ACCOUNTING MANAGEMENT SYSTEMS
2584 Chesswick Ave., Ste. 3
Calgary, Alberta, Canada G3J1K9
October 14, 1992
Accounting Management Systems provides consulting services to assist small- and medium-sized businesses in choosing and implementing microcomputer accounting systems. This plan reviews current markets, competition, and the skills and equipment needed to successfully build a business of this kind.
- EXECUTIVE SUMMARY
- COMPANY DESCRIPTION
- PRODUCTS AND SERVICES
- MARKET ANALYSIS
- MARKETING AND SALES ACTIVITIES
- OPERATIONS
- MANAGEMENT AND OWNERSHIP
- FUNDS USED AND THEIR USES
- FINANCIAL DATA: HISTORICAL
Executive Summary
The Purpose of the Plan
This document outlines a proposed microcomputer consulting service and will help in identifying requirements for starting and operating the business outlined here. In order to do this, the report will review the market or markets that might exist, determine what competition exists in those markets and identify the skills and equipment needed. Financial performance is projected and funding requirements are considered.
The information contained in this report will serve two main purposes: to determine the viability of the proposed business and to measure its ongoing operations.
The Company
Market Needs to Be Met
Accounting Management Systems (AMS) will provide consulting services to small and medium sized businesses to assist in selecting and implementing available microcomputer accounting systems.
Many smaller and medium-sized businesses today need to implement or upgrade their accounting and business reporting systems. These businesses seldom have the necessary skills available to meet these needs in a successful or timely fashion. They simply want a solution that will meet their needs, works when it is supposed to, and is cost effective to implement.
Competitive Advantages
Accounting Management Systems will offer four and a half years of experience in the selecting and implementation of off-the-shelf micro-computer accounting programs. Other specific advantages include:
- Experience with proven microcomputer equipment and software.
- An existing network of contacts among resellers and other consultants.
- Formal training and practical experience in business management and operations.
- Polished communications skills.
- Low overhead costs.
Competitive Weaknesses
As a start-up, Accounting Management Systems will be faced with a number disadvantages:
- Dependent on one person.
- Will not possess all specialized skills required in every situation.
- The lack of formal offices for meetings.
- The lack of a professional image.
Products and Services
Accounting Management Systems will provide consulting services to small and medium-sized businesses that wish to implement or upgrade microcomputer-based accounting systems using off-the-shelf programs. These systems will vary from a single computer to small computer networks at several sites linked via telecommunications equipment.
A typical engagement would include some combination of the following services:
- A thorough needs analysis.
- An objective assessment of the wide variety of accounting software available, and how each one meets the needs determined, with a recommendation and alternatives.
- Accurate documentation of existing procedures. Application of these procedures to the selected new system and documentation of the new procedures.
- Installation and configuration of the selected programs and required hard ware.
- Training of staff in the use of the new systems.
- Ongoing support for the new programs.
These services will be billed at an hourly rate between $40 and $70. The rate charged will depend on the size of each engagement, anticipated future activity with the client and the opportunity to develop or acquire new skills during the engagement.
Market Analysis
Target Market Characteristics
A typical business that might hire Accounting Management Systems is expected to be:
- Smaller in size, up to $5 million or 100 employee.
- Local or regional in scope.
- In the service, retail, wholesale or light manufacturing sectors.
Target Market Size
The vast majority of businesses in Canada are small, as defined above. Approximately 6,700 businesses in Calgary in 1991 met all of these characteristics. That many exist outside Calgary in the southern Alberta area, for a total of about 13,500. At least 10% of that number begin as new businesses each year.
Marketing and Sales Activities
Marketing Strategy
Marketing activities will initially concentrate on networking in the following areas:
- Computer dealers.
- Accounting software vendors.
- Other consultants.
- Accountants and other personal service professionals.
- Participation in trade shows and industry seminars.
- Referrals from past or existing clients.
- Participation in electronic forums dedicated to the target market and to consulting.
Media advertising does not appear to offer any significant return at this point. Possible marketing opportunities include:
- Direct mailings.
- Cooperative advertising with computer dealers and accounting software vendors.
- Direct participation in seminars and trade shows in partnership with dealers or vendors.
- Paper and electronic bulletin board postings.
Sales Strategy
An initial meeting with prospective clients will be performed at no charge. This meeting will confirm the existence of needs for change. The prospective client must come away from the meeting with some trust or confidence in the consultant and his ability to implement a solution to the client's needs.
Operations
Accounting Management Systems will operate from a home office for much of its first year. Necessary equipment, including a phone, answering machine, fax capability, file storage and computer equipment will be kept in that office.
Most of the actual consulting services and meetings with clients will be performed at the client's place of business. Some configuration of equipment and software and the writing of proposals and documentation will be performed in the home office.
All significant engagements will be initiated with an informal meeting where the prospective client's needs are discussed and confirmed to exist. This first meeting will be followed by a written proposal and a contractual engagement letter to be signed by the client before further work is performed.
Records of existing systems and procedures, alternatives and recommendations, hardware and software purchases and configurations will be kept. Records of the billable time spent on each engagement will also be kept.
Meetings with the client staff will be held at important points during each engagement to ensure that everyone involved is aware of the progress and the work that remains to be done. In most engagements, it is expected that client staff will perform some of the configuration work.
Management and Ownership
Accounting Management Systems is organized as a sole proprietorship with Richard L. Sawinski as its owner, manager and only consultant.
Financial Data: Funds Required and Uses of Funds
The initial requirements for capital are between $10,000 and $12,000. Approximately half of this amount would be raised through debt financing, the rest would be met through cash flow. These funds will be used as follows:
- $5,000 to $6,000 for computer equipment.
- $2,500 to $3,000 for licensing agreements with several vendors.
- $2,000 for computer software purchases.
Marketing and Sales Activities
