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ʺOur Business is Your Successʺ
Techhelpers, Inc.
Business Plan
January 2010
Prepared by
Michael P. Sweeney, CEO/President
PO Box 80822 Billings, MT 59108‐0822 406‐850‐5177 [email protected] www.techhelpers.biz
TECHNOLOGY & COMPUTER CONSULTING
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I. Table of Contents
I. Table of Contents ................................................................................................... 2
II. Executive Summary............................................................................................... 3
III. Company Description ........................................................................................... 5
IV. Services and Pricing............................................................................................... 8
V. Marketing Plan ..................................................................................................... 12
VI. Market Research and Assumptions................................................................... 22
VII. Operational Plan .................................................................................................. 26
VIII. Management and Organization ......................................................................... 30
IX. Financial Plan ....................................................................................................... 31
X. Appendices ........................................................................................................... 35
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II. Executive Summary
Techhelpers provides technology and computer consulting services to lawyers, law firms and others members of the legal community in Billings Montana. Techhelpers specializes in providing “managed” technology services to support “core” technology systems such as the network, data protection and system administration.
The Traditional Technology Consulting Model Is Outdated and Inefficient
For most small to medium sized businesses, the traditional technology repair/consulting relationship is based upon technology providers reacting to clients’ problems and charging an hourly rate to resolve them. While most potential clients polled are generally satisfied with their current technology providers, they have low expectations of technology working correctly, expect regular problems and tolerate systems that don’t operate reliably or fully meet their needs.
Most technology providers are focused on the technology itself and are competent at solving problems as they arise. However, fewer are proactively preventing problems from occurring in the first place or helping their clients look at technology as a strategic part of their business that can dramatically improve productivity and profitability. For most small to medium business owners, technology is simply an expense to be avoided and one they don’t invest in unless there is a problem or they are forced to.
The Managed Services & Relationship Model Provides Real Value to Clients
Using a managed services model, Techhelpers provides value to clients by preventing problems from occurring in the first place. Business value is provided by proactively monitoring, maintaining and supporting their core technology infrastructure at a fixed and predictable cost.
Techhelpers’ first course of action with all clients is to stabilize their technology infrastructure. This means ensuring that all systems are optimally configured and secured and that data is properly managed and protected, and everything is working in a manner that supports the client’s business objectives. In addition to having a solid technology infrastructure for conducting their business, clients benefit from having a known cost to their technology infrastructure, which enables better budgeting and informed decision making about their technology investments.
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Cultivating Strong Relationships Is the Key to Client Success
Once a client’s infrastructure is stabilized, creditability is established as clients see improvements in the reliability and operation of their technology infrastructure and business operations. Techhelpers’ business model strongly emphasizes managing the client relationship to guide and encourage clients to make technology investments that improve their businesses.
Techhelpers’ Principal will meet with all managed service clients on a regular basis to periodically review their managed service performance and make sure that client expectations are being met and issues addressed. These meetings will also be critical to gaining knowledge about a client’s specific challenges and provide the venue for proposing improvements and solutions to help clients meet their ongoing business challenges.
Use Industry Expertise to Benefit Clients and Find New Growth Opportunities
The legal industry has many areas that are “vertical”, or unique to the industry, such as practice and case management automation, litigation and courtroom technology, technology forensics, financial and trust management, document and records management, transcription and paralegal services (just to name just a few!) The commercial off the shelf (COTS) software market for legal software is also well‐developed and mature and there are many software suites tailored specifically to the legal industry that Techhelpers can provide as an integrator. Over time, these opportunities can provide additional avenues for revenue and inclusion into the managed services offered by Techhelpers. For example, a records management solution for one client may be replicated and standardized for use by other clients and incorporated into a standardized offering.
Business and Client Success Come First, Technology Second
Techhelpers’ principal has over 15 years of experience helping people use technology to improve their businesses and their lives. He understands the significant role information technology plays in improving business processes and transactions and firmly believes technology is there to support the business, not the other way around. Mr. Sweeney’s commitment to focusing on providing services that have strong business value for clients and operating Techhelpers with a focus on building a profitable and sustainable business will help ensure the success of Techhelpers.
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III. Company Description
Techhelpers, Inc is an “S” corporation based in Billings, MT. It has a single Principal, Michael Sweeney, who will function as the CEO, President and sole employee of the corporation. Techhelpers has elected “S Corporation” status to eliminate double taxation and provide a layer of liability protection to the principal. Mr. Sweeney is the designated and responsible “S” party.
The concern of the company will be to provide computer and technology services to lawyers and law firms in the Billings, MT area. Techhelpers will provide these services through a “managed services” model with the goal of establishing stable and recurring sources of revenue for Techhelpers. Most of the actual technical work involved with providing the managed services will be performed by 3rd party providers. Techhelpers’ principal will perform the technical work of stabilizing a client but will be focused primarily on building the business relationships with clients and refining the operational model with the goal of delivering services efficiently and cost‐effectively in order to create revenue growth opportunities.
Techhelpers is expected to be operated part‐time for the first 12 months with an intentionally limited client base. The reason for this is Mr. Sweeney is expected to be engaged in other full‐time work. Mr. Sweeney expects to utilize the first 12 months to validate the business idea for Techhelpers, modify operational processes and deal with other unforeseen problems. Mr. Sweeney will also be actively looking for partnership or other alliance opportunities with other corporations, business owners and individuals to share the burden of operating and growing Techhelpers.
Company Goals and Objectives:
1. Techhelpers will be the recognized leader in providing managed technology services to legal firms and lawyers in the Billings area.
2. Techhelpers will be a profitable enterprise and provide a return on investment to its principal, shareholders and other investors.
3. Techhelpers will actively seek to establish a partnership or alliance with another business or individual to help grow Techhelpers and share the responsibilities of operating Techhelpers.
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Short term (1 year) – Validate the business model and operational assumptions and position the company to ably handle increased numbers of clients while maintaining high levels of service. Establish sound back‐office business operations for Techhelpers, including accounting, taxes and other functions. Expect first year client base to be under 10 clients with revenues less than $40K the first year. Establish partnership/alliances.
Mid‐term (2‐4 years) – Grow the client base, further refine the business model to focus on growing recurring revenue sources and gaining long‐term client commitments and reputation for excellent service. Expect client base to be 20‐50 with revenues to $500K per year and possibly 2 – 4 employees.
Long‐term (5+ years) Build Techhelpers to a level where the revenues provide a stable income for the owners with minimal day‐to‐day effort required. Consideration for selling the company or client base.
Mission Statement:
Techhelpers is the recognized leader in helping lawyers and law firms use technology to improve their business operations and legal practices.
“Our Business is Your Success”
Business Philosophy:
Techhelpers will focus on building relationships with clients and positioning itself to be their trusted partner for ongoing technology and business system improvement investments. Techhelpers’ solutions must have a business value and show clients a return on their investment and create long‐term recurring and stable revenues for Techhelpers.
As a business, Techhelpers will be a technology services company that is disciplined and deliberate in the business it engages in and the client base it serves. If it is not profitable or valuable, either financially or towards the goal of building client relationships, then Techhelpers won’t do it.
Strengths and Core Competencies:
Techhelpers’ strengths and core competencies will differentiate it from the competition in three ways:
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1. Focus on lawyers and legal industry. Mr. Sweeney understands the unique challenges and issues that this group contends with. This specialization is expected to open the door to potential clients who may not otherwise be inclined to consider a new technology provider.
2. Focus on proactive and preventive measures and stabilization. Prevent problems from occurring in the first place and let clients focus on their business, not their technology problems. Being successful here will open the door to clients looking at doing more with technology and create more opportunities for Techhelpers to serve them and generate new revenues.
3. Focus on the business value of technology. Propose solutions that are based on sound business reasoning and can be justified through a valid business case. Ideas and actions that save money, improve business are hard to say no to. An established relationship built on trust and outstanding service will help make clients more inclined to consider and follow‐through on proposals.
I believe that my focus on these three areas will set Techhelpers apart from the typical computer consulting firm. I will also focus on “high‐value” clients, clients that understand the benefits of investing in technology and their businesses.
Michael Sweeney’s qualifications and skills
Mr. Sweeney has an ability to communicate in a manner that establishes trust and understanding. He has 5 years of hands‐on experience providing consulting and technology services to lawyers and law firms in the Billings area during the 1990’s. Michael listens to his customers and clients and has a genuine desire to understand their issues and help them be successful. Michael also keenly understands the significant role information technology plays in improving business processes and transactions and can quickly assess competing priorities and develop creative and reliable solutions while communicating clearly and effectively with his clients.
Michael has a proven track record of successfully project managing large scale information technology and business automation projects that have generated increased revenue and efficiency for his clients. He has a track record of establishing proactive monitoring and maintenance systems that eliminate unscheduled down‐time, increase user productivity and maximize the technology investments of his clients.
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IV. Services and Pricing
SERVICES PROVIDED:
Techhelpers core services are Stabilize, Manage and Improve.
1. STABILIZE:
To stabilize, or stabilization means all of the efforts necessary to establish managed IT services for a client.
Stabilization services include correcting problems, refreshing or replacing hardware and software and taking other actions necessary to ensure client systems are working optimally.
In most situations, I expect stabilization costs to be fixed price projects consisting of professional services plus the cost of any additional hardware or software needed to stabilize a client’s infrastructure. This phase of the engagement will also typically define the exact services to be provided through a Letter of Engagement.
2. MANAGE:
Techhelpers will operate primarily as a Managed Services Provider (MSP), meaning it will assume responsibility for providing a defined set of IT services to clients. Initial managed services provided will include Monitoring, Management, System Security, Data Protection and Backup of desktop, server and network infrastructures.
Monitoring – Monitoring means measuring key performance metrics and system health so that Techhelpers will be informed about and able to proactively address most issues before they become apparent or have an impact on the client.
Management and System Security – Management means the actual proactive maintenance, patching and security (anti‐virus, spam and system intrusion) services that are performed.
Data Protection and Backup means keeping client data secure and available for restoration in case of loss or damage.
Most of the managed services will be provided remotely through the Internet or via telephone, with on‐site service provided by Techhelpers staff on an “as‐needed” basis.
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Techhelpers will utilize two “3rd‐party” providers to perform the actual managed services on behalf of Techhelpers. The delivery of these services will be “transparent” to Techhelpers’ clients and will be branded and labeled as Techhelpers. In addition, these services are on‐demand to Techhelpers, meaning that as Techhelpers gains clients or removes them, Techhelpers only pays for what it uses. There are no minimum commitments or contracts that Techhelpers is required to maintain.
Two Levels of Managed Services
Fully Managed:
The client does not own any of the technology infrastructures. Clients pay for only what they use and the infrastructure is completely provided and managed by Techhelpers. This is the ideal model as it provides Techhelpers complete control and better integration of the various components of a client’s infrastructure. It also enables repackaging and replication of a solution to other clients with minimal customization.
Partially Managed:
This is how I expect most clients to start out as most will have an existing investment in IT infrastructure that can be utilized. The client retains ownership of some of the entire infrastructure. Techhelpers will manage the performance of the existing infrastructure and creates replacement/upgrade schedules where client’s buy and retain ownership of the necessary infrastructure or move toward Fully Managed as their existing infrastructure is upgraded.
3. IMPROVE:
After a client is stabilized and their technology is being managed effectively, the monthly meeting with clients will provide a venue for building a relationship where Techhelpers can help clients find improvements to their business, processes and procedures through automation and deployment of proven IT solutions used in the legal industry.
It is important to note that Techhelpers will be focused on providing services and not generating revenue or margins through the sales of computer equipment and software. Hardware and software offerings will be in support of the managed services offerings
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or incidental to the services provided by Techhelpers. Techhelpers has partnered with ResllersOnly.com to obtain hardware and software at below retail pricing. I expect Techhelpers to charge no more than 5% its cost for hardware and software
Other Professional Services Performed:
Techhelpers also provides as‐needed technology consulting, repair and troubleshooting at hourly rates or negotiated project‐based or fixed rates. In the long‐term I expect much of this type of work to be automation or integration work for lawyers and legal firms, part of the “improve” explained above. An example would be installing or upgrading a case management system to work with an existing calendaring or billing system.
In the short‐term I expect to perform as‐needed work for a variety of different clients, not just the target clientele. Most of this type of work will be obtained through www.OnForce.com (OnForce). OnForce provides a platform for buyers (typically 3rd party technical support companies) looking for providers in the Billings area to perform various types of services to their clients here, ranging from government, businesses and end user residential clients. Techhelpers is registered to be a technical service provider on On‐Force.com and bids on work as it becomes available.
As Techhelpers grows I expect most of the as‐needed work Techhelpers performs to be acquired through the managed services clientele and to be in direct support of building the managed services client base. Eventually, Techhelpers will not pursue or will turn‐away or sub‐contract work that is not associated with a managed services client or potential client.
PRICING, BILLING AND TERM COMMITMENTS
Pricing:
Techhelpers will charge $100 per hour to perform tasks outside the standard the managed service offerings. I expect to negotiate fixed prices on a project‐by‐project basis for work performed outside the standard managed services offerings. For work acquired through OnForce, Techhelpers’ published rate is also $100 per hour with .55 cents a mile mileage charged for work outside a 60 mile round‐trip radius of Billings, although most work is actually done on a fixed price basis based (but not necessarily adhering to) upon these rates. Due to the competition and commodity nature of most of the OnForce work, I expect to actually charge about $50 per hour for OnForce work.
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Stabilization and Managed Services pricing will be established on an individual basis depending on the services provided, number of nodes (The number of computers, servers and network devices) and any hardware and software required to stabilize. Managed Service Plan pricing will follow these guidelines:
$250 per managed server per month
$150 per managed router/network device per month
$125 per managed workstation per month.
Billing:
I expect Techhelpers to bill managed service clients monthly in advance at net 30 terms. As‐needed work will be billed upon completion with net 30 terms. Work acquired through OnForce billing is managed through the OnForce platform and is typically paid within 24‐48 hours of completion and acceptance by an OnForce buyer. Payments are EFT directly to Techhelpers’ bank account.
I have setup accounting, billing and invoicing through Quicken Home & Business 2010 under the direction of a CPA. Exact operating procedures will be developed over time and should be adequate for near term needs for accounting, tax and billing management and reconciliation. Mr. Sweeney is expected to perform these functions, with oversight and direction provided by his CPA.
Letter of Engagement and Term Commitments:
All clients will be required to sign a letter of engagement. The letter of engagement is common in the professional services industry and is for both the client and Techhelpers’ benefits. The letter of engagement simply defines the services to be provided by Techhelpers and other pertinent terms of the engagement.
Term commitments are agreements whereby clients agree to have Techhelpers provide Managed Services over a period of time, usually from 1 to 3 years. Term Commitments will be encouraged but not required, except for clients opting for Fully Managed Services where there may be a capital investment cost to recover. Term Commitments will also be useful for clients who wish to minimize the up front stabilization costs and roll the cost of stabilization into the monthly Managed Service fee. Penalties and prorated payoff schedules will be established and included in the Term Commitment to account for clients who may terminate commitments early.
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V. Marketing Plan
Goals
The goals of the marketing plan outlined in this section are:
1. Gain new clients.
2. Position Techhelpers as the technology service provider firm of choice for lawyers and law firms in Billings.
3. Increase retention and revenue from existing clients.
This marketing plan is based upon informal polling, research and analysis conducted by Mr. Sweeney and his historical knowledge of the IT and legal industries in Billings.
Customers According to the Montana Bar Association, as of October 2009 there are 513 Active Attorney Members and 24 Active Paralegals in Billings and Laurel. According to DexKnows.com there are 580 businesses listed as lawyers or law firms in Billings and the surrounding region. Yellowpages.com has 789 lawyers and law firms listed. The target clientele of Techhelpers will be small to mid‐size firms and lawyers in private practice, not large government or corporate firms that may have internal IT entities or relationships with large regional or national IT consulting firms.
Competition According to DexKnows.com there are 31 businesses listed as computer consulting firms in Billings and surrounding area. Yellowpages.com has 43 firms listed. No firms were found to be specializing or marketing specifically to law firms. However, they may be individuals who are providing this type of service unadvertised or through word of mouth. Informal polling and research indicates a wide variety of technology firms and individuals serving the legal market but with no distinct market leader.
Niche Techhelpers will focus on providing managed technology services to lawyers and law firms. While there are plenty of technology providers serving the overall market in Billings, the legal industry is currently underserved by providers who specialize in the legal industry. Additionally, most providers are operating in a reactive and inefficient mode. A provider who can succeed in serving this market proactively and show value
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to the business can expect to have a large potential client base that is highly educated, affluent, and easily identified and marketed to. Additionally, law firms and other legal professionals generally bill and operate on hourly basis and have incentives for investing in quality technology solutions that help them operate more efficiently and generate more revenue.
Assumptions Section VI. Market Research and Assumptions has more detailed information about the market and assumptions.
Marketing Strategy and Approach
Techhelpers will emphasize to potential clients the business value and benefits of taking a proactive approach to managing their IT infrastructure and maintaining it at a fixed, known cost.
“Free Initial Consultation” may be used to encourage potential clients to contact Techhelpers.
Discounts may be provided for existing clients who make referrals.
Techhelpers will build awareness through industry participation such as American Bar Association associate membership, industry conferences, luncheons and workshops and word of mouth recognition in the legal community.
Advertising Mediums
• Word of mouth, cold‐calling and referrals to potential clients.
• Print advertising in the Billings Times newspaper.
• Direct mail post cards and introductory brochures.
• Vehicle branding and logoed uniforms.
Techhelpers’ Website (www.techhelpers.biz) will serve as the detailed information source that the above approaches will reference. The website will also be registered with search engines and business listing/location services on Google, Yahoo and other sites at free or nominal costs.
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Print Advertising Details:
Because the target client is very specific, I expect to be very specific in choosing where to place print advertising. Many lawyers, paralegals and law firms still rely upon printed media to review published legal announcements, notices and cases filed. Placing smaller print ads (1” x 2”) that are located next to or near these would be a logical first marketing effort. Print ads will direct customers to call or visit www.techhhelpers.biz for more information.
The Billings Times newspaper. This newspaper is the primary print source lawyers and legal firms in Yellowstone County use to publish in and read for notices, announcements and case filings. Nearly every lawyer and law firm in Billings subscribes to it. There are few (1‐3) other advertisers and no other technology providers currently advertising in this paper. Rates are $12 per week.
Billings Outpost ‐ $12 per week for 1”x2”. Small legal announcements section and business services section. Does it reach the target audience?
Billings Gazette ‐ $100 per month and up. Largest circulation paper but does it reach the target audience and can effectiveness measured?
Montana Lawyer Magazine: Sent to all members of the Montana Bar Association, including every lawyer in the State of Montana, most paralegals and other related entities. Rates start at $40 an issue for a small classified ad. Statewide target
Estimate an initial $100 per month budget with 2 hours per week for entire print marketing budget.
Internet Presence and Search Engine Optimization
I am considering using Search Engine Optimization (SEO) and key word searches through Google and Yahoo that focus specifically on Techhelpers’ niche area. Because there is currently no competition directly marketing in this niche, keyword cost will probably be relatively inexpensive. I do not expect to invest much time or money in SEO advertising.
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Word of Mouth Advertising
The legal community in Billings is close‐knit and relies heavily on a word‐of‐mouth basis. Potential discounts or incentives can be offered for clients who refer new business.
Industry Association and Participation
Membership and active participation in the American Bar Association, Montana Bar Association and Yellowstone Area Bar Association will provide opportunities for networking with potential clients. Participation will also enable insight on current issues and challenges to the industry. Possible sponsorship of informational seminars regarding technology and the legal industry.
American Bar Association associate membership $175 per year
Montana Bar Association – No membership to non‐attorneys. Useful source for statewide law events and issues. Sign up for newsletters.
Yellowstone Area Bar Association – No membership to non‐attorneys but potential to sign up for newsletters and participate in quarterly luncheons.
“Cold‐Calling” Advertising
As leads are developed, I will telephone or visit offices of potential clients.
Direct Mail Advertising
Targeted mailings (postcards and brochures) may be used, depending on the effectiveness of the above methods.
Monthly Meetings and Email Newsletter
As stated in Section IV of this document, a major part of Techhelpers’ services will be regular monthly meetings with clients and the focus on building relationships with clients.
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Newsletter and monthly reports: Along with monthly reports and billings, a newsletter can be sent via email to interested clients that features discount opportunities, news, tips and other information related to the legal industry. There are many automated tools and sources that can be utilized to put quality information together with minimal effort and cost.
Budget and Effort Needed
I expect the entire marketing and advertising budget to be around $200 a month in fixed, recurring costs with hours of effort starting at 10‐20 per month and trending down over time as the client base increases.
FEATURES AND BENEFITS
The following section describes the benefits of Techhelpers services as they would be described to potential clients. Techhelpers’ website (www.techhelpers.biz) will be the primary source for potential clients to find information about the company and the services provided. The following section will be used as the basis for the actual advertising and marketing verbiage.
BENEFITS
Benefits of using Techhelpers Managed Services – Techhelpers proactively safeguards your IT infrastructure by continuously monitoring the network, servers and workstations to catch problems before you are affected. The result is systems that work the way they should with no disruption to your business and no down‐time.
These services are also provided at a stable and known cost, so you can budget and predict your IT expenses in advance and better plan your business expenses.
Once your systems are stabilized and running optimally, both you AND Techhelpers can focus on your business and look for improvement instead of putting out fires and constantly dealing with preventable problems. Techhelpers specializes in lawyers, law firms and the legal industry so we know your business and the challenges you face.
We’re not here to just fix and prevent problems, are goal is to be a partner in your business and to work with you over time to find solutions that improve
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how your firm conducts business and helps you get the most out of your technology investments.
FEATURES
Stabilization Services
Stabilization services will ensure your IT infrastructure is operating to a level that will support managed services. Typically, these services will be bid as a fixed price project, including necessary hardware and software. Whether or not you decide to continue with a managed services plan, your system will be operating optimally and correctly after stabilization.
Managed Services
Below is a list of some of the most common tasks Techhelpers performs as part of our managed services offerings. Most of these tasks are what we call “utility” tasks, in essence they are needed to “keep the lights on” and occur in the background and are transparent to you. Most large corporations have IT Departments that perform many of these functions because they prevent problems and help the business focus on the business. Using managed services, Techhelpers will be your IT Department.
Exact services provided will depend on your environment and would be defined through a letter of engagement during the stabilization phase. Typically, services consist of:
Workstation Services
Remote systems administration
Performance troubleshooting
Business application administration
Setup monitoring and scheduled scripts/tasks
Asset management / reporting
Temporary file clean‐up
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Disk defragmentation, Scandisk
Microsoft updates / patch management
Performance optimization
Event log monitoring and alerting
Troubleshoot Windows error logs
Detect Disk and disk controller errors
Troubleshoot printing issues
Identify resource issues
Logs review and exclusion management
Security definition management
Monitoring operating system health and statistics
Downtime response and system reboot
Operating system troubleshooting, repair and patches
Schedule ʺScanDiskʺ to check hard drive for errors
Schedule ʺDefragʺ to defragment files
Schedule ʺDisk Cleanupʺ to delete unneeded files
Technical support to resolve the most common issues for workstations
Server Administration
Maintain mail servers (Sendmail, Qmail, IMAP, POP3, Postfix, Imail, Exchange)
Configure and support DNS servers
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Manage Web Servers (Apache, SAMBA, Tomcat, Caldera Open Linux eServer, IIS)
Support database servers (MySQL, PostgreSQL, Microsoft SQL server)
Monitoring operating system health and statistics
Downtime response and system reboot
Operating system troubleshooting, repair and patches
Schedule ʺScanDiskʺ and “Defrag” to check hard drive for errors
Schedule ʺDisk Cleanupʺ to delete unneeded files
Clean out files from temporary files directory
Patch Management
Schedule recurring system scan
Manual installation of application patches
Deploy Microsoft Service Packs
Technical support to resolve the most common issues for servers
Backup Systems Management
Install and configure backup software
Daily backup system maintenance
Backup restorations
Security Systems Management
Anti‐virus software management
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Anti‐virus scan and virus removal
Anti‐Spyware /Adware software management
Scheduled spyware scan and removal
Install and configure security software
Create, update and monitor security policy
Update virus and malware definitions
Improvement Services
“Our business is your success” is Techhelpers’ motto. Techhelpers staff will meet with you on a monthly basis to discuss issues that are important to your business and ensure that Techhelpers is meeting your expectations. We’ll listen to you and provide suggestions and feedback on what others in your industry are doing and look for “best practices” to guide proposed solutions.
Other Professional Services – Techhelpers also provides “as‐needed” support or assistance on an hourly or fixed‐price project basis.
Knowledgeable and Professional Help with Technology. Techhelpers understands the specific challenges you face in the legal field and provides solutions designed to improve your practice and help you achieve your business goals.
Fast, Competent and Complete Repairs. Techhelpers will quickly and correctly diagnose problems and repair your systems to get you working again. We service all major computer brands and technologies and we fix it right the first time. We also recommend proactive repairs to prevent problems from recurring.
24/7 Onsite Service. We come ʺonsiteʺ to your location with the flexibility of 24/7 scheduling to minimize downtime and disruption to your schedule.
Affordable Rates. Techhelpers offers competitive rates.
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Hardware/Software
Techhelpers is focused on providing services and not generating revenue or margins through the sales of computer equipment and software. We simply use the best products available based upon your needs and your particular situation. The products and suppliers we use are selected upon the basis of their quality, service, merits, reputation and prices. The technology industry is a buyer’s market and we won’t settle for second best for our clients.
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VI. Market Research and Assumptions
Billings is the recognized regional center for finance, law and medical services in all of Montana, as well as northern Wyoming and the eastern Dakotas. It has the largest population base (approx. 130,000 in Yellowstone County) in a 500 mile radius and the economy of Billings is still experiencing slight growth and is expected to experience continued growth through 2010.
The technology consulting industry overall is a growth industry and one that is constantly evolving. In Billings, there are approximately 30 stable technology service providers with no recognized market leader and no provider specialized in the legal industry. In addition, there is a constant flux of providers (approximately 20, typically sole‐proprietors and one person operations) circulating in and out of the market.
The majority of the marketing by technology providers in Billings that I have researched shows a focus on the “break and fix” model and generally targets a broad base of business and residential clients. In addition, much of the marketing appears “techie” or unprofessional. Based on my informal polls and history working in the Billings market, most providers are selected through word of mouth recommendations.
The legal industry in Billings is also a stable, if not growing, industry. It is knowledge based and provides an important and vital service to the community that shows no signs of diminishing.
While most potential clients polled are generally satisfied with their current technology providers, they have low expectations of technology working correctly, expect regular problems and tolerate systems that don’t operate reliably or fully meet their needs.
For this reason, I see a tremendous market in providing services that help clients proactively prevent problems from occurring in the first place and help clients to look at technology as a strategic part of their business that can dramatically improve productivity and profitability.
Trends:
In general, progressive technology providers are now moving away from the “break and fix” model to one where providers are better integrated with the business and can provide tangible improvements to the operations and profitability of the business. Many larger companies with internal IT organizations have long recognized this and
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have structured or created positions such as Chief Information Officers where the IT organization functions as part of the business and must justify and show a return on the company’s IT investment.
The managed service model will enable small to mid‐size businesses such as lawyers and smaller law firms to benefit from this kind of thinking about their technology investments too.
An increasing number of lawyers are entering the industry that have used the Internet and technology throughout their education. As they enter practice or move into positions of power at established firms they understand and appreciate the potential of information technology to make their work more efficient. Techhelpers will market and position itself to become their trusted partner in making technology investments for their firms and practices.
There are three key areas important to lawyers and law firms that Techhelpers will focus on:
Infrastructure Stabilization – This is where Techhelpers expects to start and show the most value to potential clients. Creating a strong and stable technology foundation enables clients to get past dealing with preventable problems and consider actions that can actually improve their operations and profitability.
Administration and Back‐Office Business – Accounting, payroll and back office functions involved in running the day‐to‐day operations of a law firm or practice. In general, running a law firm is like running most other small business. Automation and systems integration in these areas can save countless hours, improve efficiency and save money. There may also be possibilities for helping firms outsource or find other managed services providers for these areas of their business.
Law Practice Automation ‐ Automation of legal‐specific processes and services performed by lawyers and law firms. The market for legal industry specific software and automation systems is well‐developed and mature. As firms and lawyers get the above areas under control, clients will be in a good position to look at integration and automation solutions of the actual legal services they provide to their clients.
Pricing Hourly Consulting and Service Rate: $100 per hour – This is on the high side in Billings for IT consulting rates. My rationale for this rate is to net around $50 an hour
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after taxes and expenses. Techhelpers’ target clientele will be relatively affluent, educated and accustomed to affording higher rates in exchange for quality services that targets their industry and can exceed their expectations. I also expect to position and market Techhelpers services as “premium” and of higher quality than its competitors. This pricing strategy is common in the legal industry and should be familiar to most potential clients.
In practice I expect Techhelpers to provide most as‐needed services through flat rate projects and generate relatively little revenue through hourly rates. Managed Services will be the primary source of revenue generation for Techhelpers and the higher hourly rate will help encourage non‐committed clients to look at entering managed service agreements to avoid the high hourly expenses. Techhelpers would compromise short‐term project or hourly rates in order to secure long‐term managed service clients and the recurring revenue they generate.
Managed Service Rates:
$250 per server per month
$150 per router/network device per month
$125 per workstation per month.
See section IX. Financial Plans for a more detailed justification/analysis for pricing.
Hardware and Software Costs:
Hardware and software provided by Techhelpers will be in support of the managed services offerings or incidental to the services provided by Techhelpers. I expect to charge Techhelpers’ cost or a minimal overhead (< %5) to cover Techhelpers’ costs.
Proposed Location Techhelpers will not require a physical office or storefront. Most work will be conducted at the client’s premise. Remote management and overhead can be conducted from a home office or other location with an Internet connection.
Sales Forecast The sales forecast assumes part‐time levels (<20 hours per week) of effort to grow and maintain the core managed services business at the levels assumed below:
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Sales Forecast Assumptions:
The average managed service program (MSP) client consists of 1 server, 1 network and 3 workstations.
New MSP clients will be added at the rate of 1 every other month.
Stabilization will average $400 per client and will be one‐time only costs for clients.
Billable hours are expected to average 1 hour per month per MSP client. No billable hours are forecast for non‐MSP clients.
OnForce Billable hours are expected to average no more than 6 per month.
See section IX. Financial Plans for a more detailed justification/analysis for the sales forecast.
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VII. Operational Plan
Techhelpers will start operations with only one person and is expected to be operated part‐time. Most managed service activities will be provided by the 3rd party providers contracted by Techhelpers. Stabilization work is expected to occur mostly outside normal business hours and will be performed by Techhelpers.
Initially, day‐to‐day activities are estimated to be spent as follows:
Business overhead activities ‐ 10%
Marketing and prospecting for new clients ‐ 40%
Conducting on‐site visits with existing clients ‐ 15%
Performing as‐needed or “escalated” technical support activities for managed service clients, including stabilization work ‐ 15%
Performing other as‐needed technical activities for clients on project or hourly basis, including OnForce work ‐ 10%
Production Generally, on‐site and project work will be performed at customer’s location. Techhelpers will focus on clients in the immediate Billings (<30 miles) area.
Managed Services will be managed through internet‐based services provided by the 3rd party provider companies. In general, all aspects of the managed services, including administrative tasks such as billing, managing the number of systems, will be managed through these services. Notification of problem escalation will be through email or telephone, with actual technical work being performed remotely through the Internet application or on‐site when necessary.
At this point, there is no automation between the 3rd party providers and Techhelpers’ internal billing and customer relationship management systems. I expect the manual integration of these business functions to be adequate for the near term growth (1st year). I am currently evaluating solutions by Connectwise (www.connectwise.com ) to better integrate and automate these functions. Connectwise is the industry leader in providing integrated solutions for Managed Service Provider firms. I expect the threshold to justify and cover the expense of these integrations to be around 8‐10 clients.
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Legal Environment • Licensing and bonding requirements – There are no professional licensing
requirements. No bonding is needed initially either, however it is possible some clients or projects will require it. At this point it is expected that the targeted client base will not have specific licensing or bonding requirements. Expect to join the American Bar Association, Associate Membership, $175 annually.
• Permits – City of Billings Business License obtained 10/1/2009. Renew every year, $40.
• Health, workplace, or environmental regulations ‐ NA
• Special regulations covering your industry or profession ‐ NA
• Zoning or building code requirements ‐ NA
• Insurance coverage – Liability insurance has been discussed with both legal and insurance counsel. Liability insurance is expected to cost $3K‐$5K per year with high ($5000+) deductibles. At this point, because Techhelpers will only be operated by a single person and have no employees, Techhelpers will forgo liability insurance coverage. Structuring Techhelpers as a corporation provides a layer of liability protection to the Principal. Liability and other insurance will be obtained if employees are hired. Since Techhelpers will be using 3rd parties to provide the actual managed services to its clients, there are questions regarding these providers’ liability to Techhelpers. In general, the services will be governed by the license agreements between Techhelpers and the providers and are worded to generally protect the providers from liability beyond their direct costs/fees to Techhelpers. To minimize risk I have selected vendors with large customer bases and solid histories providing managed services. The most important service provided, data backup and protection, is actively verified and tested on a regular basis by the providers as a function of the services they provide and will be further verified or augmented by Techhelpers as necessary.
• Trademarks, copyrights, or patents (pending, existing, or purchased) – The motto “Our Business is Your Success” has been trademarked by Techhelpers in the State of Montana
Personnel • Number of employees ‐ 1
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• Type of labor (skilled, unskilled, and professional) ‐ Professional
• Where and how will you find the right employees? NA
• Pay structure – Assuming $250 per month per MSP client.
• For certain functions, will you use contract workers in addition to employees? – Yes, for day‐to‐day functions of the MSP, 3rd party providers will perform the actual technical work.
3rd Party Providers Key Providers:
Cloud Services Depot (CSD ‐ http://www.cloudservicesdepot.com/) will provide managed services to the server and workstation infrastructures. Cloud Services Depot provides default, or “Best Practices” monitoring and management for many popular software and hardware solutions. Techhelpers will likely start with default monitoring for all clients and then modify it according to the Letter of Engagement established for each client.
Virtual Administrator (VA ‐ http://www.virtualadministrator.com/index.aspx) will provide the managed services for the Network/Router infrastructure.
Connectwise (CW – http://www.connectwise.com) Provides integration tools and services for managed service provider companies such as Techhelpers.
All providers can perform the technical work of the other, although Connectwise is the only one that provides full service MSP integration. In addition, there are other providers in the industry that can be contracted on short‐notice.
Provider costs are expected to remain stable for the next year. If costs fluctuate, Techhelpers may adjust (up or down) it’s pricing accordingly to maintain current margins.
Credit Policies • Do you plan to sell on credit? No. I expect MSP services billing and payment
terms to be established in the Letter of Engagement and Term Commitment Agreement. In general, payment for MSP services will be billed/paid in advance of the service being provided, on a monthly or quarterly basis. As‐needed hourly or project work will be billed as they are provided on Net 30 terms, with
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1.5% month aging, which is standard for the professional services industry. OnForce work is billed and paid through the OnForce platform and is generally reconciled within 48 hours of completion with funds being EFT to Techhelpers.
Policy for dealing with slow‐paying customers:
• When do you make a phone call? After 30 days
• When do you send a letter? After 60 days
• When do you get your attorney to threaten? After 90 days
Managing Accounts Payable
In general, the MSP providers Techhelpers is using charge in advance for their services. I expect Techhelpers to also bill its MSP accounts receivable in advance. I do not expect to “float” the costs of any MSP services for more than 30 days. Techhelpers will use a credit card to pay for these services, so that there is some room to float the costs before cash is needed.
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VIII. Management and Organization
Michael Sweeney is Techhelpers principal and will manage and operate the business on a day‐to‐day basis and be Techhelpers’ sole employee. Michael has over 15 years of professional experience in the IT industry, including 5 years in the late 1990’s operating a consulting firm focusing on lawyers and law firms. Currently, there is no plan for continuity of operations if Michael is incapacitated or lost. Michael is exploring partnership and business relationship opportunities with other businesses and individuals in the area to address this.
Professional and Advisory Support List the following:
• CEO & President – Michael Sweeney
• Management advisory board ‐ NA
• Attorney – Kevin C. Sweeney
• Accountant – Al Anderson, CPA
• Insurance agent – Dawn Ruby, HUB Insurance
• Banker – Altana Federal Credit Union
• Mentors and key advisors – Jack Thomas, SCORE.
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IX. Financial Plan
Techhelpers is not requiring significant capital to startup and is being entirely funded through equity provided by Michael Sweeney. Since September 2009, the total financial equity provided by Mr. Sweeney has amounted to less than $1500 and Techhelpers is currently covering its costs.
The purpose of this section will be to provide sales and financial planning information to Mr. Sweeney, as well as gauge the hours of effort and financial return on his time and equity investments. The hours of effort calculations and projections are included on the 12‐month profit and loss projection.
The financial plans detailed here:
A. 12‐month profit and loss projection
B. 12‐month cash‐flow projection
C. 12‐month sales forecast
D. Hours of effort projection
A. 12-Month Profit and Loss Projection Assumptions:
My goal for Techhelpers is to achieve a gross hourly rate of $200+ per hour of actual effort through the managed services.
Acronyms Used: CSD=Cloud Services Depot, VA=Virtual Administrator
Server Node – $250 per month cost to client per server node
$106.15 cost per month per node to provide service through CSD
$143.85 net profit per server node per month
Workstation (Desktops and Laptops) Node ‐ $125 per month cost to client per workstation node
$22.15 per month cost per node to provide service through CSD
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$102.85 net profit per workstation node per month
Router/Firewall Node ‐ $150 per month cost to client per router/firewall node
$49.95 per month cost per node to provide service through VA
$100.05 net profit per Router/Firewall node per month.
SCENARIO: Average Office with 5 Workstations + 1 Server + 1 Router
5 Workstations = $625 total revenue – $110.75 direct cost = $514.25 net profit
1 Server = $250 total revenue ‐ $106.15 direct cost = $143.85 net profit
1 Router = $150 total revenue ‐ $49.95 direct cost = $100.05 net profit
$1025 per month total revenue, minus $266.85 direct costs.
$758.15 net profit per office
Expect approximately 9 hours of effort to initially support this office, broken down the following.
B. 12-Month Projected Cash Flow Assumptions:
To simplify planning and forecasting, the following assumptions are being made:
Cash is collected in the same month the sale is made.
Expenses are paid for the same month they are incurred.
Cost of 3rd party providers is paid the month the service is provided.
Irregular expenses, such as quarterly tax payments, maintenance and repairs are budgeted at an average monthly cost, not when the actual expense is due.
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Techhelpers does not expect to make any ownerʹs withdrawals and instead expects to treat and pay the owner as an employee as indicated on the projection.
C. Sales Forecast The sales forecast assumes part‐time levels (<20 hours per week) of effort to grow and maintain the core managed technology services business.
Sales Forecast Assumptions:
The average managed service program (MSP) client consists of 1 server, 1 network and 3 workstations.
New MSP clients will be added at the rate of 1 every other month.
Stabilization revenues will average $400 per client and will be one‐time only costs for clients.
Billable hours are expected to average 1 hour per month per MSP client. No billable hours are forecast for non‐MSP clients.
OnForce Billable hours are expected to average no more than 6 per month.
D. Hours of Effort Projection General Assumptions:
Assume 20 hours effort of stabilization per new client
Assume 9 hours effort per managed client Jan‐Mar
Assume 7 hours effort per managed client Apr‐Jun
Assume 5 hours effort per managed client Jul‐Sep
Assume 3 hours effort per managed client Oct‐Dec
Assume 1 hour of effort per $100 of hourly revenue (except OnForce)
Assume 1 hour of effort per $50 of OnForce revenue
Assume 20 hours of effort overhead (non‐billable) per month (marketing, accounting, etc. 5 hours a week, 1 hour per day). Expect time spent to switch
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from marketing to other activities over time but to generally stay at about 20 hours per month.
Managed Service Hours of Effort Details
3 hours on‐site for improvement/customer relationship.
2 hours per month on‐site for included service work/response. This should eventually be zero assuming improvements to processes and procedures.
4 hours per month working with 3rd party providers to resolve issues and provide the managed service. This should eventually be about 1 hour per office per month.
9 hours per month of effort would result in a gross hourly rate of $84.23 per hour of effort. As the model is refined I would expect to reduce this over time to about 3 hours per month. 3 hours per month would result in a gross hourly rate of $252.72 per hour of effort.
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X. Appendices
A. 12‐month profit and loss projection
B. 12‐month cash‐flow projection
C. 12‐month sales forecast
D. Hours of effort projection
E. Michael Sweeney’s Resume
