Technology business plan for starting your own business

If there is one field that cannot go out of business within the foreseeable future, that is the technology business. This business has been growing vastly since the start of this century. There are more technology businesses out there than you can count, yet there is a capacity for new entrants in this field. We have made this business plan for technology company to tell you in sheer detail how to start a information technology company.

This business plan is based on the real-life example of MacArthur Tech Services. Let’s see how this business plan for investors can help you make money.

Executive Summary

2.1 The Business

MacArthur Tech Services will be a licensed and register tech services provider in Detroit. It will be owned by Maximilien MacArthur who is a former executive from Silicon Valley and has worked for many tech startups. This business plan for tech startup will help you learn from MacArthur’s experience.

2.2 Management of Technology Company

While explaining how to start a business solutions company, the first important thing to learn is the management of the company. You need to know the managemental hierarchy of the company for technology business setting up. This can also be used as a business plan for bank to get debt financing for your startup.

The management of MacArthur Tech Services will mainly be handled by MacArthur himself. He will hire experts of the field to help him with the operations.

2.3 Customers of Technology Company

As a semiconductor business plan is a vast field, we need to determine what customers would we be dealing. This includes the following:

  1. Domestic Customers

These customers will include the people who:

  • Want to get their personal computers fixed.
  • Want home-based tech and connectivity solutions.
  • Want consultancy for domestic tech setups.
  1. Business Clients

These will be slightly bigger than the domestic customers and will include:

  • Businesses looking for automation.
  • Small businesses looking for digital bookkeeping and inventory management.
  • Businesses looking for better connectivity solutions.
  1. Schools

These customers will need:

  • Campus management solutions.
  • Labs and Library computer setups.
  1. Corporate Clients

These will be the biggest clients needing corporate-grade computing and tech solutions.

2.4 Business Target

The target will be to become the leading provider of tech services in all of North America.

Technology Business Plan - 3 Years Profit Forecast

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Company Summary

3.1 Company Owner

The owner of MacArthur Tech Services, Maximilien MacArthur is an expert of the field. He started his career with a repair shop and that makes and excellent computer repair business plan today. He then moved to the Silicon Valley where he made a information technology business plan example by starting a number of companies and making them successful.

3.2 Why the Technology Company is being started

MacArthur has an extensive knowledge of the field and has set many information technology business continuity plan example. He has helped a number of tech companies successful and is now planning to make a company of his own. He is passionate about it and knows where there is a gap in this business and how he can make a name in this field.

3.3 How the Technology Company will be started

Step1: Planning

The next thing we need to cover in this technology business plan sample is the planning to start the business. No business plan for tech company can be complete without that.

We need to plan everything from the number of employees and starting costs for the business to the perspective customers.

Step2: Branding

People trust the companies that have established brand names. In order to make it successful, our tech company will also establish a strong brand name. An impressive brand logo, moto, and color scheme will be chosen to make this happen.

Step3: Establish Your Office

MacArthur Tech Services will have an office in downtown Detroit from where all the services of the company will be extended to the customers.

Step4: Establish a Web Presence

No successful technology business plan can be complete without web presence. An extensive website will be launched for customers to interact with MacArthur Tech services.

Step5: Promote and Market

All possible ways of communication will be used to make sure that MacArthur Tech Services is known in all of Detroit and Michigan.

Technology Business Plan - Startup Cost

Start-up Expenses  
Legal $246,000
Consultants $0
Insurance $28,000
Rent $25,000
Research and Development $34,000
Expensed Equipment $59,000
Signs $4,200
TOTAL START-UP EXPENSES $396,200
Start-up Assets $380,000
Cash Required $400,000
Start-up Inventory $59,000
Other Current Assets $220,000
Long-term Assets $280,000
TOTAL ASSETS $1,339,000
Total Requirements $1,735,200
START-UP FUNDING
Start-up Expenses to Fund $396,200
Start-up Assets to Fund $1,339,000
TOTAL FUNDING REQUIRED $1,735,200
Assets
Non-cash Assets from Start-up $1,778,000
Cash Requirements from Start-up $398,000
Additional Cash Raised $60,000
Cash Balance on Starting Date $38,000
TOTAL ASSETS $2,274,000
Liabilities and Capital
Liabilities $30,000
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $43,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $73,000
Capital
Planned Investment $1,735,200
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $1,735,200
Loss at Start-up (Start-up Expenses) $465,800
TOTAL CAPITAL $2,201,000
TOTAL CAPITAL AND LIABILITIES $2,274,000
Total Funding $1,735,200

Business Plan for Investors

Services

The next thing we need to address in this technology business plan template are the services we will be providing. As Technology is a vast field and no single company can reasonably cover all aspects of the industry, we’ll offer limited services in this information technology startup business plan and will try to be the best at them.

The main services provided by MacArthur Tech Services will include:

  1. Connectivity Solutions

This area of the services provided by MacArthur will include:

  • Connectivity solutions for domestic clients.
  • Connectivity solutions for offices and businesses.
  • Connectivity solutions for corporate clients.
  1. Tech Equipment Supply

This segment of MacArthur’s services will include the supply of:

  • Computers.
  • Routers.
  • Projectors.
  • Printers.
  1. Tech Support Services

MacArthur Tech Services will offer support services for clients. These will include support for:

  • Any major fault in tech setups.
  • Break down of network or mainframes in offices.
  • Personal and domestic tech support.

MacArthur Tech Services will maintain a 247 support helpline to provide support to people facing any tech problems.

  1. Tech Consultancy

For the clients that do not know where to start with tech, we’ll be giving tech consultancy services.

Marketing Analysis of Technology Business

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If you want to know how to write a business plan for a tech startup, the most important thing for that is the marketing analysis of the technical business plan sample. We are performing the marketing analysis of thebusiness plan technology description to make things easier for you. It is paramount to have an extensive knowledge of thetechnology business solutions if we want the business to be successful.

5.1 Market Trends

The tech market is one of the most fast-growing ones all over the globe. Most of the top companies and richest people in the world right now are associated with this field. We have seen a lot of tech companies come forth and be successful in this field.

The field is a bit saturated but there is always place for companies that come with the intention of providing exalted services in this industry.

5.2 Marketing Segmentation

The customers of our Tech business will be divided in the following market segments. Each segment will need its own specialized set of services.

Technology Business Plan - Marketing Segmentation

5.2.1 Domestic Individual Customers

Valentin Marinov
TrustPilot

excellent work

excellent work, competent advice.
Alex is very friendly, great communication.
100% I recommend CGS capital.
Thank you so much for your hard work!

∙ Valentin Marinov

These will be the lowest paying customers but with the largest values. Anyone who needs an advice on what laptop to buy to anyone looking for someone to setup their workstation will fall into this category. We will provide all the services from the installation of Windows to replacing broken displays. Our focus will be to make repeat customers here.

5.2.2 Small Large Businesses

The businesses needing services for their tech setup will also be our customers. We will provide them with the services including automation, bookkeeping, inventory management, connectivity, and all other services that they might need.

5.2.3 Corporate Clients

This will be the market segment for us that will make the bulk of our income. They will be in a lesser number but will pay the premium prices. We will offer all the services from cloud computing to blockchain services and all other tech-related services a corporation might need.

5.2.4 Nonprofits

Lastly, we will offer discounted services to the nonprofit segment of the business to play our role in community development.

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Domestic Individual Customers 31% 45,000 47,000 49,000 51,000 53,000 10.00%
Small Large Businesses 29% 40,000 41,000 43,000 45,000 47,000 10.00%
Corporate Clients 26% 32,000 33,000 35,000 37,000 39,000 10.00%
Nonprofits 14% 11,000 12,000 13,000 14,000 15,000 11.00%
Total 100% 128,000 133,000 140,000 147,000 154,000 10%

5.3 Business Target

  • To become the leader in tech services in all of North America within 5 years.
  • To provide impeccable tech services to our clients.
  • To expand to at least 3 more states by the end of year 1.
  • To start making an annual $368,000 in profit by the end of year 3.

5.4 Product Pricing

We will keep the product prices lower than the market average at the start. This will be done to attract the customers and once we have enough of them, we will move on to increase the prices.

Marketing Strategy

Now that we know the market we are going to enter, the next thing we need is a business plan in marketing to make sure we get our business objectives. As the Tech market is a saturated one, marketing is one of the decisive factors that can make any information technology business proposal template a success.

We need to be objective here and use any competitive leverage that we have in order for us to be successful and we’ll spare no expense in making sure that our technology startup company is successful.

6.1 Competitive Analysis

  1. The thing that will give us an edge on the competitors will be the extensive experience of the owner Mr. MacArthur.
  2. We will provide top-notch service and only the best of the best equipment to earn permanent recurring clients.
  3. We will provide a 247 support helpline, something that can make a huge difference and something not much of the competitors have.

6.2 Sales Strategy

  • We’ll target the domestic, business, and corporate market at once to ensure that we get the best sales margin.
  • We’ll provide a one-year warranty on all our products and services to make people rely on us and buy from us.
  • Like all the best biotech business plans, we will offer huge discounts for the first two months.

6.3 Sales Monthly

Technology Business Plan - Sales Monthly

6.4 Sales Yearly

Technology Business Plan - Sales Yearly

6.5 Sales Forecast

Technology Business Plan - Unit Sales

Sales Forecast      
Unit Sales Year 1 Year 2 Year 3
Connectivity Solutions 46,000 48,760 51,686
Tech Equipment Supply 40,000 42,400 44,944
Tech Support Services 44,000 46,640 49,438
Tech Consultancy 41,000 43,460 46,068
TOTAL UNIT SALES 171,000 181,260 192,136
Unit Prices Year 1 Year 2 Year 3
Connectivity Solutions $45.00 $52.20 $60.55
Tech Equipment Supply $60.00 $69.60 $80.74
Tech Support Services $42.00 $48.72 $56.52
Tech Consultancy $35.00 $40.60 $47.10
Sales
Connectivity Solutions $2,070,000.00 $2,545,272.00 $3,129,666.45
Tech Equipment Supply $2,400,000.00 $2,951,040.00 $3,628,598.78
Tech Support Services $1,848,000.00 $2,272,300.80 $2,794,021.06
Tech Consultancy $1,435,000.00 $1,764,476.00 $2,169,599.69
TOTAL SALES $7,753,000.00 $9,533,088.80 $11,721,885.99
Direct Unit Costs Year 1 Year 2 Year 3
Connectivity Solutions $43.00 $49.00 $56.00
Tech Equipment Supply $58.00 $66.00 $76.00
Tech Support Services $40.00 $45.00 $52.00
Tech Consultancy $33.00 $37.00 $43.00
Direct Cost of Sales
Connectivity Solutions $1,978,000.00 $2,389,240.00 $2,894,393.60
Tech Equipment Supply $2,320,000.00 $2,798,400.00 $3,415,744.00
Tech Support Services $1,760,000.00 $2,098,800.00 $2,570,796.80
Tech Consultancy $1,353,000.00 $1,608,020.00 $1,980,906.80
Subtotal Direct Cost of Sales $7,411,000.00 $8,894,460.00 $10,861,841.20

Personnel plan

The next thing needed for writing a business plan for a tech startup is the planning of the staff needed to efficiently run the company. This business plan for a web hosting and other tech services needs a number of skilled people to help it run properly. As the main focus of this business is to provide technical support and services, these employees will be the most valuable asset of the business.

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7.1 Company Staff

  • Maximilien MacArthur will be the owner and the CEO.
  • 1 General Manager.
  • 1 Operations Manager.
  • 1 Liaison Manager.
  • 5 Technicians.
  • 2 Engineers.
  • 5 Support Agents.
  • 2 Drivers for the support Team.
  • 2 Office Boys.
  • 1 Receptionist.
  • 1 Accountant.

7.2 Average Salary of Employees

 Personnel Plan      
Year 1 Year 2 Year 3
General Manager $13,000 $14,300 $15,730
Operations Manager $13,000 $14,300 $15,730
Liaison Manager $12,000 $13,200 $14,520
Technicians $40,000 $44,000 $48,400
Engineers $24,000 $26,400 $29,040
Support Agents $45,000 $49,500 $54,450
Drivers $17,000 $18,700 $20,570
Office Boys $16,000 $17,600 $19,360
Receptionist $6,000 $6,600 $7,260
Accountant $9,000 $9,900 $10,890
Total Salaries $195,000 $214,500 $235,950

Financial Plan

This last part of this business plan information technology company is the financial planning of the business. The recipe for a successful business is to decrease the expenses and increase the income of the setup. To make this happen, we have to have a clear idea of the expenses for starting and running the business. Let’s see a tentative budget planning for a technology business.

Here is a list of the expenditure for starting the business and running it until it starts generating enough revenue to fund itself and return profit.

  • The cost of setting up the office.
  • The cost of setting up an online presence.
  • The cost of advertisement of the business.
  • The salaries of the staff for the starting year.
  • The cost of overheads included in running the business.

8.1 Important Assumptions

 General Assumptions      
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.16% 8.18% 8.25%
Long-term Interest Rate 8.34% 8.38% 8.42%
Tax Rate 23.40% 23.70% 24.10%
Other 0 0 0

8.2 Break-even Analysis

Technology Business Plan - Break-even Analysis

 Break-Even Analysis  
Monthly Units Break-even 5339
Monthly Revenue Break-even $131,820
Assumptions:
Average Per-Unit Revenue $234.00
Average Per-Unit Variable Cost $0.66
Estimated Monthly Fixed Cost $162,600

 

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss      
Year 1 Year 2 Year 3
Sales $7,753,000 $9,533,089 $11,721,886
Direct Cost of Sales $7,411,000 $8,894,460 $10,861,841
Other $0 $0 $0
TOTAL COST OF SALES $7,411,000 $8,894,460 $10,861,841
Gross Margin $342,000 $638,629 $860,045
Gross Margin % 4.41% 6.70% 7.34%
Expenses
Payroll $195,000 $214,500 $235,950
Sales and Marketing and Other Expenses $119,000 $120,000 $121,000
Depreciation $2,210 $2,340 $2,450
Leased Equipment $0 $0 $0
Utilities $2,800 $2,900 $3,100
Insurance $1,900 $2,000 $2,100
Rent $2,700 $2,800 $2,900
Payroll Taxes $30,000 $31,000 $32,000
Other $0 $0 $0
Total Operating Expenses $353,610 $375,540 $399,500
Profit Before Interest and Taxes ($11,610) $263,089 $460,545
EBITDA ($11,610) $263,089 $460,545
Interest Expense $0 $0 $0
Taxes Incurred ($2,322) $52,618 $92,109
Net Profit ($9,288) $210,471 $368,436
Net ProfitSales -0.12% 2.21% 3.14%
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8.3.1 Profit Monthly

Technology Business Plan - Profit Monthly

8.3.2 Profit Yearly

Technology Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Technology Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Technology Business Plan - Profit Yearly

8.4 Projected Cash Flow

Technology Business Plan - Projected Cash Flow

 Pro Forma Cash Flow      
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $52,000 $56,160 $60,653
Cash from Receivables $18,000 $19,440 $20,995
SUBTOTAL CASH FROM OPERATIONS $70,000 $76,300 $82,404
Additional Cash Received
Sales Tax, VAT, HSTGST 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 $71,000 $77,000 $83,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $32,000 $33,000 $34,000
Bill Payments $18,000 $19,000 $20,000
SUBTOTAL SPENT ON OPERATIONS $50,000 $52,000 $54,000
Additional Cash Spent
Sales Tax, VAT, HSTGST 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 $51,000 $55,080 $59,486
Net Cash Flow $14,300 $15,000 $17,000
Cash Balance $23,000 $24,000 $25,000

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet      
Assets Year 1 Year 2 Year 3
Current Assets
Cash $269,000 $301,280 $331,408
Accounts Receivable $23,000 $25,760 $28,954
Inventory $4,100 $4,592 $4,900
Other Current Assets $1,000 $1,000 $1,000
TOTAL CURRENT ASSETS $277,000 $310,240 $348,710
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $17,800 $19,936 $22,428
TOTAL LONG-TERM ASSETS $21,500 $24,080 $27,090
TOTAL ASSETS $294,000 $329,280 $370,440
Liabilities and Capital Year 4 Year 5 Year 6
Current Liabilities
Accounts Payable $18,800 $21,056 $23,667
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $15,300 $17,136 $19,261
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $15,000 $16,800 $18,883
Paid-in Capital $29,000 $30,000 $30,950
Retained Earnings $55,000 $59,950 $65,945
Earnings $192,000 $209,280 $230,208
TOTAL CAPITAL $279,000 $304,110 $334,521
TOTAL LIABILITIES AND CAPITAL $294,000 $329,280 $370,440
Net Worth $285,000 $310,650 $341,715

8.6 Business Ratios

 Ratio Analysis        
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 7.25% 8.03% 8.90% 3.00%
Percent of Total Assets
Accounts Receivable 9.21% 10.20% 11.31% 9.80%
Inventory 5.44% 6.03% 6.68% 9.90%
Other Current Assets 2.13% 2.36% 2.61% 2.40%
Total Current Assets 150.01% 152.00% 153.00% 158.00%
Long-term Assets 11.38% 11.40% 11.50% 12.00%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.84% 4.88% 4.92% 4.34%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
Total Liabilities 7.60% 7.66% 7.73% 7.38%
NET WORTH 100.20% 101.00% 101.93% 110.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 96.00% 98.59% 101.35% 99.00%
Selling, General & Administrative Expenses 93.00% 95.51% 98.19% 97.80%
Advertising Expenses 1.90% 1.95% 2.01% 1.40%
Profit Before Interest and Taxes 42.00% 43.13% 44.34% 33.90%
Main Ratios
Current 32 33 34 32
Quick 33 33.2 34.03 33
Total Debt to Total Assets 0.19% 0.18% 0.17% 0.40%
Pre-tax Return on Net Worth 73.09% 74.00% 76.00% 75.00%
Pre-tax Return on Assets 95.01% 99.76% 104.75% 111.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 3.80% 3.92% 4.04% N.A.
Return on Equity 55.01% 56.72% 58.47% N.A.
Activity Ratios
Accounts Receivable Turnover 7.7 7.8 7.9 N.A.
Collection Days 100 100 100 N.A.
Inventory Turnover 31.6 33.18 34 N.A.
Accounts Payable Turnover 15.4 16 16.6 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 2.4 2.5 2.6 N.A.
Debt Ratios
Debt to Net Worth -0.04 -0.03 -0.03 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $250,000 $264,000 $278,784 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.87 0.88 0.89 N.A.
Current DebtTotal Assets 1% 0% 0% N.A.
Acid Test 28.03 28.06 28.09 N.A.
SalesNet Worth 2.1 2.1 2.2 N.A.
Dividend Payout 0 0 0 N.A.

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