Business Plan for Java Development Firm
This business plan is for the creation of a new software service firm that will take advantage of the coming move to Java platforms throughout the corporate computing environment . The new company, FlamencoJD, will employ a team of software developers that specialize in creating custom Java applications for corporate environments. This plan outlines the market in the Midwest, the investment required, and the launch and operation strategy of a software services firm. Financial projections are included as well as an "exit strategy" for establishing a value for the venture after two years of growth.
In an exploding industry such as the Internet and now Enterprise Computing there are competing investment strategies. The "go for broke" investment in a major new player such as Netscape, or Marimba is a high stakes game that is best played by those who are positioned to see the advantage of an emerging product or technology. "Internet Positioning" is the concept of getting out in front of the technology wave by being a participant in an Internet business. For the principals this involves becoming immersed in the Industry. A passive "lurker" on the side lines will not see each new opportunity as it arises. By becoming a player in an Internet venture an investor is positioned to make informed decisions about future opportunities. This plan is for the creation of a service firm that will be positioned to take advantage of emerging technologies, particularly Java, to grow a thriving and profitable business in short order. Its greatest asset will be its position as the Java Integration expert in the Industrial Midwest. It will represent a major concentration of Java programming talent. FlamencoJD will be positioned to launch product development ventures as they are identified. Partnerships with the major Internet players (Sun, Netscape, SGI, etc) will be possible. Beyond the immediate ROI opportunities investing in this venture represents an opportunity to leverage FlamencoJD's position.
2. Executive Summery
Flamenco Java Development has been formed to address the corporate revolution in enterprise computing. The last decade has seen a move from proprietary mainframe hardware and network protocols to open systems. The vast power of open systems is best demonstrated by the Internet. Based on TCP/IP the Internet has allowed all computer and software platforms to communicate across a ubiquitous public network. It has doubled in size every 6 months for four years. During 1996 corporations have started to realize the benefits of adopting open network protocols (IP, SMTP, FTP, etc). 1997 will see an unprecedented surge away from legacy systems such as Novel, Lotus Notes, AS400, etc and towards Web Browser interfaces and Java delivery of applications.
The driving force in this move is going to be cost. The most recent Gartner Group study on corporate desktop computing shows that the cost per PC at most corporations exceeds $12,000/year. Open systems promise to offer a solution that can dramatically reduce this cost while increasing productivity.
The advantages of Java Computing are best summed up by Sun Microsystems in their white paper:
Sun's recommendation to all corporations involves 6 steps. The final stages of adopting this cost saving computing environment involves the creation of Java applications to migrate legacy tools to these open systems. Flamenco Java Development will be the leader in providing the support services to accomplish this conversion. Detroit is the ideal location to launch this service. Most Java activity is occurring in California today. The development "fever" is focused on new products and applications. In Detroit there will be demand for Java integration services brought on by tremendous hype in the technical press but no local resources to implement a Java strategy. FlamencoJD will be there.
This plan outlines the creation of a core team of Java Developers. This team of programmers will stay on top of an ever changing market by providing Java services for hire. Flamenco is entering the market in its earliest stages when margins are highest. These margins will allow Flamenco to quickly become a market leader in Open Systems Integration Services. Expansion to other markets during the first year are included in this plan.
The investment in this plan include $160,000 in seed funding and $140,000 in additional working capital. Breakeven is projected within the first 12 months. Return On Investment is projected at 40% the first year, although most profits will be used to fuel growth into these other markets. Twenty percent of the stock of Flamenco is available for investor ownership. An additional twenty percent will be made available in the second phase of financing. The second phase could represent an early exit strategy for the original investors because the valuation of the stock will be greatly increased at that stage.
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