Transcript beevm.net
Bee VM BUSINESS PLAN PRESENTATION Basic Information ■ Bee VM ■ Owner – William Ricardi ■ 76 York Park ■ Belfast – BT15 3QW ■ 07508 478789 ■ http://www.beevm.net ■ [email protected] Executive Summary Full Service Cloud system administration business throughout U.K. and Western EU. £225,00 required for 49%, used for: Salaries (78%), Office Expenses (7%), and Advertising (15%). First three years gross sales of 240K, 420K, 600K for net profits of £15K, £160K, £315K. Achieved through direct sales of support time to government interests and medium size businesses. Competition in market has no Full Service option that includes performance and security aspects. Exit after 5 years: £2,162,500 return after profit split and proceeds from sale of the company. Business Concept The primary concept of the business is to provide system administration services in the Cloud throughout the U.K. and Western Europe. These would include VM environment setup, monitoring, security, performance, patching, and BC/DR planning with different price breaks at each purchase level. Target market includes public sector entities often relying on expensive consulting services that do not truly understand the technology, small and medium sized businesses that cannot afford full time systems administration, and large businesses looking to outsource. Future expansions to the product line may include services in extended virtual environments (Second Life, Kitely, OnVerse, etc.) and payment (with Escrow options) systems for unmined virtual currency (Ripple, etc.). “ Our mission is to bring effective, reasonably priced cloud based system administration to the United Kingdom, and in time, the world. ” Market Summary Roles for virtual system administrators have been advertised for the last 5+ years, but no competitive full service ITMaaS has appeared in the U.K. An analysis of the partial-service market in Q3 and Q4 of 2014 showed that current commercial suppliers were charging up to 50% more than even a reasonable, healthy profit would dictate. This indicates weakness and inefficiency in their methods, and a lack of automation knowledge. The partial-service competition in the U.K. includes Fujitsu Information Management UK, Hicom, HP Cloud Computing Team, and Accenture. Our target pricing would be a yearly subscription of £2,500 per server on average. The client gets full server monitoring and 25 remote consultation hours per server for non-routine services. Services would be billed at £75 an hour thereafter. Opportunities The problems of bad system administration in the cloud include increased long term costs, service outages, and security breaches leading to devastating reputational damage. By providing a competent full service alternative to high priced partial-service providers, clients would save money in the long run and mitigate outages and reputational risk. Using affiliate programs, we could allow converted individuals and companies to share their positive experiences and leverage them as a sales force.. Both public and private sector entities have demonstrated a need in this area, covering partial-service models with expensive consultancy time. As more companies adapt to modern Cloud infrastructure, the need for competent full service Cloud system administration only increases. Competition Competition in the U.K. includes Fujitsu Information Management UK, Hicom, HP Cloud Computing Team, and Accenture. None of the above provide full service system administration on demand, setting demarcations of service that the client is often unaware of at first. Our company’s main competitive advantage is full service: We have the ability to provide not only basic services, but enhanced services such as Cloud security, performance, and BC/DR contingency planning. Our second advantage is that our SysAdmin-only policy is non-threatening to mainstream Cloud providers. Unlike large companies that offer their own Cloud hosting, by staying on the service-only side, we can partner with the likes of Amazon Cloud, Rackspace, Microsoft Azure, Google Cloud and IL2/IL3 government providers such as SkyScape. Goals and Objectives 8,000 support hours sold in 3 years, double support available in 5 years. Strengths: Automation, performance, security offerings. Weaknesses: New name, will require niche penetration and adverts. Opportunities: Government pushing for Open Source and Agile now. Threats: Copycats will arise in 3 years time, forcing constant innovation. Specific, measurable objectives for achieving our goals: Take over government contracts for system administration in known painful areas such as sectors of the NHS, sectors of the DVLA, and police services. Launch both a targeted advertising and affiliate partner campaign. Co-advertise with major Cloud providers as a preferred service partner. The Team ○ CEO – William Ricardi ○ 19 years technical management, administration, testing, and sales. Contracting and enterprise consulting experience. Award winning software tester, Performance Tester of the Year 2010. ○ Core Team ○ A combined 30+ years of system administration, security, performance, and business administration talent, from one of the most respected consultancy firms in the world. Resource Requirements Personnel: William Ricardi will manage the technical direction and execution of project directives. The technical team will look after the functionality, monitoring, security, and performance of systems. The BA will manage technical sales and contract adherence. Technology: Open source software, commercial security and testing suites, website hosting and bandwidth, Sage Pay credit card processing. Finances: £225K in seed money provided by investors for a 50% stake in profit share and 49% corporate ownership. Promotion: Online, establish affiliate program, Google SEO. Office Space: Work from home possible, but centrally managed space for client meetings still required. Financial Plan Projected 5 employees at average salary of £35,000 year one. £5,000 managed office space. £5,000 hardware, software, and bandwidth. £5,000 education and certification. £35,000 travel, trade shows, and advertising. £225,000 total costs year one. 8000 available support hours at £75 an hour: £600,000 at full utilization. Projected Year 1 utilization: 40% - £240,000. Projected Year 2 utilization: 70% - £420,000. Projected Year 3 utilization: 100% - £600,000. At 50% investor net profit capture and +5% to +10% costs year on year, funding recap by Q3 Year 3, doubled by Q4 Year 4. With a Year 5 expansion, £300,000+ investor profit per annum is possible. Year by Year Projections Financial Year Salaries Office Expenses Travel and Ads Total Annual Costs Gross Sales Net Profits 15/16 175,000 15,000 35,000 225,000 240,000 15,000 16/17 192,500 22,500 45,000 260,000 420,000 160,000 17/18 211,750 25,000 48,250 285,000 600,000 315,000 Totals 579,250 62,500 128,250 770,000 1,260,000 490,000 At an investment recapture rate of 50% of the Net Profits, the initial £225,000 investment will be recaptured by Q3 of Year 3. Year 4 and after, the yearly investor profits with a minimal growth plan would be £160,000 per year. With an aggressive growth plan accepting lesser Year 4 yields, Year 5 Net Profits could reach upward of £600,000 for investor profits in excess of £300,000 per annum. Month by Month Projections 07/15 08/15 09/15 10/15 11/15 12/15 01/16 02/16 03/16 04/16 05/16 06/16 Salaries 14583 14583 14583 14583 14583 14583 14583 14583 14583 14583 14583 14583 Expense 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 1250 Ads 0 6000 2000 2000 4500 2000 2000 6000 2000 2000 4500 2000 Sales 0 10000 0 20000 10000 0 10000 67500 22500 10000 67500 22500 Profits -15833 -11833 -17833 2167 -10333 -17833 -7833 45667 4667 -7833 47167 4667 YTD Net -15833 -27666 -45499 -43332 -53665 -71498 -79331 -33664 -28997 -36830 10337 15004 07/16 08/16 09/16 10/16 11/16 12/16 01/17 02/17 03/17 04/17 05/17 06/17 Salaries 16042 16042 16042 16042 16042 16042 16042 16042 16042 16042 16042 16042 Expense 1875 1875 1875 1875 1875 1875 1875 1875 1875 1875 1875 1875 Ads 2500 6500 2500 2500 6000 2500 2500 6500 2500 2500 6000 2500 Sales 67500 20000 10000 87500 10000 0 10000 67500 35000 22500 67500 22500 Profits 47083 -4417 -10417 67083 -13917 -20417 -10417 43083 14583 2083 43583 2083 YTD Net 47083 42666 32249 99332 85415 64998 54581 97664 112247 114330 157913 159996 Year 18/19 Expansion and 2021 Exit With investor agreement, 18/19 would see a cost increase from £300K up to £500K to facilitate expansion, putting profits for that year down to £160,000, but allowing for accelerated growth in 19/20. With the expansion of staff and of services sold (entering the area of virtual currency facilitation, etc.), 19/20 projections could see gross sales of £1.35 million with net profits of £675K, positioning Bee VM for exit. Trade sale on approx. valuation of £3 million could be conducted in 2021. ROI after a 5 year investment of £225,000: £2,162,500 return after five years of profit split, and proceeds from sale of the company. Financial Assumptions & Forecast Basic assumptions are a continued market trend towards Cloud computing, and growing need for security, Agile, and automation. Studies by Cisco, Goldman Sachs, and Centaur Partners put the 2018 CAGR of Cloud services at between 21% and 30% based on sector. ComputerWorld forecasts (as reported by Forbes) project in 2015: A 24% decrease in physical hardware spending, a 46% increase in security spending, and a 42% increase in Cloud spending . InformationWeek’s Wallstreet & Technology forecast shows an over 40% savings for clients embracing software automation and Agile in 2015. Projection Risks Lack of year 1 market penetration will lead to a slower growth curve. Increased Year 2+ competition if success is seen as threatening to partialservice providers. Expect counter-marketing in response to major contract announcements. Local tech demands rise, salary costs go up further than projected. This could reduce net profits by 7 to 12 percent in year 3+. Exchange rate shift from Euro to Pound stifles Year 4+ Western Europe expansion rates.