40%. |
| | >>Note: Sample Software currently has three products. Product X is the second-leading Windows task X software and the quality leader. It combines an easy-to-use, step-by-step interface full of guidance, help, and glossaries, with a powerful business analysis model, complete financial analysis, and very strong cash flow analysis. Product Y is a stand-alone task Y application for Windows. It is the best product available for creating a task Y, and the only product for day-to-day management of the [omitted] function. Their last product is Product Z, a creative business process application. |
| | >>Note: Sample will follow four concise strategies to achieve the desired growth. They will build customized versions of their standard products, providing more value for specific groups of customers. They will develop a strong marketing infrastructure. This will be key for them to get their products out on the market. Sample will remain focused on small to medium size companies, the segment that has been largely ignored by the competition. Lastly, Sample will focus on follow-up technology which is more appropriate for the masses, instead of leading technology which is best suited for experts. |
| | >>Note: Ralph and Mabel are seasoned managers who are capable of executing on their ambitious strategies. Ralph has 10 years of sales and marketing experience from Arrog International. In 1993 he founded Sample as a software distribution organization and is primarily responsible for its growth. Mabel will also be needed to grow the company. Her years as a consultant will be drawn upon. |
| | Sample Software is a dynamic company that was built on humble beginnings in 1993 and has grown to a $1 million company now with $3.8 million revenue forecasts for 2000. This is all the more impressive when you consider that this was all done with investments from the owners, no outside capital was secured. |
| | To hold personnel to 1 full-time person for every $250K in revenues |
| | To maintain at least 30% market share of Product X |
| | >>Note: Sample Software develops, publishes, and markets business tools and business know-how together in a software product including software and documentation. It makes business techniques accessible to millions of business users who would otherwise not have the knowledge to use them. It makes a profit and generates cash. It provides a rewarding work environment and fair compensation to its employees, a fair return to its owners, and a fair royalty to its authors. |
| | >>Note: We need to have our products on the shelves with attractive packaging and enough marketing power to maintain a 30% or more market share, as measured by PC Data. |
| | Product quality and customer satisfaction |
| | >>Note: Everything we sell is guaranteed, so the product has to do what we promise and well. |
| | Long-term customer satisfaction |
| | The right management team |
| | Company Locations and Facilities |
| | >>Note: The company is located in Ourtown, with offices at 100 Main Street. We were started in a home office but we moved to the present space in 1996. We rent 750 square feet for $900 per month. We have a two-year contract limiting rent increases. |
| | >>Note: Sample Software, Inc. is now a subchapter S Corporation owned entirely by founder Ralph Smith and his wife Mabel. It elected to go subchapter S at the beginning of the 1996 tax year, after having previously been subchapter C from founding until then. Its fiscal year is the calendar year. The Oregon corporation was established with 100 shares issued, 51 to Ralph Smith and 49 to Mabel Smith. |
| | >>Note: Sample Software, Inc. was founded in Ourtown in 1993 as Infoplan, a sole proprietorship. In 1994 it was incorporated in Delaware as Infoplan, Inc. In 1996 it was incorporated in California as Sample Software, Inc. Infoplan, Inc. was dissolved. |
| | For most of its existence, this was a one-man consulting company supporting a product company. It kept a very conservative stance on products, advertising with very slim budgets, with marketing depending mainly on published reviews and direct sales, until the market grew. |
| | In 1995 we introduced a new, break-through Product X™, that was the first effective task X software with bundled spreadsheet and word processor along with automatic charts. |
| | Target Market Segment Strategy |
| | Mainline packaged software |
| | Specialty or vertical market software |
| | >>Note: Users of industrial blippos, commonly known as home blippos. A market mainly for playing games, sold often through toy, hobby, or consumer channels, and, not infrequently, by discounters or mass merchandisers. |
| | >>Note: Some 10 million businesses in the United States, plus several million professionals and home offices. Companies may be segmented by revenues, employee size, or some other category. The division between small business and large business is more a matter of buying patterns and product needs than a specific division between categories. |
| | >>Note: The key distinctions between large and small business include: |
| | Product needs: large business needs are much more complex. |
| | Buying patterns: large business demands different channels. |
| | >>Note: Elementary and middle schools. However you divide education, the K-12 market tends to be dominated by Litmus Development. |
| | Competition and Buying Patterns |
| | Strategy and Implementation |
| | Strategy and Implementation Summary |
| | >>Note: Our strategy is based on serving niche markets well. The world is full of small and medium-sized businesses that can't get good products or services from the major vendors who focus on high-volume orders only. |
| | >>Note: Our main strategy at Sample is to position ourselves at the top of the quality scale, featuring our combination of superb technology and fine old-fashioned programming, for the buyer who wants the best quality regardless of price. Tactics underneath that strategy include research and development related to new designs and new technology, choosing the right channels of distribution, and communicating our quality position to the market. Programs are mainly those listed in the milestones table, including new design programs, new equipment to keep up with design, channel development, channel marketing programs, our direct sales, and our continued presence in high-end catalog channels and new presence in the Mall. |
| | >>Note: We are a small company owned and operated by Ralph and Mabel Smith, husband and wife, as a Subchapter S corporation. Ralph is the developer and designer of the products, and Mabel manages the office. |
| | Management style reflects the participation of the owners. The company respects its community of co-workers and treats all workers well. We attempt to develop and nurture the company as community. We are not very hierarchical. |
| | Projected Profit and Loss |
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