Executive Summary

PC Repair will provide computer and technical consulting (repairs, training, networking and upgrade service) to local small businesses as well as home PC users. The company will focus on marketing, responsiveness, quality, and creating and retaining customer relations. PC Repair was initially formed as a sole proprietorship, but was reconfigured as an S Corporation in December of 2004. PC Repair will at first be a home office start-up, utilizing one studio room in the owner's home and serving customers in the local Ramsford-on-Bitstream area. In the third month of our plan, we will move into a leased office space and hire a second technician. As sales increase, we will hire additional personnel. The Market The very nature of the computing industry, with its extraordinary rate of technological development, creates a constant need for businesses skilled in updating and advising customers on computer-related issues. In town, the majority of potential customers are dissatisfied with existing options, creating an attractive niche for an innovative start-up. Small business PC users will provide the majority of our business revenue. Business Week expects the computing industry to grow at a rate of 12% and the processor speeds to continue to expand for years to come, providing a rich resource for sales. PC Repair has decided to focus mainly on the small business market, as these customers typically don't have a fulltime IT person, but have full-time IT needs. PC Repair will offer an affordable, on-demand service for these customers. We can also offer maintenance agreements that generate additional monthly income. For our residential customers, we will offer a very affordable and helpful service with a very flexible schedule to meet their needs. Our target market will focus on Ramsford-on-Bitstream and the surrounding areas. Market research indicates there is an abundance of business for a small company such as PC Repair. Start-up Funding and Financials To get PC Repair started the owner is providing cash and assets. We are also seeking a short-term loan, to be secured with the owner's home equity, and repaid within three years. Our conservative sales forecasts, based on industry research within the local area, project hefty sales in year one, steadily increasing through year three. To reach these goals, we will use an aggressive advertising campaign to exploit our competitors' weaknesses. With good cost control, we will see a modest, yet comfortable, net profit the first year, even after moving into a leased space and hiring additional technicians.

1.1 Objectives
1. To provide the best service available to the community at an affordable price. 2. To generate substantial market share so that PC Repair is a common name. 3. Constant growth in sales from start up through year three. 4. To generate customer satisfaction so that at least 40% of our customer base is repeat business.

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1.2 Mission
Our goal is to set the standard for on-site computer solutions through fast, on-site service and response. Our customers will always receive one-on-one personal attention at a very affordable price. Our customers will receive the highest quality of customer service available. Our employees will receive extensive training, a great place to work, fair pay and benefits, and incentives to use their own good judgement to solve customers' problems.

1.3 Keys to Success

Establishing a brand identity and generating brand recognition through marketing. Responsiveness: being an on-call computer paramedic with fast response time. Quality: getting the job done right the first time, offering 100% guarantee. Relationships: developing loyal repeat customers--retainers.

Company Summary
PC Repair is an S Corporation located in Ramsford-on-Bitstream, owned by Jack Hacker. With a small 3-year loan, PC Repair will grow in one year from a one-man, home-office based repair shop to a profitable, 3-person business in a leased location. We will build the necessary infrastructure to quickly and efficiently respond to customers' computer needs, guaranteeing speedy, friendly, competent, and cost-effective technical support.

2.1 Company Ownership

PC Repair was initially envisioned as a sole proprietorship in the owner's home. However, recent feedback from our marketing outreach has suggested a much higher sales potential than originally imagined, and PC Repair has been reformed as an S Corporation. This change will provide additional legal protection for the owner, and will also streamline the financial operations of the company as we expand the personnel to 5 within the next three years, lease a separate space for offices, and purchase company vehicles and cell phones. The owner, Jack Hacker, has 10 years of experience in the fields of technical support, networking, and computer training and repair. Jack has also spent the last three years as the manager of a custom computer building and repair store, and understands the computer needs of small businesses.

2.2 Start-up Summary

Total start-up expenses include initial expenses for establishing our website, setting up the business, and doing our pre-opening advertising. Exact allocations are shown in the table. The bulk of our start-up requirements are asset needs: we need diagnostic and repair equipment, half of which will be contributed to the business by the owner from his own materials. We are treating this equipment as assets because we expect it to last at least three years, and to have some resale value when we are through with it; we will buy additional expensed equipment in years two and three. We also need start-up inventory which includes RAM, spare hard drives, cables, and cases. Although we will keep expenses to a minimum for the first three months, before we move, we will also need cash at start-up, to see us through the next several months with a positive cash balance. We plan to fund our total start-up requirements direct owner investment (including the contributed assets), and a three-year loan secured with the owner's collateral (his home equity). We should be able to easily repay this loan within three years, even with a much lower sales revenue than projected. (See the Cash Flow table for projected repayment.)

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Start-up Requirements
Start-up Expenses Legal Website Business Cards Insurance Uniforms CPA Advertisement Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements $28,000 $1,200 $10,000 $0 $39,200 $42,225 $650 $350 $100 $150 $300 $275 $1,200 $3,025

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Start-up Funding
Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Owner Investor Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding $23,000 $0 $0 $23,000 ($3,025) $19,975 $39,200 $42,225 $19,225 $0 $0 $0 $19,225 $11,200 $28,000 $0 $28,000 $39,200 $3,025 $39,200 $42,225

Services
PC Repair will offer computer repairs, training, networking and upgrade service to clients in two major categories: home PC users and small business users. As PC Repair and the client demands grow, we will offer software development to our business clients. From the very first day, we will offer on-site repair and consulting services, so that our clients don't need to take time out of their busy days to haul a computer in to our workshop. We will offer limited software support (installation and compatibility issues), and focus on hardware and networking support - this is a vital distinction, since software is evolving much more rapidly than hardware, and our clients will have such diverse software needs that we couldn't possibly keep up with all of them. We will encourage clients to register their software and use the software's own support options to their full potential. We will, however, keep up to date with multiple operating systems and networking developments, working with clients to make sure they have the most appropriate combinations of hardware, OS, networking, backup systems, and software. Backup and security are becoming higher priorities for all our potential customers, as internet usage (and its pitfalls) becomes more common, and as more and more daily records are stored electronically.

Market Analysis Summary

PC Repair will provide computer support in both a consulting and technical capacity to small business owners as well as home PC users. Since PC Repair is currently a one man operation, its growth in the first three months will be limited by the owner's capacity to complete work. However, these first three months are critical for establishing our credibility and a reputation for getting the job done quickly and well. We will focus on delivering excellent service, and using the good word of mouth from this initial period to network with other potential clients. Personal market research by the owner indicates an attractive market niche for our services, of which PC Repair will take full advantage. The very nature of the computing industry, with its extraordinary rate of technological development, creates a constant need for businesses skilled in updating and advising customers on computer-related issues.

Competition and Buying Patterns

Customers choose computer repair and assistance services based on reputation, previous experience, and price. They may choose to return to a mediocre provider with whom they're familiar, rather than try out a new unknown company about whom they've heard nothing. Large stores, especially the service departments of national chains, have a great advantage simply in their affiliation with an established brand. Establishing our brand identity and a great reputation in the first few months is critical to our success. Once we have broken in to the local market, our great service will turn new clients into permanent clients. Our services will be second to no one and our prices will be very reasonable for the high quality service we offer. By providing superior service, word of mouth alone will bring in many new clients. The satisfaction our consumers find will keep them coming back. There are two main competitors for the computer upgrade and repair business in this area:

5.2 Marketing Strategy

Our marketing strategy will aggressively exploit our competitors' weaknesses. During the start-up phase, we will run large ads in the business section of the local newspaper, asking, "Are you fed up with poor customer service for your computer needs?" These ads will focus on our advantages, including on-site service, competitive rates, and quick response and turn-around times. They will announce our opening date, and include a coupon for free diagnostic service for the first 20 customers. We will follow up on these opening ads with a smaller direct-marketing campaign to small business owners, with lists drawn from the local Chamber of Commerce. Jack will use his contacts with business customers from his years as a manager to create a "buzz" about this new business. We will continue periodic advertisements, including several promotions (discounts, free diagnosis, etc.) throughout the first year. We expect a small but steady response from home PC users who see our ads elsewhere, but will also run monthly ads in sections other than the business one. We will offer a promotion during the first 90 days of business to generate business traffic and word of mouth. Our promo is Spyware removal on any desktop PC for $70 including tax and software. Spyware is a huge problem for a lot of residential and small business customers, and the offer should draw a lot of interest.

5.3 Sales Strategy

Our marketing strategy will generate customer inquiries. We will close the deals by offering an outstanding service and a very reasonable price. Happy customers generate repeat business and word of mouth. Our toll free number is operational 24 hours a day, seven days a week, and from 8am to 9pm, I will be available to answer calls. At other times, or when I am on the phone, an answering service we have hired will catch callers and give them an estimated wait time for a call-back; this is another step towards delivering a complete solution to our customers. Sales forecast figures are based on industry figures for the typical growth of a start-up and reflect repeat business generated through meeting customer needs.

5.3.1 Sales Forecast

The sales strategy is a prediction of controllable growth for the first year. PC Repair will focus on quality and attention to detail to avoid some potential pitfalls encountered by many new businesses. The predicted growth is moderate in the home PC market and in the small business arena. However, with aggressive advertising and word of mouth, this will increase. Our agressive TV advertising will increase our residential and small business customer base as well as word of mouth within the first year. Within a few months we will have the need for additional employees to handle the work load. At that time, we will move into a leased space with additional square footage, and buy a company vehicle to help with the on-site calls. Our competitors average 75+ calls a month. Given that our advertising will be aggressive, we expect the same results. The sales forecast is conservative, which gives us a chance to gauge our experience and adjust the plan accordingly.

Management Summary
PC Repair will be owned and managed by Jack Hacker. Jack has 10 years of experience in the fields of technical support, networking, and computer training and repair. Jack has also spent the last three years as the manager of a custom computer building and repair store, and understands the computer needs of small businesses. Jack is adept at managing his time, and at quickly responding to multiple customer calls and needs.

6.1 Personnel Plan

Jack Hacker will be the only employee for the first few months; his salary is directly related to the success of the business, and will never exceed 18% of sales revenue. In the third month, we will move to a leased office space and hire a second employee, with a third hire planned for August, if projections are on target. We plan to hire additional part-time employees in the second year, to better handle the increasing sales. Our employees will be skilled professionals, with equally strong technical and people skills. It is very important to Jack that they be paid salaries commensurate with their abilities and dedication- happy tech support people make for happy customers. To that end, our full-time employees will receive health benefits (premiums split between the employee and PC Repair), paid holidays, and sick time.

Financial Plan
The following sections include the annual estimates for the standard set of financial tables. Detailed monthly proforma tables are included in the appendix. Our financial plan calls for limited growth in the first three months, followed by much higher sales when we move and hire additional employees. These projections are based on sound market research and ratios for comparable businesses. As we grow, we will keep our operating expenses down, and maintain a positive cash balance as we repay our three-year loan.

7.1 Important Assumptions

PC Repair's customer base would fluctuate if there was a recess in the economy or other extenuating circumstances that pertain directly to consumer or industry behavior. However, given the steady increase in computer users despite the recent recession, we assume that sales forecasts are unlikely to be dramatically altered by economic events. The table below shows some of our other assumptions.

General Assumptions
Year 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 7.00% 10.00% 30.00% 0 Year 2 2 70.00% 10.00% 30.00% 0 Year 3 3 70.00% 10.00% 30.00% 0

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7.2 Break-even Analysis

Fixed costs are projected at a monthly average for the first year. This includes payroll, moving expenses and rent, purchase of a company vehicle, and other necessities like cell phones and the answering service. Variable costs (inventory used in repairing or servicing computers) are projected as well. At these levels, what we need to bring in per month to break even is shown in the table and chart below. We will reach our break-even point mid-year, although we expect sales in November and December to dip below this level because of holidays.

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Break-even Analysis
Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost $291.29 $70.00 $11,479 52 $15,110

7.3 Projected Profit and Loss

The table below shows our projected profit and loss. There are two lines for direct cost of sales - the second line shows projected inventory costs of fulfilling our maintenance contracts. The marketing/promotion line shows our planned advertising program expenses. Although these are aggressive, we must spend heavily in the first year in order to establish the brand recognition that will help us break in to the local market. This table also shows our projected expense increases as we hire more employees and move into a larger rented space. Before the move, the owner will absorb expenses related to utilities. In years two and three, we have budgeted for additional expensed equipment to expand our diagnostic and repair capabilities to keep up with orders. We are seeking a modest net profit in the first year. As our reputation grows, we will see higher revenues and net profit over the next three years.