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Business plan: Customize PCs

A Project Report On
Entrepreneurship Development -Business Plan Submitted in the partial fulfillment for the requirement of Post Graduate Diploma in Management

Submitted To: Sanjeela Mathur

Submitted By: Jatin Ahuja Rahul Bagga Gautam Sharma Sachin Narang

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL, KALKAJI, NEW DELHI

S No. 1 2 3 4 5 6 7 8 9

Particulars Executive Summary Company Description Industry Analysis Target Market Competition Marketing Strategies Operations Management Financial Summary

Page No.

Executive Summary
Custom PCs aims to offer its customers the flexibility of a custom built computer while providing a friendly and personal shopping experience. Unlike its competitors, Custom PCs will give each customer a personally tailored computer based on their particular needs, so that customers will not have to pay for what they dont need. By carefully analyzing a customers needs and preferences, Custom PCs can provide a perfect fit based on the customers intended uses, and the computer will be built instantly in the store. Custom PCs also aims to assist the elderly and less informed computer shopper to make their shopping experience as pleasant as possible. With technology growing rapidly and a large generation still knowing so little about computers, there is a strong need for personal computer shopping. With specialized technology and graphic and speed intensive PC games and software, the lack of power in shelf bought computers calls for a more needs based method of computer shopping. One that doesnt require the consumer to spend more money than necessary on features he or she will never use. Because computers have so many uses, many consumers spend a lot of energy trying to find an affordable computer that will do what they need, and no more. Custom PCs will compete well in our market by providing the leading edge in computer technologies, highquality, reliable machines built by competent, certified technicians, by delivering the highest quality in customer support while offering a friendly and pleasant atmosphere at competitive prices, as well as building a strong reputation with clients through unmatched service and customer satisfaction. Custom PCs will focus on one major shopping center: Lakeside Village, which is a dynamic lifestyle complex located in Lakelands upscale Grassland area, and offers a total of 610,000 square feet of mixed-use space. The outdoor mall also includes a movie theater, hotel, restaurants, and second-floor commercial office space. Our target customers will be a wide range of ages, seeing as how nearly everyone uses computers. However the elderly, who generally know too little about computers to efficiently shop for one, and teenagers/young adults that play PC games that require more power than the average computer, will be our primary focus. Our services can be suited for consumers of nearly every income class, from the lower middle-class through the high-class consumer.

We will open for business on June 1, 2008. We project healthy revenues by the end of the first year, and expect to triple that by the end of 2010. Our biggest operating expenses will be rent on our facilities and the first stocking of a wide range of computer parts and accessories. We would eventually like to grow into a franchise, but growth will be determined based on future cash flow and earnings. We anticipate a net profit beginning in our second year. Such a proposed business requires a considerable amount of investment. Consequently, sufficient funding in the form of an SBA loan would be a vital step in the startup for this business.

Company Description
1.1 Mission In this day in age, computers have too many different uses for consumers to purchase computers intended for a general market. Technology changes rapidly, and so do the prices. Often consumers end up paying too much for a computer either due to lack of knowledge or lack of options. Most computers available off the shelf today have more features than some would ever use, especially the elderly. With an all custom PC store, a person with little or no knowledge in computers can purchase a totally new and reliable computer personally suited just for them and spend the least amount of money possible. This method of computer shopping would offer the advantages of a shelf bought computer, such as warranties, quality, and reliability. And with a more personal than ever customer relationship and premium customer service, customers know they will have a reliable support service to go to if they have a problems or questions about their product. No more calling a technical support hotline or sending computers back to the manufacturer. Custom PC is a one-stop shop for virtually any computer shopper. The store dedicates its efforts and resources toward ensuring customer satisfaction while meeting the needs and budgets of every shopper, from old users to gamers. 1.2 Company Summary Custom PCs will be located in NEHRU PLACE. The store will apply 8 key principles that will define the business and its services: High Quality Custom Built Computers World Class Customer Service and Support Up To Date Technology, Parts, and Equipment Skilled, Competent, and Friendly Staff Full Range of Peripherals, Games, and Services for Gaming Customers Patience, Understanding, and Guidance for the Less Computer Literate Shopper In-Store, Same Day Repair Warranties on All Custom PCs Machines A Relaxed, Friendly Atmosphere and A Pleasant Shopping Experience

1.3 Location Custom PCs will focus on one major shopping center: Lakeside Village, which is a dynamic lifestyle complex located in Lakelands upscale Grassland area, and offers a total of 610,000 square feet of mixed-use space. The outdoor mall also includes a movie theater, hotel, restaurants, and second-floor commercial office space. 1.4 Financial Overview Initial working capital requirements will be Rs50, 00,000, which will consist of owners capital and a business line of credit from a financial institution.

1.5 Effective Date of Business We will open for business on June 1, 2012. We project healthy revenues by the end of the first year, and expect to triple that by the end of 2015.

Industry Analysis
2.1 Description of Industry The personal computer industry is a vast and rapidly growing market. With very few, if any, businesses offering our services, there is little or no competition in the custom computer niche. However, we will have to compete on some level with off-the-shelf retailers. Personal computer sales have been expanding since the 1980s, and further growth in the industry is almost guaranteed. 2.2 Trends Older baby boomers are beginning to buy computers, especially for basic functions such as banking and emailing. In addition, gaming is becoming very popular among the younger generation. 2.3 Strategic Opportunities Off the shelf computers do not meet the needs for these groups. Custom PC will take advantage of these unmet needs while redefining the standards of computer retailing.

Target Market
3.1 Target Market Our target market is any potential computer buyer. While our services may appeal most to the less informed shopper and gaming community, our target market will remain broad, because every consumer can benefit from a custom computer. This includes professionals using processor and graphic intensive software, or anyone that uses any kind of specialized application: Graphic designers Video editors Visual artists Architects Schools Scientists o Biologists o Physicists o Chemists o Researchers Software Developers Engineers The number of uses for computers is so vast, and because they make nearly any process more efficient (for both businesses and consumers), that number will continue to grow. Consequently, the need for specialized computers is significant, and will continue to grow. 3.2 Market Potential The number of uses for computers is so vast, and because they make nearly any process more efficient (for both businesses and consumers), that number will continue to grow. Consequently, the need for specialized computers is significant, and will also continue to grow.

3.3 Current Patterns With technology in computers advancing at such a high rate, the computer retail business is prospering. Baby boomers and elders continue to enter into the age of computing. As hardware capabilities develop, so does software and games. Businesses and corporations are finding more and more uses for computers every day. 3.4 Sensitivities Each of the following is sensitive factors pertaining to the industry, which could potentially affect the buying behavior of consumers: Technological advances Increased capabilities and functionality New ideas

Competition
4.1 Potential Future Competitors Copycats National retailers potentially offering customization services. 4.2 Entry Barriers Attracting qualified and personable employees to provide the best service Need for start-up capital Saturated market Obtaining reliable suppliers

Marketing Plan & Sales Strategy


5.1 Key Message Custom PC will give each customer a personally tailored computer based on their particular needs. 5.2 Message Delivery We will deliver our message through a combination of advertising, promotional events, and community involvement:
1.

Advertising will consist of a combination of print, radio, and television. Channeling appropriate media outlets will help to maximize exposure to our target customer base.

2.

Promotional Eventswe will engage in promotional activities with the goal of increasing our visibility and attracting new customers. Initial ideas of promotional activities include hosting all-night gaming tournaments and sponsoring or participation in technology expos.

3.

Community Involvementwe will become members of the Chamber of Commerce, participating in its networking functions.

Operations
6.1 Business Facilities The business will be located at NEHRU PLACE and will lease approximately 2,000 square feet of retail space. 6.2 Production Plan We will have a wide assortment of computer parts and accessories in inventory in order to build a specialized computer of any number of configurations. Keeping a large inventory will allow larger availability of parts and accessories for shoppers, and will allow the needs of the customer to be met by ensuring the availability of the necessary parts to build a specialized computer in a timely manner. The aim for Custom PC is to discover a customers needs, and then determine the right computer for the customer. The computer specifications and detailed price summary is then put on paper and explained for the customer, who will then be able to adjust specifications and details of the purchase according to their budget. Once the customer decides on the right configuration, a technician will build the computer instantly, in the store. Building the computer, installing software, and testing should take around an hour, so the customer may choose to enjoy Lakeside Villages many shops, restaurants, cafs, or ice-creameries while they wait. Accessories will also be sold in the store including monitors to make Custom PCs a source for a broad range of computer shoppers. 6.3 Workforce Plan Our staff will consist of the Owner/Manager, an Assistant Manager/Technician, and a parttime Assistant Manager. Duties and Responsibilities of Employees: 1. Owner/Manager: Run and manage the business and facility while assisting customers. 2. Assistant Manager/Technician: Building custom ordered computers and assisting the manager with various tasks. 3. Part-time Assistant Manager: When all employees are present, the part-time assistant manager will be responsible for helping the manager maintain the store and assist customers, or other various tasks. In the absence of a technician, the part-time assistant manager will be solely responsible for covering the responsibilities of the manager while

the manager covers the responsibilities of the technician. The part-time assistant manager will also undertake the same responsibilities in the absence of the manager. Employees will be cross-trained in order to be well prepared and able to function in other areas.

6.4 Impact of Technology Technology will not have a significant impact on the operations of our business; however it will have a considerable impact on growth prospects.

Management & Organization


7.1 Management Team Owner/President Mr. JATIN AHUJA the Owner/President will have overall fiscal responsibility, ensuring that the business is financially sound and attains its planned goals.

Six years of experience in computer building and repair High School Graduate Minor knowledge in business management and accounting systems

7.2 Recruiting Employees will be sought after based on the following criteria: IT Certified Extensive Experience and Knowledge in Managerial Concepts and Sales Skill Employee History and Reputation

An interview will be conducted to determine the applicants ability to work well with others, judge his or her attitude, competence, and friendliness, as well as how well he or she is with customers.

Financials
8.1 Accounting System We plan to utilize QuickBooks as our primary accounting software. Our inventory records will be accounted for using QuickBooks as well. 8.2 Financial Assumptions Starting cost of the business will be the: 1. 2. 3. 4. Commercial Space S/W And H/W Engineers Necessary tools and Machines Advertising For this entire thing near about Rs. 50, 00,000 is needed. Owner will add their capital and rest money will be taken by the SBA-Guaranteed Loan from the banks. The cost of the loan will be 10%-12% (New business development plan will easily be funded by the Indian government). Revenue: Will average 3-6 computer sales per day. The cost of the PCs as per the modification and customization needed by the customers Gross margin will average 35% for the sale of computers and accessories Compensation: Full-time S/W & H/W will be paid RS25,000 per Month with annual raises of 5% Owner will distribute the profits as per their share. A part of the profit will be reinvested to develop the business. 3 workers for delivery and other company. The salary of these workers is Rs 8000.

Advertising: Initial advertising will be Rs3000 a month decreasing to Rs1000 per month by 2015 Other Expenses: Interest Payroll Taxes Supplies Miscellaneous Taxes

Initial Cash flows: Owner Capital: Bank Loan: Yearly expenses: Interest Charges: Engineers Salary Workers salary Other Expenses Total Loan Repayment Grand Total Cash Inflow: Per day sale (Average) 4 2, 50,000 (Per annum) 50,000 * 12=6, 00,000 8000*3*12=2, 88,000 2, 50,000 13, 88,000 5, 00,000 18, 88,000 25, 00,000 25, 00,000

Per PC Charge (Average) 3000 Total 3000*4*25*12= 36, 00,000

Profit Remain: 36, 00,000-18, 88,000=1, 712, 000 In further years the profit will increase and for the development of business PE investors will be involved in Business. Break Even Point: Total outflow is: 18, 88,000 Yearly breakeven Point 18, 88,000/3000= 630(Approximate) Monthly units breakeven point 630/12=53 (Aprox.)