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Computer software business plan for starting your own company
Do you want to start a computer software business? Well, the business has immense demand these days. Firstly, because of the introduction of software that enhance business efficiency and productivity. And second, due to the coronavirus that has made people work from home.
Starting this business doesn’t require you to occupy a large space. However, the startup costs are still high. Mainly because of the costs of software and the salaries of software experts.
To make sure that your business is started and run efficiently, you must create a business plan computer software. To help you in making an accurate business continuity plan computer software company for your business, we’re providing here a business plan for software product. This sample business plan software for mac and pc is written for a computer software startup, Tech Solutions.
Computer Software Business Plan Summary
2.1 The Business
Tech Solutions will be a registered and insured computer software business. The business will provide all sorts of management, business, engineering, analytics, and computer repair software. The company will also offer software that allows integration with hardware devices. Moreover, some hardware accessories will also be sold by the company.
In this business plan sample of an online computer repair and sales of hardware and software, we’ll be providing all details of Tech Solutions for your guidance.
2.2 Management of Computer Software Company
To ensure the smooth and successful running of your business, it is essential to first create a business plan template for computer software. In your computer software reseller business plan, you should mention all details of how you will establish your business, hire the staff, purchase the inventory, and software for reselling. Moreover, it should explain a proper management structure that will allow you to cater to unexpected orders, staff problems, and financial issues.
2.3 Customers of Computer Software Company
Tech Solutions identified the following groups of people as its target customers:
- Companies & Businesses
- Engineering Schools
- Others (Retail Stores & General Public)
2.4 Business Target
We aim to earn and maintain a CSAT score above 90% within a year of our launch. Financially, we aim at earning a profit margin of $32.3k per month by the end of the three years of our launch.
Company Summary
3.1 Company Owner
Tech Solutions will be owned by Dustin Grant. Dustin is a software engineer who has also acquired a master’s degree in business administration after his graduation. He has worked in a software firm for two years but eventually decided to start his own business plan for software product.
3.2 Why the computer software business is being started
Dustin started the computer software business to be an entrepreneur and earn huge profits. Throughout his academic and service years, he remained associated with software businesses. Therefore, at the time of starting his own business plan for software product, he believed the computer software business to be the best choice for him.
3.3 How the pc software business will be started
Step1: Develop computer hardware and software business plan
The first step to start this business would be to create a computer software and technology business plan. Dustin had adequate knowledge to develop the business continuity plan for computer software company, therefore he did the task himself. If you think that you don’t possess the required skillset to develop a business plan software for apple computers or any other relevant service, you must hire a professional for doing so.
Step2: Define your brand
After planning everything about your business plan for software product, you should step into the execution phase. This is the time to acquire licenses, registrations, inventory, and required software and hardware. Meanwhile, you should define your business values and services so that people can know about you.
Step3: Start the recruitment
The next step is to recruit the most component and skillful employees for your business plan for software product. A good approach is to also give them a few months of training so that they can learn to collaborate with each other.
Step4: Promote & market
After establishing your workplace and workforce, the next step is to promote your competitive advantages.
Step5: Establish a web presence
A strong web presence is inevitable for a software company. Since software services can be provided online, your customers are more likely to search about you on Google. Therefore, to offer your services on a wider scale, it is a must to establish a strong online presence.
| Start-up Expenses | |
| Legal | $230,000 |
| Consultants | $0 |
| Insurance | $31,000 |
| Rent | $25,000 |
| Research and Development | $34,000 |
| Expensed Equipment | $55,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $379,000 |
| Start-up Assets | $356,000 |
| Cash Required | $370,000 |
| Start-up Inventory | $56,000 |
| Other Current Assets | $250,000 |
| Long-term Assets | $280,000 |
| TOTAL ASSETS | $1,312,000 |
| Total Requirements | $1,691,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $379,000 |
| Start-up Assets to Fund | $1,312,000 |
| TOTAL FUNDING REQUIRED | $1,691,000 |
| Assets | |
| Non-cash Assets from Start-up | $1,724,000 |
| Cash Requirements from Start-up | $384,000 |
| Additional Cash Raised | $61,000 |
| Cash Balance on Starting Date | $33,200 |
| TOTAL ASSETS | $2,202,200 |
| Liabilities and Capital | |
| Liabilities | $30,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $44,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $74,000 |
| Capital | |
| Planned Investment | $1,691,000 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,691,000 |
| Loss at Start-up (Start-up Expenses) | $437,200 |
| TOTAL CAPITAL | $2,128,200 |
| TOTAL CAPITAL AND LIABILITIES | $2,202,200 |
| Total Funding | $1,691,000 |
Products of Computer Software Company
In your computer software retail business plan, you should also include the services you want to offer. To decide your services, you should study some guide to writing a computer software business plan examples. This will give you a broader idea of what other people are offering in the domain.
The products offered by Tech Solutions are provided below:
- Business Intelligence Tools/ Software
We will offer business intelligent software to help the companies in boosting their business efficiency. Our software offerings to provide visual analytics, data visualization, and interactive dashboarding for your business plan for software product are given below:- Billing Software
- Asset Management software
- Datapine
- Clear Analytics
- Metric Insights
- SAP BusinessObjects
- Enterprise Management Software
To help businesses and organization in managing and integrating their projects, operations, and finances, we’ll offer the following software:- StudioCloud
- Timely
- Scoro
- Odoo
- Netsuite
- Engineering Software
We will also offer software that are used in engineering and process control. In the beginning, we’ll be providing software related to civil, mechanical, software, and electrical engineering. This service will also include the provision of general database software.- AutoCad
- Autodesk Revit
- MATLAB
- Solid Edge
- Rhino
- HEC-HMS
- ETAP
- LabVIEW
- JavaScript and more.
- Computer Hardware Accessories
Our last service will be to provide general computer hardware accessories. Major offerings in this domain will include:- Network Interface Cards
- Monitor
- Expansion cards
- Power supply unit
- Motherboard
- Optical disc drive
- Microprocessor
- Hard disk drive and more.
Marketing Analysis of Computer Software Business
Your business plan for computer software is incomplete unless you have done a detailed marketing analysis in it. Since purchasing software and hiring the persons who can run those software is a costly operation. Therefore, it is a must for you to purchase only the software that are demanded by your target customers. Knowing your target market will help you in understanding which type of software you should acquire. Moreover, by analyzing customers’ buying patterns you can figure out whether or not you should purchase a certain software.
In this computer programs business plan we’re providing the market analysis done for Tech Solutions. Dustin carried out a detailed marketing analysis before developing business plan software for mac computers and other devices. His special focus was to offer software products that weren’t offered by his market competitors.
5.1 Market Trends
The market stats for computer software-related companies are extremely good. According to IBISWorld, market size of $564bn is held just by online computer software sellers in the United States. The trends for business analytics software businesses are also highly encouraging. According to the same source, more than 4.5k such businesses are running in the United States successfully. The business has grown by 22.8% in the past five years, from 2016 to 2021. And is expected to grow more by 13.3% in 2021 alone.
5.2 Marketing Segmentation
The groups of target customers identified by Tech Solutions are provided in this computer software business plan sample.
5.2.1 Companies/ Businesses & Organizations
The first group of our target customers will comprise organizations and enterprises that need management and cloud-based intelligent software to manage their business plan for software product. They are expected to be our potential customers as they will need the latest software support to enhance their productivity.
5.2.2 Engineering Schools & Firms
The second group of our target customers will be the universities and firms that make use of engineering software. They may include design engineering firms, software firms, and manufacturing firms.
5.2.3 Others
The third category includes all other people and businesses who may need software and hardware. For example, retail stores are expected to get billing software from us. High school students are believed to purchase hardware accessories from us etc.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Companies/ Businesses & Organizations | 43% | 55,000 | 57,000 | 58,000 | 59,000 | 60,000 | 10.00% |
| Engineering Schools & Firms | 37% | 38,000 | 39,000 | 40,000 | 41,000 | 42,000 | 10.00% |
| Others | 20% | 25,000 | 26,000 | 27,000 | 28,000 | 29,000 | 11.00% |
| Total | 100% | 118,000 | 122,000 | 125,000 | 128,000 | 131,000 | 10% |
5.3 Business Target
Our business targets are
- To achieve a Net Promoter Score above 50 by the end of the two years of our launch.
- To earn and maintain a CSAT score above 90% within a year of our launch.
- To earn a net profit margin of $32.3k per month by the end of the third year
- To achieve and maintain an average ranking above 4.75 throughout our service years.
5.4 Product Pricing
Our prices are a little higher as compared to our market competitors. It is because of the continuous software support and training we’ll be providing free of cost.
Marketing Strategy of Computer Software Business
In your business plan computer software company you should also include the ways, you will adopt to outperform your competitors. Ideally, you should analyze your competitive benefits, sales business strategy, and forecasted sales in this part of computer software training business plan.
6.1 Competitive Analysis
- Our biggest competitive benefit is that we’re providing free training to our customers. People who will purchase software from us will be given 10-12 days of training so that they can use all the features of the software.
- We are highly customer-oriented. Our collaborative staff will remain in touch with you to provide you expert advice whenever you face any technical issues with the provided software.
- Our software offerings are more than all of our competitors. Therefore, we expect to get more customers than them.
6.2 Sales Strategy
- We’ll establish a strong web and social media presence to reach out to a wider audience.
- To advertise our services, we’ll make use of Google Local ads service, and local newspaper.
- We’ll send our sales executive to several companies and organizations to let them know about us.
- We’ll provide a 20% discount on all of our software for the first month of our launch.
- We’ll provide a 30% discount on all of our hardware products for the first two months of our launch.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Business Intelligence Tools/ Software | 53,000 | 56,180 | 59,551 |
| Enterprise Management Software | 49,000 | 51,940 | 55,056 |
| Engineering Software | 39,000 | 41,340 | 43,820 |
| Computer Hardware Accessories | 23,000 | 24,380 | 25,843 |
| TOTAL UNIT SALES | 164,000 | 173,840 | 184,270 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Business Intelligence Tools/ Software | $63.00 | $73.08 | $84.77 |
| Enterprise Management Software | $59.00 | $68.44 | $79.39 |
| Engineering Software | $52.00 | $60.32 | $69.97 |
| Computer Hardware Accessories | $40.00 | $46.40 | $53.82 |
| Sales | |||
| Business Intelligence Tools/ Software | $3,339,000.00 | $4,105,634.40 | $5,048,288.06 |
| Enterprise Management Software | $2,891,000.00 | $3,554,773.60 | $4,370,949.62 |
| Engineering Software | $2,028,000.00 | $2,493,628.80 | $3,066,165.97 |
| Computer Hardware Accessories | $920,000.00 | $1,131,232.00 | $1,390,962.87 |
| TOTAL SALES | $9,178,000.00 | $11,285,268.80 | $13,876,366.52 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Business Intelligence Tools/ Software | $61.00 | $70.00 | $80.00 |
| Enterprise Management Software | $57.00 | $65.00 | $75.00 |
| Engineering Software | $50.00 | $57.00 | $65.00 |
| Computer Hardware Accessories | $38.00 | $43.00 | $49.00 |
| Direct Cost of Sales | |||
| Business Intelligence Tools/ Software | $3,233,000.00 | $3,932,600.00 | $4,764,064.00 |
| Enterprise Management Software | $2,793,000.00 | $3,376,100.00 | $4,129,230.00 |
| Engineering Software | $1,950,000.00 | $2,356,380.00 | $2,848,326.00 |
| Computer Hardware Accessories | $874,000.00 | $1,048,340.00 | $1,266,297.20 |
| Subtotal Direct Cost of Sales | $8,850,000.00 | $10,713,420.00 | $13,007,917.20 |
Personnel plan
The skills and performance of your employees are the things that will impact your business impression in the long run. To make your startup a success, it is essential to hire your employees with great care. And develop a human resource management plan to help them improve over time.
In this computer hardware software business plan, we’re providing the personnel plan of Tech Solutions.
7.1 Company Staff
Dustin will hire the following employees for his business:
- 1 Co-Manager to manage the company’s operations
- 4 Software Engineers to develop software and train people
- 2 IT Experts to maintain IT systems
- 2 Computer Technicians to help maintain the machinery
- 2 Sales Executives to discover new ventures for the company
- 1 Accountant to maintain financial records
- 1 Store Manager to manage hardware sales
- 2 Drivers
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Co-Manager | $14,000 | $15,400 | $16,940 |
| Software Engineers | $68,000 | $74,800 | $82,280 |
| IT Experts | $28,000 | $30,800 | $33,880 |
| Computer Technicians | $20,000 | $22,000 | $24,200 |
| Sales Executives | $9,000 | $9,900 | $10,890 |
| Accountant | $9,000 | $9,900 | $10,890 |
| Store Manager | $9,000 | $9,900 | $10,890 |
| Drivers | $16,000 | $17,600 | $19,360 |
| Total Salaries | $173,000 | $190,300 | $209,330 |
Financial Plan
Though opening a computer software business doesn’t require you to rent a large space or procure huge inventory, still, the costs of starting and running this business are high. It is because many business software are very expensive especially those which are cloud-based and agile. And secondly, the salaries of highly expert software engineers are also high. Therefore, the finances of this business plan for software product need to be managed.
The best way for managing your finances, investments, profits, and losses is to develop a financial plan. In this computer software business plan sample we’re providing the financial plan that Dustin developed for Tech Solutions.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.16% | 8.23% |
| Long-term Interest Rate | 8.30% | 8.37% | 8.43% |
| Tax Rate | 23.99% | 24.55% | 25.01% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5344 |
| Monthly Revenue Break-even | $133,900 |
| Assumptions: | |
| Average Per-Unit Revenue | $235.00 |
| Average Per-Unit Variable Cost | $0.67 |
| Estimated Monthly Fixed Cost | $161,660 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $9,178,000 | $11,285,269 | $13,876,367 |
| Direct Cost of Sales | $8,850,000 | $10,713,420 | $13,007,917 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $8,850,000 | $10,713,420 | $13,007,917 |
| Gross Margin | $328,000 | $571,849 | $868,449 |
| Gross Margin % | 3.57% | 5.07% | 6.26% |
| Expenses | |||
| Payroll | $173,000 | $190,300 | $209,330 |
| Sales and Marketing and Other Expenses | $132,000 | $130,000 | $131,000 |
| Depreciation | $2,300 | $2,400 | $2,440 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $1,900 | $2,000 | $2,080 |
| Rent | $2,900 | $3,000 | $3,100 |
| Payroll Taxes | $31,000 | $32,000 | $33,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $346,000 | $362,700 | $384,050 |
| Profit Before Interest and Taxes | ($18,000) | $209,149 | $484,399 |
| EBITDA | ($18,000) | $209,149 | $484,399 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($3,600) | $41,830 | $96,880 |
| Net Profit | ($14,400) | $167,319 | $387,519 |
| Net Profit/Sales | -0.16% | 1.48% | 2.79% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $56,000 | $60,480 | $65,318 |
| Cash from Receivables | $18,000 | $19,440 | $20,995 |
| SUBTOTAL CASH FROM OPERATIONS | $74,000 | $80,660 | $87,113 |
| 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 | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $75,000 | $81,000 | $88,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $39,000 | $40,000 | $42,000 |
| Bill Payments | $23,000 | $24,000 | $25,000 |
| SUBTOTAL SPENT ON OPERATIONS | $62,000 | $64,000 | $67,000 |
| 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 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $62,000 | $66,960 | $72,317 |
| Net Cash Flow | $13,800 | $14,500 | $15,900 |
| Cash Balance | $27,700 | $28,100 | $29,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $288,000 | $322,560 | $354,816 |
| Accounts Receivable | $27,300 | $30,576 | $34,367 |
| Inventory | $4,000 | $4,480 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $294,300 | $329,616 | $370,488 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $18,400 | $20,608 | $23,184 |
| TOTAL LONG-TERM ASSETS | $22,000 | $24,640 | $27,720 |
| TOTAL ASSETS | $298,000 | $333,760 | $375,480 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,000 | $21,280 | $23,919 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,600 | $17,472 | $19,639 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,200 | $17,024 | $19,135 |
| Paid-in Capital | $31,000 | $32,000 | $33,000 |
| Retained Earnings | $57,600 | $62,784 | $69,062 |
| Earnings | $208,000 | $226,720 | $249,392 |
| TOTAL CAPITAL | $277,600 | $302,584 | $332,842 |
| TOTAL LIABILITIES AND CAPITAL | $292,800 | $333,760 | $375,480 |
| Net Worth | $275,100 | $299,859 | $329,845 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.05% | 7.81% | 8.66% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.22% | 10.22% | 11.32% | 9.80% |
| Inventory | 5.34% | 5.92% | 6.56% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 150.00% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.85% | 11.90% | 11.93% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.61% | 4.65% | 4.69% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.33% | 7.39% | 7.46% | 7.38% |
| NET WORTH | 101.10% | 101.91% | 102.85% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.88% | 97.44% | 100.17% | 99.00% |
| Selling, General & Administrative Expenses | 93.12% | 95.63% | 98.31% | 97.80% |
| Advertising Expenses | 1.62% | 1.66% | 1.71% | 1.40% |
| Profit Before Interest and Taxes | 41.28% | 42.39% | 43.58% | 33.90% |
| Main Ratios | ||||
| Current | 36 | 37 | 38 | 32 |
| Quick | 32 | 33.6 | 34.44 | 33 |
| Total Debt to Total Assets | 0.20% | 0.19% | 0.18% | 0.40% |
| Pre-tax Return on Net Worth | 74.77% | 75.30% | 75.80% | 75.00% |
| Pre-tax Return on Assets | 93.81% | 98.50% | 103.43% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.66% | 34.70% | 35.78% | N.A. |
| Return on Equity | 56.11% | 57.85% | 59.64% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.9 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 33.2 | 34.86 | 35 | N.A. |
| Accounts Payable Turnover | 16.2 | 16.3 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.3 | 2.4 | 2.4 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.03 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $237,740 | $251,053 | $265,112 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.82 | 0.84 | 0.86 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 28.01 | 28.4 | 28.8 | N.A. |
| Sales/Net Worth | 2.1 | 2.1 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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