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The Business Plan

  1. Executive Summary

    Cygnus X-1 Consulting is to be a sole proprietary business owned and operated by Michael P. Kuebler. This plan is designed to be a guide in its formation and marketing plan for profitability.

    1. Objectives

      The objectives of this business plan are to provide documentation of the process and management of the business, and to formalize the marketing process. The intended audience is the owner and any interested party. The scope of the plan will cover start up and projected first year of operations. After the first year the business will be reanalyzed to determine the feasibility of continued operation.

      The objectives of Cygnus X-1 Consulting are to establish a source of income as well as maintaining the skills and experience of the proprietor. It will also serve as a research method into further expansion in the proposed market niche. It is important to note that the profit margin is not expected to be very great and in fact may not become financially viable. The major objective is to have something to do.

    2. Mission

      To provide desktop support, networking design and support, web site design and support, and computer knowledge consulting for the average home user and small home office businesses. To provide said services on a house call basis for a reasonable fee and on a timely schedule. Freelance computer work will be available to personal users and businesses of all sizes.

    3. Keys to Success

      Success for Cygnus X-1 Consulting will be achieved by initial marketing and subsequent "word-of-mouth" networking. This will be based on quality workmanship and customer relations respectful of the customers' expected knowledge of computers and computing in general. It is expected the customer base will have very limited knowledge and transferring some of my knowledge and experience will be essential to gaining the trust of customers.

  2. Company Summary

    Cygnus X-1 Consulting will be a sole proprietary venture, with the primary goal of making use of the owner's skills and experience. All equipment used is already provided by the owner, with minimal additions of marketing materials and operational materials in the form of standard bills and receipts being the only initial capital outlay.

    1. Company Ownership

      Cygnus X-1 Consulting will operate as a sole proprietorship, owned and operated by Michael P. Kuebler. Legal options dealing with incorporation will be explored at a later time.

    2. Startup Summary

      The major goal is to start with as little capital as possible, relying entirely on word of mouth and highly localized and targeted advertising. The idea is to start as simply as possible by providing a unique service to a small market area. From these beginnings it is expected that reputation will be built for quality services and the capital obtained from this activity will finance future expansion.

    3. Company Locations and Facilities

      Cygnus X-1 Consulting is located in the apartment of the owner, utilities and equipment are provided by the owner. Data and telephone access are currently shared, mobile communications are also available. Data access will likely be replaced shortly and phone service will be configured for optimal customer contact.

  3. Services

    Cygnus X-1 Consulting (CX1) will offer home users, home office, and small office an inexpensive resource of computer hardware assistance, software assistance, consultation, site installations, and general computer assistance.

    The primary service is to be in the home assistance with setting up and configuring new and current systems. The service will include brief education of how and where to find answers to typical questions, as well as suggestions on how to keep track of configurations for future reference.

    Consulting on home networks and the installation and configuration of those networks will be provided. Equipment for installation of CAT5 cabling is available as well as the experience of designing a physical network.

    For those interested in a personal web page CX1 can provide training or direct programming.

    Other services will include answering questions about specific software and generic computer related questions. These questions will likely be freely answered with the expectation of physical services to follow. Extended sessions of training will be available at hourly rates.

    1. Service Descriptions

      Hourly Ad Hoc - This will be the "House Call Help Desk" part of the business, billed at an hourly rate with a 2 hour minimum. Customers make an appointment for a specific service or problem. Ideally there will be a minimal response time however it will be understood that service will be by appointment.

      Long Term Contract - For those users who request a regular service schedule or maintenance of a web site a long term contract is available. Charges will be determined based on projected hours required.

      Projects - For complete services for systems, networks, programming, large installations, industry consultations, and similar larger projects. Charges will be based on estimates and current industry standards.

    2. Competitive Comparison

      There appears to be a saturation of computer shops and consultants in the area yellow pages. However it is not clear exactly what services are available beyond in-shop services and typical ISP (Internet Service Provider) services. Many problems are fairly simple to resolve without taking the whole system into a shop. Sometimes only a simple memory upgrade or hard drive install is required. For many users it is not easy to take their PC to a service shop. Cygnus X-1 Consulting will fill the void of cheap at home service.

    3. Sales Literature

      Cygnus X-1 Consulting will consist primarily of a web site with all the pertinent information. As the business continues to evolve the site will include self authored articles and commentary designed to inform and entertain the customer base. Customers will be encouraged to visit and comment on them, thus helping to spread the word of CX1's services.

    4. Fulfillment

      All services will be fulfilled by the owner.

    5. Technology

      Technology is always advancing, and obviously will be a critical component of consultation. However it is also understood that technology has many legacies, and it is expected that many clients will have older systems that need to last as long as possible. Indeed much of CX1's technology is relatively old, however it is more than capable of running the business, and this will assist in demonstrating the extensibility of technology.

  4. Market Analysis Summary

    Cygnus X-1 Consulting will be focused on a fairly small market, one that is probably ignored by other similar businesses and for good reason. It is not a high growth market and not expected to be extremely profitable. It is however a place to start and a means to establish a reputation before moving on to greater challenges. It is expected that enough capital will be generated to make it worth while.

    1. Market Segmentation

      The available market segments range from home users to large businesses, all of which will be considered potential customers for Cygnus X-1 Consulting. While it may be prudent to find statistics on the potential business for each segment it is beyond the scope of the intended business strategy. Therefore the strategy will be limited to the home user and small home business markets with the intention of exploring the more profitable markets as skills and reputation increase.

    2. Target Market Segment Strategy

      The beginning marketing strategy will be to advertise in highly localized publications, with an expected high percentage of exposure. For this the local church bulletin has been explored as an ideal starting point. The readership is expected to be relatively affluent and receptive to the services offered, and the target geographic area is centrally located to the home of CX1. Further research indicates that the bulletin readers are encouraged to support advertisers and would perhaps feel more comfortable in using the services of "one of their own".

      As a secondary feature of the proposed strategy it is hoped that appropriate "word of mouth" advertising can be expected from successful assignments. This will also serve as the source of a potential "network" from which work of a more permanent and stable nature can be obtained. It is important to note that in such an event CX1 will continue to function as before until it becomes impossible to do so or a suitable replacement can be made. Prior customers will not be left in the lurch.

      1. Market Needs

        The needs of the market have been derived from simple experience from various people. It seems there is always someone who has some sort of problem or question related to their use of a computer. Many of them are relatively simple to fix, but not so easy to do so without direct contact with the system in question. While it is in the nature of the proprietor to help in these cases, it is not a very viable solution to do so at no cost for so many people. Making such a service available may be able to fill that void and perhaps start a new profitable business.

      2. Market Trends

        More and more ordinary people are buying computers every day, and despite the great advances in user interfaces they are still not really ready for the average user. (This assessment is based on the WinTel computer model as opposed to Apple/Mac).

        The latest edition of Windows ® now requires a username and password, as well as the concept of administrative access to system files. While these are not new concepts they are very new to the average user. Even corporate users may be affected as the username/password has usually be more for access to systems other than their desktop system (i.e. networked printers and shared file space). For this reason it would be helpful to provide some insight to this concept of authentication on a PC level.

      3. Market Growth

        It is assumed there will always be a segment of the market that will always prefer to have someone to do the "dirty work" of set up and configuration. Additionally there will be new users for quite some time before computers become as ubiquitous as refrigerators and microwave ovens.

    3. Service Business Analysis

      Although there appear to be many similar services available in the area, for the vast majority the scope of services is not stated at all. Some mentioned on site service but it is clear most of them are for businesses and the like. Of the few web sites available I found them all to be either too technical (i.e. geared for geeks) or not very descriptive. The goal of CX1 is to consult for those ordinary people who are interested in results and readable information.

      1. Business Participants

        The local Yellow Pages list dozens of various computer businesses with similar goals. The major difference from them is that CX1 is focused on the personal contact as opposed to a source of technology. In fact no physical technology is to be offered at all unless it is necessary for the service (such as a hard drive or memory upgrade).

      2. Competition

        The expectation is not to compete with the vast majority of the current competition, since it is clear they have the advantage of inventory and staff availability. Rather the goal is to fill in for those who would feel intimidated by a tech-shop mentality. For this reason direct competition should be limited.

      3. Main Competitors

        It is not apparent that there are many direct competitors in the projected market niche. However of those identified as such there was little available on-line information.

  5. Strategy and Implementation Summary

    Cygnus X-1 Consulting will use very limited localized advertising and word-of-mouth to establish and grow the business.

    1. Strategy Pyramids

      The first step will be to create and distribute business cards to family, friends, and acquaintances directing them to the web site. Based on the response of this low level advertising it will be determined if further advertising is prudent or necessary. Anything beyond that will be determined ad hoc.

    2. Value Proposition

      The basic value of CX1 is to provide convenient friendly PC/network/web/office system consulting in the client's home. It is intended to be an easy source for clients to ask questions and receive technical support on a personal and inexpensive level. It is also part of the plan to provide the client with additional information to the point of possibly removing them as a client. While this may remove a revenue stream it is hoped that this kind of service will provide more clients by satisfied referrals.

    3. Competitive Edge

      At this point the competitive edge is uncertain but it is assumed that there are very few if any other businesses providing user support in the the client's home. It is important to stress this is for home office or personal use, not small office. Small office and in fact any sized business is a potential client but that is not where the competitive edge currently is.

    4. Marketing Strategy


      1. Positioning Statement

        Cygnus X-1 Consulting is for the personal home user or home office business that requires technical assistance with computers and related equipment, including networking, Internet access, and Internet presence. The key is in the "house-call" style of client interaction.

      2. Pricing Strategy

        The pricing is currently flexible and will likely change as deemed necessary. Because of that I will have a policy that will allow previous clients to pay at the original rate should pricing go up. This policy will have a time limitation of one year from the date of the first service. This pricing policy will be clearly indicated on the web site and any pricing literature.

        The initial rate will $60.00 for the first hour and $50.00 per hour after that. For repeat customers the $50.00/hr. rate will apply to the first hour and all subsequent hours. Any part of an hour will be counted to the nearest quarter hour.

        For retainer work or project work the same hourly rate will apply. As the business evolves I may introduce standard packages on a fixed price.

        General questions will mostly not be chargeable, unless the request is for on site meetings with no other work being involved.

      3. Promotion Strategy

        Promotion strategy will follow those discussed in the Strategy Pyramids section (5.1).

      4. Marketing Programs

        At this time the marketing program will be very limited and dependent almost entirely by word of mouth and distribution of business cards and fliers to freely accessible bulletin boards. The web site will also provide it's own marketing presence.

    5. Sales Strategy

      The strategy is to have satisfied customers that will continue to request my services and suggest my services to others.

      1. Sales Forecast

        For the market I am targeting I have no means of predicting with any scientific method. However in general conversations it is apparent that the home service idea just may have enough of a pool as to provide somewhat of a steady source of customers. Since I tend to provide these services already to friends and relatives I am encouraged to believe there are others out there who could benefit from my knowledge and be willing to pay a small fee for it.

    6. Strategic Alliances

      At this time there are no alliances, but they will always be considered for future projects.

    7. Milestones

      • Formulate Business Plan
      • Design and Build Web Site for Business
      • Create Business Cards and Fliers
      • Prepare Balance Sheet (the "books")
      • Launch Business

  6. Management Summary

    Sole proprietorship.

  7. Financial Plan

    Admittedly I don't have much of a financial plan. The expectation is that the business will not make a large amount of cash flow, and may actually end up not making any profit. It is hoped to be otherwise and if so the business financial plan will be analyzed more thoroughly at a later time.

    1. Important Assumptions

      It is assumed that the coverage area will be within a 5-10 mile radius of the residence and therefor items like car usage and maintenance will be negligible or at least not much more than regular wear and tear. It is also assumed that this will not be the primary source of income for the proprietor and that eventually a more regular work schedule may reduce the availability of services.

    2. Key Financial Indicators

      The balance sheet shows more money coming in than going out.

    3. Break Even Analysis

      A rough estimate would be once $200.00 has been collected for services rendered. Nearly all assets with the exception of bills, receipts, and other minor expenditures have been owned and used by the proprietor previous to the business.

    4. Projected Profit and Loss

      This is unfortunately almost completely unknown and difficult to determine. The entire business is in a way an experiment and therefor profit & loss is largely to be determined by the business itself. It is expected to make more than it losses.

    5. Projected Cash Flow

      As with P & L this is also difficult to predict but it is hoped to produce $1000.00 per month.

    6. Projected Balance Sheet

      Not available at this time.

    7. Business Ratios

      Not available at this time.


Template based on review of sample BP for Calico Computer Consulting. http://www.bplan.com/c/sp/d/?s=946 Link originally found via http://www.sba.gov/starting_business/planning/writingplan.html

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