1. Summary
Any production, from the production of diapers to the construction of spaceships, needs a certain set of services. Thus, our company operates in the most dynamic area – the service sector.
We plan to provide a wide range of services, such as:
- intermediary activity in the sale of consumer goods, electronic and other equipment, souvenirs;
- marketing and sale of products, goods and services of Russian and foreign companies;
- consulting activities and provision of consulting and information services;
- organization and holding of exhibitions, fairs, auctions;
- implementation of complex services related to the organization and operation of offices;
- organization of individual and group tourism in Russia and abroad, including business, student and school tourism.
However, the main area of our activity is the development, implementation and service of software, as well as the development and production of software and hardware based on new information technologies. This industry is young enough for the Russian market and therefore most companies experience a shortage of professional software. Most of the firms use low-quality discs and pirated programs. Therefore, the demand for this type of product is very high. JSC “Versada” is able to provide the necessary programs for the fruitful functioning of various companies.
2. Funds for the project
The development will require the latest equipment and technology. To provide the material and technical base, ZAO Versada takes a fedit in the amount of 300 thousand USD at 42% in the commercial innovation bank Alfa-Bank. This is to cover general operating costs, incidental costs, and various one-time start-up costs. To implement the project, we are renting a building near the Profsoyuznaya metro station. There is a block and an office. We have concluded contracts for the supply of information support for the production of programs. Our staff contains certified specialists in this field.
2.1. Description of the activity
Our main activity is the production and sale of software. This industry requires highly qualified personnel, knowledge of market needs and quality of work. The project will be carried out on recently developed equipment using newly released technologies. To obtain the necessary information, JSC “Versada” has numerous connections with Russian and foreign partners.
Before starting production activities, the company had to clarify the following questions:
- the current need for software and the size of this need;
- whether customers will use these products in production if they are readily available and have competitive prices;
- whether the client knows the benefits of using good quality products for their own business.
The results of the marketing research carried out by our company have confirmed that the current annual market demand is quite large. Some of the future consumers of this product have expressed direct approval of our production plans.
2.2. Product description
ZAO Versada produces programs and software and hardware. These products are essential for both companies and private users. The software includes various programs in the field of financial and accounting reporting, production planning, legal registration and any other areas. All programs are developed based on the needs of Russian clients, taking into account the peculiarities of the Russian market. At the same time, they are in no way inferior to Western counterparts in terms of the quality of performance. Materials for the production of our products are of high quality and reliability. By purchasing our programs you can be sure that they will meet the requirements of even the most biased client. The information base is updated as technology develops and does not lag behind technological progress.
Among the features of our products, I would like to highlight the following:
- high quality;
- compliance;
- use of the latest achievements of science and technology.
We believe that it may not be a novelty, but our products will remain on the market for a long time to come, since at the moment there are no companies in Moscow that use technical programs similar to ours.
3. Market analysis
Market research has shown that there is a need for a software manufacturer. The goal of Versada is to occupy this niche.
We understand that sales will not come by themselves and must be won. Large consumers will want to test the profitability of our products themselves. These trials can take anywhere from one to six months, depending on the purchasing policies of the respective customers. The main goal of the first year of production is to establish itself as a reliable supplier. Ultimately, we expect to become the main supplier for most, if not all, of the main consumers in this market.
Thanks to its extensive contacts in the business world, our firm already enjoys considerable popularity. Our products will interest the buyer more, since high-quality and “fresh” programs are not easy to find on the Russian market.
We expect to attract the buyer’s interest in the product by:
- direct links with major buyers;
- advertising through computer networks;
- high quality of our products, friendly atmosphere of treatment, openness;
- personal contacts of our employees.
The center of gravity is on increasing wholesales. The main consumers of our products are:
- large corporations in manufacturing, banking and other areas;
- medium and small firms;
- individual individuals;
- any customers wishing to purchase our products. Over the past few years, the market share of software and hardware has steadily increased. However, in our country, production is not yet able to cover the entire consumer market.
4. Competition
There are practically no companies on the market that are seriously involved in this kind of activity. Firms generally try to benefit from low costs by purchasing low quality materials. Therefore, their programs can not only improve but also worsen the work of clients. In our production we use only high quality materials, both domestic and Western. At the same time, it should be noted that the raw materials and materials necessary for the implementation of the project are purchased not from China or Taiwan, but from the world leaders of Western countries. Thus, ZAO Versada compares favorably with all companies operating on the market. Some competitiveness factors can be identified:
- quality;
- price level;
- design;
- exclusivity of goods;
- after-sales service;
- reputation of the company.
5. Marketing
Pre-sales have been a critical part of our preparatory work and have helped establish fairly broad relationships with major buyers in the region.
We will be able to serve both large and small clients. Programming is a big problem for many users, and our delivery will give us a comparative advantage in serving small but undeniably profitable customers.
We plan to distribute our products in small wholesale quantities. Clients will enter a cozy modern office and close deals on the spot. It provides for the development of special orders from regular customers in accordance with their needs.
Our product does not need wide advertising, but it is supposed to send several trial versions to large companies as advertising material. It is also necessary to advertise online and fax some companies. This will be enough to attract a large number of customers. The sales market in the future is expected to expand and move beyond Moscow and St. Petersburg. To do this, you need to send fax messages to companies in large cities and regions of the country.
Of the existing three main pricing goals that a company can choose from (based on sales, on profit, on the existing position), for our company, goals based on the existing position are preferable, since we are satisfied with the volume of sales, while the increase in relative profit is not justified by elasticity demand for the product. But we are interested in stability and maintaining a favorable climate for our activities.
The pricing strategy is focused on avoiding a downturn in production and minimizing the impact of external forces such as competitors and channel participants.
Of all the possible methods, we have chosen to establish a price based on the perceived value of the product, i.e. the main factor in pricing is not costs, but consumer perception. The widespread use of non-price methods of influence is also assumed.
6. Risk analysis
Due to the large number of our target market, ZAO Versada believes that the risks associated with the economic downturn are almost offset by the diversity of our consumer base.
Risks from fires, hurricanes, theft and other similar circumstances, including an earthquake, will be covered by regular insurance policies.
However, there may be risks associated with various sources of their occurrence.
Commercial risks:
- risk associated with the sale of goods;
- transport or transport risk;
- risk associated with the acceptance of the goods by the buyer. Political risks:
- the risk of strikes during the transport of the goods to the buyer.
Sources of risks:
- insufficient information about the demand for this product;
- insufficient market analysis;
- underestimation of your competitors;
- falling demand for this product.
These risks can be limited by rigorous checks on the financial position and reputation of the future wholesale customer. You can also at least partially shift the risks to other partners (for example, the risk of loss or damage to goods – to the insurance company). We will also insure our equipment for a year, paying 7% of its carrying value.
7. Organizational plan
The legal status of the company is a closed joint stock company. This form of ownership is easy to implement and convenient in structure. Closed joint-stock company “Versada” has an authorized capital of 7 thousand 600 USD. It is formed as a result of the investment of money by the sole founder. The company issues 100 ordinary registered shares worth 76 USD each. The owner of the shares is the founder.
By the form of ownership, the joint-stock company has a private form. The owner of ZAO Versada is the founder.
Organizational management chart
The general director deals with personnel, concludes contracts for the supply of products to organizations and institutions, attends exhibitions, conferences for the exchange of experience, is responsible for the supply of equipment in case of wear and tear, technical aging.
The commercial director ensures the regular supply of raw materials, conducts market research, and performs calculations related to changes in technology.
The accountant conducts all financial activities of the company (calculating and paying taxes, distributing profits, calculating and issuing salaries).
The senior programmer develops programs, software and hardware and controls their high-quality implementation. Under his supervision, there are three specialists in this field who implement the successful implementation of the project.
The technical manager meets with clients, negotiates the terms of future contracts, preparing a fertile ground for the work of a commercial director.
Company management:
General Director – Pavlova, Master of Economics.
Accountant – V. Smirnova, diploma of MIIT of accounting and audit.
Commercial Director – E. Putyatova, Doctor of Economics.
The employees of our company will be mainly young and energetic people aged 18 to 30 years. All employees have higher specialized education and are certified workers.
For us in a person are obligatory:
- cleanliness;
- discipline;
- good faith;
- decency;
- honesty.
8. Production technology
The production of software is a science-intensive industry, so the project will be carried out by specialists in this field. It is necessary to purchase expensive but high-precision software development equipment. The highest quality laser discs are also needed to bring our products to the customer.
Specialists of our company will develop programs in the laboratory using sophisticated technology. The senior programmer will select those that the market needs the most. Further, using the equipment of leading companies, the programs will be recorded on laser disks.
The database for updating programs is constantly updated with information from various sources. Therefore, our company constantly keeps up with technical progress and fully meets the needs of the market. It is possible to draw up special programs to meet the needs of regular and especially profitable customers.
The software will be sold in small wholesale lots through personal contracts with clients. This form is very convenient, since it does not require a special room for sales. Possibly in the future, ZAO Versada will organize its own retail sales through a network of branches. It is planned to expand the activities of the company throughout Russia, and in the future to master the markets of far and near abroad.
9. Financial plan
The project requires 300,000 USD. The source of these funds will be the commercial innovative bank Alfa-Bank, in which our current account is located, it will provide a loan in the amount of 300,000.00 USD at 42% per annum with repayment within a year (in equal monthly installments). The loan will be repaid according to the following scheme:
10. Costing
Table 1. Determination of items of expenditure per month
- Fixed costs
1) Rent.
It should be noted that under this agreement we are obliged to pay the amount of 3,000 USD. immediately, and later – 1 700,460 USD. monthly.
2) Wages to employees. General Director – 2,200 USD. Chief accountant – 2,000 USD. Commercial director – 2000 USD Manager – 1,000 USD
Senior programmer – 2000 USD
Specialists:
3 employees – 1,000 USD.
Driver – 900 USD.
Cleaning lady – 600 USD
TOTAL: 13,700 USD.
4) Deductions from wages.
For 1998 contributions were:
- to the pension fund – 28%;
- to the social insurance fund – 5.4%;
- to the compulsory health insurance fund – 3.6%;
- to the employment fund – 1.5%;
- for the needs of educational institutions – 1%;
- transport tax – 1%. TOTAL: 40.5%
40.5% of 13 700 USD. = RUB 55 485
7) Insurance premiums.
We have insured the equipment and will pay 7% of the book value per year, respectively, 7% of 150,000 USD is 10,500 USD, and 875 USD per month.
8) Depreciation deductions.
- depreciation of equipment is 10% of the book value of the equipment per year – 15,000.00 USD, and per month – 1837.5 USD;
- depreciation of the building 3.5% of the book value per year, i.e. 3.5% of RUB 630,000.00 = 22,050 USD, and 1837.5 USD per month;
- depreciation of transport is 8% of the book value per year, since the company has at its disposal 1 vehicle worth 30,000 USD, then 8% of 30,000 USD. = 2,400 USD, and 200 USD per month.
- Variable costs (calculated for the first month)
1) Raw material costs.
Assuming that with this equipment we will be able to produce 70 pieces. products, then in a month you get 2,100 pieces.
- Plastic box:
one empty plastic packaging from a direct manufacturer costs 5 USD, respectively, we need 2,100 pieces per month, which will cost 10,500 USD per month.
- Laser discs:
2100 empty disks will be required at a price of 30, 00 per piece per month, we will spend 63,000 USD.
2) VAT.
Value added tax is equal to 20%, and the taxable base is value gain, i.e. wages + depreciation charges + net profit (but since we are counting on the first month of the company’s activity, it should be noted that we will not have net profit, but in the future we will take this into account.) Therefore:
13700 + 1250 + 1837.5 + 0.2 = 16787.7
20% of 16787.7 = 3357.54, i.e. 3 357.54 USD.
3} Income tax.
Income tax is 35%, the taxable base is profit from the sale of products (works, services), excluding VAT, i.e. balance sheet profit. For the first month, revenue = 168,000 USD, costs = 164951.7 USD, i.e. balance sheet profit (loss in this month) = 164951.7 – 168000 = 3048.3.
10.2. Cost calculation for 1 piece. laser discs with software
Total costs = fixed costs + variable costs: 70451.7 + 97948.9 = 168400.6
168400.6 USD – this is the total cost of the entire volume of production for 1 month and since we intend to produce 2,100 pieces of laser discs with software, the cost of 1 piece. will be 70,190 USD.
- Determination of monthly revenue
We plan to sell laser disks with software from the warehouse in small wholesale lots at a price of 80 USD per 1 piece.
80.00 • 2100 = 168,000 USD.
- Calculation of the break-even point
The break-even point will allow you to determine when the project will cease to be unprofitable.
70451.7 + 153000
—————-
80 – 979489/2100 = 4857.6
It turned out that the value of the break-even point is 4857.6 pieces, that is, it is necessary to release 4,847 laser disks with software, and only after that the company will start making a profit.
How to make Business plan for software development enterprise https://t.co/cwLnQMm21B
— The City Telegraph (@city_telegraph) February 21, 2021
