Business Plan

Keller Graduate School of Management

8 / 2 6 / 2 0 1 5

Team C Kokomo Technology Consulting Services

Table of ContentsEXECUTIVE SUMMARY..............................................................................................................2

Company Overview................................................................................................................................2Mission statement..................................................................................................................................2Vision statement....................................................................................................................................3Strategies................................................................................................................................................3

INDUSTRIAL ANALYSIS.............................................................................................................3Industry Review......................................................................................................................................4Regulation Review.................................................................................................................................6Competitive Analysis.............................................................................................................................7SWOT Analysis.....................................................................................................................................12

MARKETING PLAN....................................................................................................................13Product/Service Concept....................................................................................................................13Target Market and Segmentation.......................................................................................................14Value Proposition.................................................................................................................................17Pricing Strategy....................................................................................................................................19Sales and Marketing Strategy.............................................................................................................20

OPERATIONS PLAN..................................................................................................................22Day-To-Day- Activities.........................................................................................................................23

Schedule.............................................................................................................................................23Business Operations (Processes)......................................................................................................24Diagram of the suggested working process.....................................................................................27Quality Control.....................................................................................................................................28Suppliers...............................................................................................................................................31Human Resources................................................................................................................................32Management Team...............................................................................................................................34Management Responsibilities.............................................................................................................36Organization Chart...............................................................................................................................39Management Team Gaps.....................................................................................................................39Technology, Facilities & Equipment Plan..........................................................................................40

Technology.........................................................................................................................................40Telecommunications...........................................................................................................................40Internal Network & Devices................................................................................................................41Peripherals.........................................................................................................................................43

Facilities/Location................................................................................................................................44Equipment.............................................................................................................................................46

FINANCIAL PLAN......................................................................................................................47Start-Up Funding..................................................................................................................................47Use of Funds........................................................................................................................................48Sales Forecast......................................................................................................................................49Cash Flow.............................................................................................................................................51Income Statement................................................................................................................................55Break-Even Analysis............................................................................................................................56Key Ratios.............................................................................................................................................56Five Years Valuation............................................................................................................................57Exit Strategy.........................................................................................................................................58

Bibliography..............................................................................................................................60

EXECUTIVE SUMMARY

Company Overview

Kokomo Technology Consulting Services (KTCS) will be a company providing IT consulting

services and solutions, focused on insuperable customer service and superior deliverables. The

plan is to get established and penetrate the growing market in Chicago IL region. We recognize

that the integration of technology products and services to the day-to-day activities for business

and individuals is not just a luxury but an unquestionable necessity, this reality represents an

opportunity for our firm to be a successful and, in consequence, a profitable company.

The firm has been conceived as a partnership owned and operated by Julius Chirieleison,

Michael Madrid, Jose Mora, Lomesh Patel, Sean Rooney, and Peter Scrivano. This group of

professionals with diverse backgrounds and areas of expertise is bringing together their skills

and aptitudes to build a team that will be recognized by its professionalism, quality and

customer service.

As mentioned, we will be situated in Chicago Illinois, our address will be 27 N Morgan St.,

Chicago, IL 60607, this location will be the headquarters for employees and repair center for

customers, providing us with an advantageous position near to two critical business areas: the

Illinois Medical District and the University Village; our primary strategy will be initially to target

hospitals, clinics, medical offices, universities and college students, offering a convenient and

cost-effective alternative for their IT needs, establishing long-term partner relationships with

them by delivering the best products and services. Once underway we will expand our scope

and area of influence, taking advantage of the reputation and brand recognition we aim to earn,

within five years we intend to be between the top three preferred IT consulting service

companies in Chicago.

Mission statement

To contribute to the success of our clients by providing the highest quality professional IT

services and solutions, enhancing their business processes and creating groundbreaking

solutions to their challenges.

Vision statement

Kokomo Technology Consulting Services will be known as a group of professionals working

together with enthusiasm, passion, pride, and commitment. This will make us one of the most

trusted and respected IT professional services firms in Chicago, recognized by our clients for

delivering excellence and exceeding expectations.

Strategies

We believe that markets always welcome highly qualified IT service providers to come in and

simplify their lives and processes regardless of their individual objectives, or what brand,

platform, or connectivity technologies they prefer, Kokomo technology will customize its services

to every customer needs. By partnering with small businesses to develop personalized solutions

we can ensure a mutual long-term success.

Kokomo Technology expects to earn a modest profit for the first three years based on projected

sales; this is due to the following factors:

- An average brand introduction period, where we require creating awareness in the local

market

- Initial equipment investment, this will be palliated as we got more customers for two to

three years; after two years we will begin investing in "new" equipment to replace

damaged or obsolete equipment

- Residual profits will be reinvested in expanding product and service line

We project first-year revenue of $318,253 and a 15% growth rate for the next two years. A direct

cost of sales is expected to average 36% of gross sales, including 10% for the purchase of

equipment. Net income is expected to reach $429,751 in year three as sales increase and

operations become more efficient.

We understand that no matter how successful we may be, there is a possibility that at some

point in time we could no longer want to continue operations due to unexpected changes in a

market or economic condition. If this occurs, after five years of service we consider two exit

strategies: the most desirable would be to merge with an existing competitor combining our

resources aiming to increase our presence in the market; the other option would be to turn our

operation over to another entity in an acquisition maneuver, protecting or recovering some cash

(and or stock) for our investors and partners.

INDUSTRIAL ANALYSIS

Industry Review

Consulting firms, in general, are among the leading employers of top MBA graduates, it is

typically a high paying, high profile field, which offers the prospect to take on a significant

degree of accountability right out of school, and also provides the opportunity to learn about the

business world. Consultants must be highly educated and skilled, excelling at conducting

research and analyzing information. To research, experts must collect raw data from a range of

sources from the client and various trade associations in the customer's industry. Also,

consultants must look at surveys and market studies from their prior engagements or practicing

interviews to industry experts, executives, and even the company’s middle or lower level

employees to gather information and opinions. This data is then analyzed to help identify

behavior patterns, production bottlenecks, market engagements and other developments, trends

and conditions that could affect a client's business.

Professional consultants are mainly hired guides or advice-givers to individuals and corporations

that seize a wide variety of business difficulties and challenges and deliver solutions and results

for their clients. These problems consist of examining a new market, or could be as technically

perplexing as the design and coding of an enormous manufacturing control system. Consultants

could also change the track of the client's organization and strategy.

Specifically, IT Consulting industry includes firms that provide the following services to client

companies: writing, testing and supporting custom software; planning and designing integrated

hardware, software and communication infrastructure; and on-site management of computer

systems and data processing facilities, and this is exactly what our company will do, providing IT

Services from the highest quality. (Yucel, 2015)

Ultimately, a consultant’s primary goal and an objective is to improve the client's business by

producing and implementing changes based on the analysis of research conducted and the

needs of the enterprise. The difficulties or challenges are convincing the client to accept the

consulting firm’s recommendations. Success depends on reliable studies, excellent people skills

and the capability to organized an influential presentation and a going forward plan. A consulting

firm and a consultant must also cultivate the ability to handle failures should the client decide not

to move forward.

Regulation Review

The consulting firm will operate under the business name of Kokomo Technology Consulting

Company. The company will run and function in the city of Chicago, Illinois. The physical

address of the location is 27 N Morgan, Chicago, IL 60607.

Pursuant to Title 4 Article I. General License Requirements of the Municipal Code of Chicago,

all businesses must be licensed to operate in the City of Chicago. If a business license is not

obtained before operations commence, Kokomo Technology Consulting Company shall be fined

not less than $250 nor more than $500. Further, each day the violation continues a separate

and distinct offense will occur. Additionally, Kokomo Technology Consulting Company will be

immediately closed by the commissioner until the business license is obtained. ("Municipal

Code of Chicago")

To obtain a business license, an application needs to be submitted. Upon receiving the request,

the City of Chicago will review and submit the application for approval to the zoning compliance

with the Chicago Zoning Ordinance. Chicago Zoning Ordinance will then conduct an

investigation of the business applicants and inspect the company premises. The commissioner

conducting the investigation and inspection is authorized to interview candidates under oath and

examine the book and records of the firm. Failure to comply with any portion of the inquiry or the

investigation will result in a disapproval of a business license for Kokomo Technology

Consulting Company. Once the investigation and review are complete, the commissioner will

then transmit the application and reports to the Mayor’s office. The Mayor’s office will then

determine if the request and all controlling persons are in compliance with all the requirements

necessary for the license to be issued. The location of the business and the condition of the

premises must also be in compliance with all laws and provisions of state code. If all conditions

are met, the Mayor will issue a business license. If conditions are not met, the Mayor will

disapprove the application of the enterprise license and mail a letter to the applicants. Kokomo

Technology Consulting Company can then make a written request to the Mayor’s office for a

public hearing. ("Municipal Code of Chicago")

Competitive Analysis

Kokomo’s industry (IT consulting) is composed by firms that service companies by designing

and implementing information technology (IT) systems and software. Entering to the IT

consulting business is not too hard due to the low capital requirements; in consequence, the

majority of companies are small, non-employing and independent. Since 2010, there has been

an increase in demand for all-inclusive consulting services leading to mergers and acquisitions

between larger players. However smaller, specialized companies still continued to enter the

industry. (Yucel, 2015)

E-Business Consulting: The Internet is shifting the way companies conduct business, which also

changes the type of consulting, needed. The numerous traditional consulting firm are vulnerable

of becoming less relevant if their consultants do not acquire the different skills needed to keep

up with the demands of the changing trends.

Information technology consulting firms constitute one of the fastest-growing sectors of the

consulting world. IT consulting firms deliver recommendations and implementations based on

the research and needs of the client.

Global consulting industry revenues will be about $449 billion in 2015, according to Plunkett

Research estimates. This represents reasonable growth from $415 billion during the previous

year. (Plunkett)

After some research, some authors offered some more accurate data about the IT consulting

industry, for example:

Revenue: $377.4 Billion

Profit: $30.6 Billion

Annual Growth 2010 – 2015: 2.8%

Estimated Annual Growth 2015 – 2020: 3.2%

Earnings: $163.5 Billion

Number of Businesses: 431,982

Source: www.IBISworld.com

As we can see, it is a fast growing industry and a very profitable one also.

In the following chart we can observe how the IT industry is segmented, our company has

decided to focus on four areas: IT technical consulting services, IT computer and network

management services, IT support services, and Computer systems design, development, and

integration. The computer application design and development it is not discarded, but we will go

into in this area as we grow in the market.

Source: www.IBISworld.com

According to Forbes Magazine, the metrics on Professional Services for computer design and

related services are as follows:

Median Gross Margin: 61.0%

Median Net Margin: 7.2%

Median Debt/Equity Ratio: 2.1

Median Cash/Assets: 17.0%

Median Payroll as % of Sales: 24.7%

Median Return On Equity: 16.4%

Median Advertising as % of Sales: 1.2%

Additionally, the data shown is drawn from financial statements on nearly 300,000 companies,

most with under $10 million in annual revenue, and bucketed by four-digit North American

Industry Classification System codes. (Nelson, "Benchmark Breakdown: Key Metrics On 25

Industries")

However, what is driving the market? What are the key elements motivating this growing

industry? Here are some elements to consider:

- Private investment in computers and software: it embodies the expenditure by companies

on all information processing equipment and software. However, also the investment by

private individuals in computer hardware and software generates demand for

implementation assistance and technical support an IT Consultant.

- Corporate profit: there is a correlation between a company’s profit grows and the demand

for IT consulting services, because as the earnings rises a company can “take the risk” of

making large, long-term investments, encouraging them to hire IT consultants.

- Government consumption and investment: an important statistic says that the Federal

and state governments constitute almost one-fourth of demand for industry services.

Consequently, if there is a change in government investment the industry would be

affected. Positively or negatively.

- Demand from finance and insurance: even more important than the government,

financial services, and insurance companies are the largest market for IT services; such

industries handle large amounts of sensitive client and proprietary data. Accordingly,

these industries rely on IT consulting firms to determine the appropriate methods of data

storage and protection. (Yucel, 2015)

It is important to mention that even if there are still plenty of opportunities for small-scale IT

consultants like us; the industry employment growth is concentrated in larger firms. For that

reason, it will be crucial that we focus on providing a personalized and unbeatable service to

each customer or potential customer, it doesn’t matter the size or financial status; for us each

client must receive the best service possible.

In the following chart we can observe the six main segments of the IT consulting market for

2015, as we indicated previously, the government and financial services are the biggest, our

company definitely will try to acquire customers from those areas, but we have a particular

interest in healthcare business, as well as retail and manufacturing companies that also

represent a high percentage of the market.

Source: www.IBISworld.com

It is important to mention that there is a growing tendency that is expected to increase even

more from small and mid-size business that are embracing and promoting cloud services,

network-storage devices, hardware virtualization and other third-platform solution that we will

have as a target because the knowledge of our personnel in that matter and the greater share of

potential medium-sized clients that are outsourcing their IT duties consultants. (Yucel, 2015)

SWOT Analysis

Strengths: Customer demand is the greatest power of this consulting firm. Further, the specific

skills, capabilities, and other qualifications of our consultants and staff members gives our

organization a competitive advantage over competitors.

Weaknesses: Limited access to investment capital is a weakness of this firm. This limits the type

of marketing campaign the company can launch and could impact the overall customer base. A

healthy financial plan and stable budget will allow the firm to overcome this weakness.

Opportunities: Emerging markets and new technology present the biggest opportunities.

Further, our strong professional network enables us to tap into a growing client base. Continual

training, and engaging with a variety of vendors will keep this firm skill up to date.

Threats: Concentration risks pose the greatest threat. It is vital to obtain multiple clients in a

variety of industries. The danger lies in the possibility of a customer going out of business,

moving, retiring, etc. and having them as the sole client and source of income. Cyber security

remains an ongoing threat for all originations. A breach could result in a loss of data and

compromise customer integrity. The financial impacts of such a breach could be severe.

Continual training and education by all staff members is essential to overcoming this threat.

MARKETING PLAN

Product/Service Concept

In regardless of the increase in technology-based strategies around the world, Kokomo

Technology company is an IT company that aims at meeting the needs of people

technologically. The company will mainly provide top notch technology consultancy services

spanning a broad range of areas including IT strategy and governance, management

information systems, information security, systems integration, e-commerce, database

management, social media, documentation, system maintenance, network operations, and IT

training. The ability of the company to provide a wide variety of IT services under one roof will

be one of its key competitive advantages. To ensure optimal delivery of these services, the

company will have highly qualified technology professionals with expertise and experience in

diverse sectors. The competence of personnel is a core source of competitive advantage as far

as IT consulting is concerned.

Target Market and Segmentation

Geographically, our company will be located in the city with an aim of offering our services to all

people, especially from the city. Since we offer several services under the same roof, our

company will be 50m by 50m, which we believe will be useful enough to accommodate several

people with different needs from us. The greater metro area has grown about 1% since the 2010

census. This brings the total populations of portions of Illinois, southeast Wisconsin and

northwest Indiana a total of 9,554,598 (Hinz 2015). Given that we are the only technology

company offering multiple services under the same roof, we expect our growth rate to be about

population growth in the area and our marketing initiatives. The company will mainly target

medium-sized companies as well as middle- to high-income individuals in Chicago breaking

down the market into four segments: Individuals, family and home office businesses, small and

medium-sized businesses, educational and medical facilities, and government entities.

The technology consultancy business in Chicago is dominated by big names such as IBM, HP,

Deloitte, Ernest & Young, Unisys, and Xerox. These firms mainly target Fortune 500 and other

large companies, leaving a significant gap between individuals and medium-sized enterprises in

need of consultancy services in the area of technology. In Chicago, there are more than 5,000

midsize companies (Thomas, 2012). This is a clear indication that the market is huge given that

midsize company is adopting technology at an exceedingly fast pace. The viability of the market

is further compounded by the tens of thousands of individuals in need of technology services.

Psychographic segments: It will be a good company or every individual that values

technological services, as well as those people especially youngsters that love their needs to be

considered in the society.

Behavioral segmentation: We offer a number of services in our company, but our services will

not be limited to people away from town. We shall also offer home services once contacted, as

a way of ensuring we reach to as many people as possible. This is one way of winning people’s

trust on our services and we shall be committed to give the best services, even to the outsiders.

Below in table 1 we present some important demographic and economic data about the city of

Chicago:

Table 1. Chicago’s demographic and economic facts

Population 2013 (estimate) 2,718,782

Population 2010 2,695,598

Persons under 5 years 2010, percent 6.9%

Persons under 18 years 2010, percent 23.1%

Persons 65 years and over 2010, percent 10.3%

Companies established 2010 255,459

Source: (U.S. Census Bureau, 2015)

As illustrated by the table above, we offer several services in our company so as to

accommodate the needs of all people regardless of age, sex, or even income levels. Even

though the population growth differs with age, our main target is to ensure that none of the age

group is left behind by the growing technology, hence the desire to offer our services to all.

Kokomo will particularly target mid-sized companies operating in diverse sectors including

manufacturing, finance, education, healthcare, management consulting, agriculture, fashion,

retail, media, real estate, transportation, construction, publishing, and hospitality. These are

clients who seek to support their business strategy using IT. Focus will also be on first-time,

regular, and prospective clients. The company will, therefore, target a diverse clientele in terms

of Demographics. As part of the data collection and analysis a survey was conducted through

Survey monkey of 31 participants from Social media, email, and text messaging. The results are

available at this link https://www.surveymonkey.com/results/SM-K6RV86QY/. After analysis of

the data, we were able to determine the geographic location, target market, and marketing

strategies.

It is important to mention the information provided by some studies showing that in recent years,

the City of Chicago is one of the preferred metropolitan areas for mid-size growing companies to

set up or expand their operations and activities. The publication Chicago Growing identifies 57

growing companies setting new facilities in the area (including five headquarters). This can be

interpreted as opportunity, 57 mid-size companies representing fresh customers for IT

companies such as Kokomo Technologies (Chicago Growing, 2015). Therefore, we target at

least 200 clients daily, on all our services.

One reason that many firms seek outside help from an IT consultant is to enable them to

analyze customer buying patterns, tastes, and preferences closely so that they efficiently pitch

advertising and marketing campaigns to smaller and smaller target markets (Laudon 98). This

is why it is important for Kokomo to the make the same use of information systems in order to

hone in on as specific of a market as possible. As time goes by, Kokomo will use a strategy of

focused differentiation in order to develop new market niches for specialized services where a

business can compete in the target area better than competitors.

Value Proposition

The significance of a compelling value proposition in today’s rigorously competitive and dynamic

business environment cannot be overemphasized (Baines, Fill & Page, 2011). This is

particularly because a value proposition is the most crucial determinant of whether customers

will buy the product or not (Wilson & Gilligan, 2005). Kokomo seeks to deliver a wide variety of

technology services under one roof. A major shortcoming of the prevailing technology consulting

firms in Chicago, particularly those that target mid-sized companies, is that they specialize in a

few IT fields, often compelling clients to work with more than one IT services providers at the

same time. In the 21st century, consumers of IT services, especially businesses, increasingly

desire to shop for all their technology from one place. Kokomo, therefore, seeks to help mid-

sized businesses achieve this objective by being the number one source for all IT needs.

To capture the attention of our customers, we decided to come up with the best hook for all our

clients. Our customer will enjoy a free WI-FI within our company. Our trainees will also be

offered free, practical classes and weekend classes will be free. At the end of training, our group

will collaborate with other firms for job placement for our trainees.

Kokomo’s competitive advantage also stems from the fact that the company understands the

business perspective of its clients. It is worrying to note that most technology solutions providers

do not connect with their customers’ business aspects. In other words, they have a vague

understanding of how IT fits with the overall business strategy. Therefore, they primarily focus

on helping their clients achieve their technical objectives. In this regard, Kokomo will have

insight into its customers’ businesses at the strategic, tactic, and operational levels. The

company will particularly have functional experts (in fields such as finance, customer service,

marketing, human resources, and economics) that have a solid understanding of the drivers that

propel the business of its clients. Kokomo will, therefore, seek to implement IT solutions that

meet not only the technical but also the business objectives of its customers.

We also conducted 5 interviews with managers and business owners in the field. All of the

participants were directly involved in the IT services at their firm. We asked the following

questions:

1. What IT services does your firm currently use?

2. What IT services does your firm need now or in the near future?

3. How many people do you currently have in your IT department if any?

4. How much does your firm spend on IT services (including salaries) per year?

The participants were in both the private sector and public sector profit and not for profit

businesses. For Question number 2, 4 out of the 5 participants cited that their firm currently

uses some sort of security software and hardware for the protection of their company’s assets.

The range of money spent on IT services was $2,000 to $500,000 per year.

We carried out the behavioral observation in various IT companies in Chicago, and we noted

that their services are different from ours. In most of those companies, they only offered one or

two services, unlike our business that offers more than those under the same roof. Also, we

noted that they do not do deal with out-of-town services even if their customers request.

We also managed to carry out a focus group. We gathered ten people who were potential

customers. They all responded well to our questions. Three of them said that they had hard

tasks on moving from one company to another in search of different services, some of which

were not successful. They were happy that we could offer those services under the same roof

and were glad that their needs will be met quickly and efficiently without the struggle.

Pricing Strategy

Kokomo Technologies will face intense competition from several local and nationwide IT

services companies. We consider that companies such as Smart Technology Services, Inc.

(http://www.smartts.com/), Agility Computer Network Services (http://agilitynetworks.com/),

SWC Technology Partners (http://www.swc.com/), and the Geek Squad

(https://www.geeksquad.com/) service offered at the local Best Buy retail stores are our primary

competitors. Our advantages to prevail against those and other competitors are the excellence

provided every time and affordability, offering insuperable services at a lower cost.

Determining an appropriate pricing strategy can particularly be difficult when the product is

intangible. Ineffective pricing is a major mistake made by new entrepreneur consultants. This is

occasioned by factors such as limited knowledge of going rates since most consultants warily

guard their rates, lack of strong relationships with clients, and underestimation of operational

costs (Crane, 2006). A major point of consideration when it comes to setting rates for

consultancy is whether to charge per hour or project. Since clients tend to be skeptical about

first-time consultants, they are often comfortable with a per-hour arrangement. Kokomo will,

therefore, charge its services on a per-hour basis. As mentioned earlier, studying the

competition may be quite tricky since most consultants treat their fees as trade secrets.

Nonetheless, it is known that entry-level consultants charge an average of $175 per hour

(Crane, 2006). To offer a more competitive rate, and considering its first-time status, Kokomo

will charge $170 per hour. After a careful analysis, we noted that charging $170 per hour will be

fair to all our customers, and we shall be able to pay for our technicians as well as sparing a

profit for the company for future development. The competitiveness of Kokomo’s rates further

stems from the fact that the company offers more at a relatively cheap price. The competition

charge will ensure that we provide different services to different people, thereby making an extra

profit. This low-cost pricing strategy will be important for helping the company gain ground in the

highly competitive technology consulting business.

Sales and Marketing Strategy

A compelling marketing strategy will be significant in the engagement of customers. Kokomo will

position itself as the number one provider of affordable consulting services in all spheres of IT.

The marketing strategy of the company will, therefore, center on delivering this message. To

engage its clients, Kokomo will mainly rely on unconventional marketing techniques such as

direct marketing, Internet marketing, word-of-mouth marketing, trade shows, and media

advertisement. The choice of these methods is informed by their significantly lower costs

compared to conventional techniques such as billboards as well as television, radio, and print

advertising (Lamb, Hair & McDaniel, 2012; Burrow, 2009). It is also informed by the fact that

these techniques are increasingly overtaking conventional methods. Unconventional marketing

techniques will significantly reduce the company’s customer acquisition costs. Though television

advertising will be used, it will only be used to a limited extent. The breakdown of the marketing

budget for the first three years is as shown below.

Year 1 Year 2 Year 3

Internet marketing $10,000 12,000 15,000

Direct & email marketing $250 350 500

Trade shows $3,000 3,500 5,000

Referral marketing $1,000 1,500 3,000

In-store advertising $400 400 400

Television advertising $3,000 3,500 4,000

Total $17,650 21,250 27,900

OPERATIONS PLAN

Once established, Kokomo Technology will have the ultimate objective of providing

exceptional technology services (consulting, developing, installing, and maintaining IT

equipment and networks), with basis on simplicity, an outstanding customer service and

superb quality offered to the customers. Initially serving the market located in Chicago, IL

and the surrounding metropolitan area, we expect that due to current economic conditions in

this area and the technology integration (at home and business) our company will have a

great commercial and financial success and customers will be completely satisfied.

Its six founders will operate Kokomo Technology; all of them will have significant roles and

responsibilities within the company. The strength of this group is built on three fundamentals:

expertise, experience, and diversity. Our team members have strong backgrounds in the

following areas: information technology, marketing, finances, human resources, customer

service, project management, and business administration.

According to some authors, ninety percent of success comes from correctly executing the

fundamentals. Then planning, explaining, but moreover applying an operation plan detailing

how the business will be run is a determining factor for success. On this section of the

company plan, we will explain the day-to-day functions of the group, translating theories into

practice. (Abrams, 2014)

Day-To-Day- Activities

Schedule

Kokomo Technology will implement three different schedules for equal number of services:

onsite, outside, and tech support.

Onsite Service Hours: 7:00 am – 8:00 pm Monday to Friday, 8:00 am – 6:00 pm on Saturdays,

closed on Sundays.

Field Service Hours: 7:00 am – 10:00 pm Monday to Friday, 9:00 am – 4:00 pm Saturday and

Sunday.

Tech Support Service Hours: During the first year it will be the same as our onsite service

hours, after that period there will be an evaluation of the firm resources and the customer needs

to decide if an expansion of the service schedule is necessary.

It is important to mention that the service schedule is designed to fit both individual customers

and small or big companies’ needs. For example, customers with tight working schedules will

have the opportunity to pass by the office to drop off equipment for service prior or after their

working hours, or even if it is an outside job they can be present at home/office during the

weekend. We are flexible to meet their demands.

Business Operations (Processes)

Our goal is always to provide our customers with the best services for their technological needs,

for that reason our two project managers and the IT technician will provide onsite field service in

a rotational schedule, one element will stay onsite ant two will go to the field, but it depends of

the workload and company’s needs.

There will be three ways our customers can receive service:

a) Onsite, were customers will bring their equipment to the store

b) Field service, having one of our professional experts dispatched to the customer’s

desired location

c) Virtual support, were our technicians will fix any problem via internet

Kokomo technology is a firm providing exceptional IT services from initial contact marketing, to

our follow-up meetings, to ensure the client is so satisfied they will be referring future clients to

us. While our office will have a single location in Chicago we will have a network of

professionals to provide any client IT services at any time.

Initially, our account managers within our marketing department will determine the top candidate

clients we should pursue. Once a potential client is established our account manager and

project manager will meet face to face with the customer in person to discuss their particular

needs. The process to provide service will be following the next path:

1. Interview (in person or by phone) customer/ technician or filing an online form to determine

the client’s needs

2. The equipment/project will be evaluated

a) If onsite the equipment will be quickly evaluated to determine if the customer can wait or

leave the equipment for repair, if it is concluded that it will take some time the customer

will be informed the day and hour the equipment will be ready

b) If virtual our technician will request remote access to the customer’s equipment to

determine the severity of the problem. If he can resolved in the moment, he will request

payment from the customer and proceed to fix the issue. If it is a complicate problem the

technician will invite the customer to visit our office or to receive a visit

c) If a visit is required a technician will be dispatched with all the information about the

customer and the equipment. Once there, IT Technician will check the equipment,

discuss the repair alternatives, and communicate his findings and possible solutions to

the customer, as well as the fees that our firm will charge, if the customer agrees with the

fees he will be invited to pay for the service (small projects/services), a printed or emailed

receipt will be provided

3. For complicated/elaborated projects, evaluation of costs for the service will be explained to

the customer prior to proceed any further, if the customer agrees to the charges then he

pays and upfront 10% of total cost to services and due before start of project. Once the

specific needs of the client are determined the project manager will create a layout of the

project with the team

4. Log in our system the request to generate a work ticket that help us to identify each service

provided including all the client’s and its equipment information

5. For big projects, the project manager will then revisit the client with a layout and present any

visual representation necessary to show what the new technology product or services might

work or look like. Feedback from the client will allow the project manager to make any

adjustments in this meeting and take them back to the team

6. The equipment/project will be repaired/upgraded and/or replaced

a) For big projects, when 50% and 90% completed, the project manager will have a video

conference call to provide updates and ensure that the needs of the client are continuing

to be met. Also at the 50% stage the client will have paid another 40% of the project

cost, bringing the total paid at 50%. The final 50% will be paid upon project completion

7. Once the service is finished the Technician will update the work ticket status with his findings

and actions taken, as well as any important detail about the interaction with the customer,

the end of the service will be reached after the customer receives recommendations and

suggestions

8. The customer will be inquired to provide feedback about the service received; this will be

done in one of several ways: online, by email, on paper (onsite), or during a mandatory

phone conversation that our customer service manager will do 48 hours after service is

provided. This will be done to improve our quality providing services and to ensure customer

satisfaction

9. With each client there will be a final 30-day follow up meeting to ensure there is complete

satisfaction with the client. This follow up meeting is so important that according to Neil

Tortorella it costs up to 5 times as much to find a new client as it does to build a upon the

one you have, which is a big reason to have the follow up meeting (Tortorella 2012)

Diagram of the suggested working process

The company will keep expenses low by using a small team to implement the services for

customers. This will also help the company provide better value for the client. Smaller

companies have their sales teams closer to their engineering teams and provide an overall

better customer service (Mazzeo 2014). The CEO will also serve as a project manager and will

help build immediate trust and rapport with the initial meetings with the client. The Account

Managers will have the duty of pursuing and locating future customers. The CEO/Project

Manager will have a team of 2 engineers, and it is expected to hire one more by the third year of

operations, depending on the conditions. One of the engineers will serve as an assistant project

manager and lead operations when the project manager is not available.

1. First Contact Kokomo-Customer - Interview in person/phone/online customer-technician - Determine the customer’s needs

2. Equipment/Project Evaluation- Onsite: simple issue, customer waits; complicated leave the equipment- Virtual: remote access requested to identify the problem- Field visit: technician dispatched to discuss options and fees with customer

3. Costs/Fees Estimation- After evaluation costs and fees will be explained to customers- Big projects, customer will be asked to pay 10% of total cost upfront

4. Work Ticket Creation- All the information about the customer ant the equipment will be logged in our system to generate a work ticket

5. Project Manager 2nd Visit- During big projects, PM will revisit customer with a layout and present a dummy version- Feedback from the client will be received

6. Equipment/Project Repaired/Upgraded and/or

Replaced- Big projects updating conferences when 50% and 90% completed - Big projects require payment of 40% when 50% completed and the final 50% upon completion

7. Updating Work Ticket- Once completed, Technician will update the work ticket status with findings, actions taken, and important details

8. Service Evaluation- Customer will be asked to provide feedback about the service received:

Online EmailPaper (onsite) Phone

9. Follow-up Meeting/Call- After 30 days a meeting or phone call will be done to ensure customers’ complete satisfaction

The efficiency of operations will be conducted using Six Sigma practices to ensure that

customer satisfaction increases, process cycle time decreases and shows an increase in profits.

Our project managers will become certified with Six Sigma. This discipline is often used in the IT

industry and identifies this type of process as an efficient tool in the industry (Bandyopadhyay

2005). The organization will also have a team meeting after each project is completed to review

innovations in software design, overall successes, and opportunities in operations of the

previous client. Any new best practices will be instituted to the next client if they are deemed

universal and necessary to future customers’ needs.

This is our plan for growth. The account managers and our marketing team will the driving force

to ensure that we keep clients coming in. This is why nearly 50% of our employees will be a

part finding customers. The more clients we have we can justify hiring more IT professionals

and project managers to take on multiple clients at the same time. We expect at after five years

we will have established a notable brand where we will plan to hire additional IT, professionals.

Quality Control

As we all know, quality control is a critical function for any company, it is not the same

procedure in a manufacturing company as in a service company like Kokomo. A service

organization is labor intensive and has almost nothing tangible, so the quality control of

employee attitude and performance is pretty much the equivalent of product quality control for a

manufacturer. (Hostage, 2015)

Our organization depends on satisfactory impressions made on customers as a result of

services properly rendered, so for Kokomo Technology everything depends on quality control of

personnel. We have the compromise to provide a service with the highest quality possible. For

that reason, the qualifications and skills for all the candidates for an available position are

evaluated and closely analyzed before a hiring decision is made. Once a professional is

selected he will be continuously trained not only in his core competencies, but also in customer

service and administrative areas.

Our company policy in this matter at a managerial level will be that every member must attend a

management development session each year conducted or arranged by or HR department on a

wide variety of professional topics. For all personnel, we will have available written, highly

detailed statements of expected productivity and service level, so everyone knows exactly what

is expected of them to be successful. Such standards of performance help our employees to

understand the importance of their function to the organization and the company’s expectations

of them. (Hostage, 2015)

To certify that our customers are receiving the service they require and deserve, and once the

job is finished, we will ask them to complete a questionnaire in one of our computers evaluation

our services provided onsite. When virtual or offsite service is provided, once it is completed, we

will request our customers to visit our website and leave us feedback through an online

evaluation. Also, a questionnaire will be sent by email. Finally, as a follow-up our customer

service manager will call every client 48 hours after the service was provided to request some

feedback about the service.

Inventory Management is also an internal quality control measure absolutely necessary to

safeguard Kokomo’s assets, keeping track and accountability of our equipment on a daily basis

is a very important and sensitive part of our day to day operations; for that reason, all our

hardware and peripherals will be recorded and identified by a unique bar code, visibly and

permanently attached to each device and piece of equipment. Every day, before starting

operations and before leaving the facilities for the day, all the equipment will be inspected to

ensure they are working adequately and then will be inventoried. During the day, every time a

device will be used for field services, it will be annotated in the log book system including the

following information: work ticket number in which the equipment will be used, date and hour,

name and signature of the person who will be held responsible for it; once the field service is

finished the system will be updated to reflect the time and condition of the equipment. The Chief

Operations Officer will manage such log.

The inventory cycle can be better understood in the following figure:

Initial inspection: 6:50 am

(all the equipment)

Field Services: the responsible employee for

equipment will log it on the system

when leaving

Field Services: when it is finished,

employee will update the system

including: time and condition

Final inspection: 8:05 pm

(equipment providing field

service after 8 will be inventoried at

return )

Suppliers

We believe in creating strong relationships not only with our customers but also with our

suppliers. It is our goal to create an efficient suppliers network to get materials, products and

services of excellent quality and reasonable prices, by utilizing high quality products and

services at reduced costs Kokomo Technology can save financial resources that can be

translated into savings for the end customer and/or extra earning for the shareholders.

- Connectivity: the company selected is AT&T, a nationwide communications service

provider that we consider reliable, offering competitive prices, and sharing our same attitude

aiming for excellence. They offer a wide range of services that we will need to be able to

work with extreme efficiency, including: office and mobile internet connectivity, voice services

for office and mobile as well, and DNS and web hosting services between others.

More information can be found at: http://www.att.com/smallbusiness/content/shop.page

- Technological Devices: due to its success, innovation and technological advance there will

be two companies selected to supply our devices, Apple and HP. Our company will use

internally and also offer their products to the customers. Our main selection was Apple

because it is the preferred mark between the customers, however we understand that a

great portion of consumers prefer a different operating system and HP offers variety, quality

and good prices.

More information can be found at: http://www.hp.com/country/us/en/uc/welcome.html and

https://www.apple.com/.

- Office Equipment and Supplies: the business partner selected is Chicago Office Products

Co. (COPCO), it has all the equipment, furniture and supplies we need to run the office and

we have negotiated an agreement to offer each other services at a discounted rate.

More information available at: http://www.shopcopco.com/

- Janitorial Services: The firm will hire the services of the Jani-King International local

franchise. It is imperative to keep the office as clean as possible not only because the image

we want to show and maintain for our customers, but also because dust can damage

technical equipment, for us keeping a dust-free environment is a necessity.

More information available at: http://www.janiking.com/chicago/

Human Resources

The Director of HR will work with the marketing and project managers to help bring diversity and

talent to the team as needed. As noted in the commercialization plan services rendered will be

$170 per hour. The $170 per hour will help pay the salaries of our team: the project managers

will be on salary as will all of the founding members starting at $30,000 a year, to be hired IT

professionals will be at $ 20,000 annually as will the Account Managers. Total salary expense

will be $220,000 during the first year and topping out to $392,600 by an end of year 5. It is

important to mention that at the end of year three it will be a full revision of the financial

situation, to evaluate if it is possible to continue with the expected increase in salary levels or

adjustments will be necessary (See chart below). There will be two project managers that will

serve as the backup to one another during two simultaneous clients, vacations, personal time or

any other extenuating circumstances. Working directly under the project managers we will have

at least 2 IT professionals or engineers that can serve a variety of projects. These IT

professionals will need to be able to work from home and communicate via VOIP with the

project managers.

Table 3. Salary Pay Table Year 1 to Year 5

PROFESSIONAL YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Jose Mora 30,000 32,000 34,000 40,000 45,000

Peter Scrivano 30,000 32,000 34,000 40,000 45,000

Michael Madrid 30,000 32,000 34,000 40,000 45,000

Lomesh Patel 30,000 32,000 34,000 40,000 45,000

Sean Rooney 30,000 32,000 34,000 40,000 45,000

Julius Chirieleison 30,000 32,000 34,000 40,000 45,000

IT Technician 1 20,000 25,000 30,000 32,000 34,000

IT Technician 2 20,000 25,000 30,000

Account Manager 20,000 25,000 30,000 32,000 34,000

CPA 3,600 3,600 3,600 3,600

Secretary 18,000 20,000 21,000

Salary Totals 220,000 245,600 305,600 352,600 392,600

Each member is a qualified professional with vast experience, expertise, and different but

complementary skills in different areas that applied together will end in a substantial and unique

firm offering an excellent service to their customers.

Since our initial team in our first year will have fewer than 25 employees, we will enroll in the

Small Business Health Options Program marketplace. We will also immediately apply for a

Small Business Health Care Tax Credit will allow us to absorb 50% of the premium costs. The

SHOP Marketplace will provide our employees essential health benefits such as preventative

care, hospitalization, prescription drugs, dental, and vision.

Management Team

Jose Mora Chief Executive Officer, Project Manager, Founder

Jose has displayed his leadership roles in multiple managerial roles in areas such as

production, exports, imports and general management. Jose also served his country as an

Automated Logistical Specialist in the U.S. Army. Jose has also taken his disciplined approach

to leadership to earning several Master degrees in Business Administration, Project

Management and Human Resources Management in both the U.S. and in Puerto Rico.

Peter Scrivano Chief Technical Officer, Project Manager, Founder

Peter is a highly experienced IT Professional with more than 10 years of experience in various

IT roles including being a PC/LAN analyst and systems administrator. Peter holds numerous

certifications including: EMC Cloud Architect, EMC Information Storage Associate, VMmare

Certified Associate – Data Center Virtualization, Network +, Microsoft Certified Professional and

Desktop Support Technician. Peter holds a Bachelor from DeVry in Information Technology and

finishing his Information Systems Graduate Certificate with Keller Graduate School in 2015.

Michael Madrid Chief Marketing Officer, Account Manager, Founder

Michael is an experienced registered nurse, customer service and healthcare professional

working in both a clinical and operational capacity in numerous hospital departments and

healthcare organizations at many different capacities. His Clinical background includes case

management, utilization management in continuing care services, emergency medical services,

primary care services, telephone triage and screening utilizing Telephonic triage protocol,

nurse’s clinic services, telemetry, intensive care unit and critical care settings. Leadership

background includes charge nurse, team leader, and interim clinical supervisor in Emergency

Room setting also includes strategic team planning, project management, interdisciplinary

collaboration, fixed and professional development, performance improvement, theory-based and

evidence-based best practices, education design and effectiveness measurements,

reimbursement regulation, family centered care and Joint Commission Standards. He has a

Bachelor’s of Science (BSN) and a Master’s of Science in Nursing (MSN) and will be obtaining

his master’s in business administration (MBA) with a projected completion in 2015.

Lomesh Patel Chief Operations Officer, Customer Service Manager, Founder

Lomesh is a seasoned customer service and operations professional. With the United Parcel

Service he oversaw up to 50 individuals in day-to-day operations, resolved problems and

maintained countless client relationships. During his time at UPS, Lomesh earned increasing

levels of responsibility where he gave business strategy recommendations to upper

management. Lomesh has a BS in Technical Management from DeVry and currently pursuing

his MBA with Keller Graduate School.

Sean Rooney Chief Finance Officer, Founder

Sean is an internationally recognized volleyball player at the highest level. Playing in both the

2008 and 2012 Olympic Games, Sean brings a high level of inspiration, determination, and

success to the team. While on the sidelines of growing his skills in volleyball, Sean earned his

degree in Business Administration from Pepperdine in 2005, he acquired a strong knowledge in

finances and continues his higher education with Keller Graduate School of Management with

an expected graduation in 2015.

Julius Chirieleison Chief Human Resources Officer, Account Manager, Founder

Julius has over 10 years management experience in hiring, training and promoting people in a

variety fields mostly in the retail setting. Julius has experience in using performance-based

competencies to create succession planning to promote from within and managing personal

time off, W-4, I-9, EEOC, and other HR related compliance. Julius has spent 8 years with the

Vitamin Shoppe in roles of increasing responsibility, including Store Manager and Field Training

Manager. Before that Julius has worked in Business Development with the Gainesville Area

Chamber of Commerce and Synogen a private equity venture fund. Julius received his BA from

the University of Florida in 2006 and currently pursuing his MBA from Keller Graduate School of

Management.

Management Responsibilities

Chief Executive Officer – He will develop and implement all the high-level strategies and

policies from all the areas of the firm, having the final word in all the major decisions, setting

goals and evaluating the success of the company. He will act as the primary spokesperson of

the enterprise and will build alliances and partnerships with other organizations, searching and

winning new business or customers. Also, He will develop the company’s culture and vision, and

an organizational environment that promotes positive staff morale and performance, challenging

performance levels when necessary.

Chief Financial Officer – He will handle developing the financial well-being of the organization

by providing financial projections and accounting services, and preparing growth plans. He will

develop, monitor, and report financial activities and organizational strategies by forecasting

capital, facilities, and staff requirements; identifying monetary resources; developing action

plans.

Chief Marketing Officer – He will be in charge of direct and increase the firm’s market share by

planning and executing promotional plans, advertising, and visiting current and potential

customers. He will research and develop marketing opportunities and plans recommending

strategic plans, and will implement productivity, quality, and customer-service standards. He

also will identify marketing opportunities by categorizing consumer requirements; defining

market, competitor's share, and competitor's strengths and weaknesses; forecasting projected

business; establishing targeted market share.

Chief Technical Officer – He will be decisive in managing the company, more specifically in

overseeing the core operations: offering technology to our customers, he will lead and direct the

IT technicians and will provide onsite or field consultation. Additionally, he will maintain the

company’s internal technology infrastructure, and will handle keeping records of software

licenses.

IT Technician – They will coordinate with the Chief Technology Officer for the internal

information system requirements, compiling and presenting information as requested. They will

talk directly to clients and computer users to determine the nature of their problems,

investigating, diagnosing and solving such issues and giving them feedback and

recommendations. They will provide training to users and employees when it is required. Also,

they will write a report at the end of the day for all the work tickets performed. They will install

and configure computer hardware, software, systems, networks, printers, and scanners, etc., as

well as repair equipment and replace parts as directed and check computers and equipment for

electrical safety.

Chief Operations Officer – Will oversee the day-to-day operations of the firm. Developing

strategies for the company, and will maintain effective communication amongst the

management. He will help to define objectives and to make sure they are reached. He will

manage stocks of equipment, consumables and other supplies obtaining replacement or

specialist components, fixtures or fittings. Also, he will plan in advance the workload and

coordinate the scheduled maintenance. This position will also perform Chief Customer & Public

Affairs Officer duties, and then he will also attract potential customers by answering product and

service questions; suggesting information about other goods and services. He will resolve

product or service problems by clarifying the customer's complaint; determining the cause of the

problem; selecting and explaining the best solution to solve the problem; expediting correction

or adjustment; following up to ensure resolution. He will prepare product or service reports by

analyzing customer information and will make recommendations about potential products or

services to management. He will call customers 48 hours after service was provided to receive

feedback about the interaction with our technicians.

Chief Human Resources Officer – He will maintain the work structure by updating job

requirements and job descriptions for all positions. He will establish a recruiting, testing, and

interviewing program; counseling managers on candidate selection; conduct and analyze exit

interviews, and recommend changes. Also, he will prepare employees for assignments by

establishing and conducting orientation and training programs and maintaining professional and

technical knowledge by attending and programming educational workshops. He will support a

pay plan and employee benefits programs, and will ensure legal compliance. Finally, he will

maintain management guidelines by preparing, updating, and recommending human resource

policies and procedures and will maintain historical human resource records by designing a

filing and retrieval system; keeping the past and current records.

Note: All job descriptions were made based on material from the website Monster.com (see

bibliography)

Organization Chart

Management Team Gaps

Our firm recognizes that we need more expertise in the areas of finance and IT professionals.

To reduce expenses, we will conduct all of our finance analysis under the leadership of Sean

Rooney. However, we understand to ensure we have our financial statements in compliance

with the federal government we will plan to hire a Certified Professional Accountant by Year 2.

We will need to hire at least two more IT professionals. These IT professionals ideally will have

project management experience to be able to respond immediately to our clients IT services.

These IT professionals who have project management experience may allow us to undertake

multiple projects at the same time and thus increasing our revenue.

Jose MoraCEO / PM

Peter Scrivano

CTO / PM

IT Technician

Sea Rooney CFO

Michael Madrid

CMO / AM

Lomesh Patel

COO / CSM

Account Manager

AM

Julius Cirieleison

CHRO / AM

Lastly, we will need more personnel that are experienced in client building relationships and

marketing initiative. These people will have skills in promoting our services and sales. These

professionals will round out our management needs and ensure growth from Year 1 to Year 5.

Technology, Facilities & Equipment Plan

Due to the nature of our business (IT services providers) we decided to consolidate these three

areas of the plan in one single area.

Technology

As a result of budgetary restrictions we have determined that initially we will keep to the

minimum the hardware, software, communication technology and equipment necessary to

operate the business. But at the same time, we are compromised to maintain the highest level

of efficiency in our products and services. At our office location we will maintain enough

technological products (computers, tablets and other devices) for customers to interact with; this

would be the only tangible aspect of our service business.

When our technicians are on the field with customers they are representing our company, for

that reason, they will be equipped with the latest equipment, which will be updated regularly with

the major software and hardware products available.

Telecommunications

After analyzing several options we selected AT&T as our main provider, we will bundle the

following services:

- AT&T Switched Ethernet Service: provides a scalable solution that can increase the

number of service sites within a shared network. It offers a low-cost networking option for

multiple locations, allowing us to route, manage, and prioritize applications, plus it suits

bandwidth-intensive applications like Voice over IP, video streaming, and data storage.

- AT&T IP Flexible Reach Telephone Service: it is a managed Voice over IP

communication solution that supports inbound and outbound calling on your data network,

providing local, long distance, and international calling for U.S. sites

- AT&T Mobile 4G LTE Broadband: it is the most reliable network nationwide, we as users

can do more, transfer files, access e-mail, use network-connected apps, and surf the web

easily and efficiently.

More information at: https://www.att.com/partnerexchange/

Internal Network & Devices

Kokomo Technology’s main office will be equipped with the following elements:

- A WIFI and Ethernet combined network, this arrangement will offer connectivity, reliability,

mobility and velocity to our company and customers.

- A WatchGuard XTM 2050 Firewall Network Security Device will be an essential component

of our infrastructure, we need to be sure, and we have to guarantee our customers that the

valuable/sensitive information is safe and secure, this device is affordable and ease of use,

delivering unparalleled performance in network security. The XTM 2050 is a top of the line,

multi-gigabit threat management appliance that secures corporate Internet traffic against

hackers, malware, network attacks, intrusion attempts, data theft, and other cybercrime while

securely connecting offices, remote and virtual employees, and providing real-time and

historical visibility into security and user events. The hardware in the XTM 2050 is superior to

its competitors with dual, hot swap power supplies, hot swap fans, and swappable NICS and

hard drives.

More information at: http://www.watchguard.com/wgrd-products/ngfw/xtm-2050/overview

The point of sale system (POS) selected is the Shopkeep iPad POS system. It is equipped

with built-in credit card reader, locking cash drawer, and metal iPad stand. It integrates with a

number of powerful platforms to interact with customers and to manage all the business

activities including inventory control, also provides quick and quiet receipt printer, everything

with the mobility and style that an iPad provides.

More information at: http://www.shopkeep.com/

- The Network Storage device selected is a Western My Cloud DL2100. This equipment offers

local and cloud based storage to backup all network elements. It provides the reliability,

security, and scalability needed to drive small business success. By centralizing and

protecting critical business data from all the PC and Mac computers in our office, and with

secure remote and mobile access, we can get to it anytime, from anywhere to share files

with employees, partners and customers.

More information at: http://www.wdc.com/en/products/products.aspx?id=1440

- Six laptops (three HP Spectre x360 and three Apple MacBook), from those, four will be

mainly used to show customers about new products and services, for demos or their

entertainment at our office. One will be exclusively for management/ administrative activities

and the other one for network managing purposes.

More information at: http://store.hp.com/us/en/pdp/Laptops/hp-spectre-x360---13-4101dx-

(energy-star) and http://www.apple.com/shop/buy-mac/macbook/silver-256gb

- Four tablet devices (two Apple iPads and two Samsung Galaxy Tabs) will be available at our

main office. Such devices will be used by our customers (by themselves or assisted by our

staff), to get register and to select or order services. When conditions or workload allow, they

can be used in the waiting area while customers wait for services. Another two iPads will be

used for field operations by our technicians, for a total of six Tablets.

More information at: http://www.apple.com/ipad/ and

http://www.samsung.com/us/mobile/galaxy-tab/

- Three iPhone 6 Plus devices to stay in communication with IT technicians during field work.

More information at http://www.apple.com/iphone/

- A website is under development, for that reason the domain name kokomotech.com will be

secured to ensure our presence in the Internet. The web design will be outsourced to a local

web design company: orbit media solutions http://www.orbitmedia.com/, requiring direct

relationship with the major search engines and social networks, a home page, a catalog of

services page, and features for the customers such as service options, service request,

scheduling services, questions & answers area, feedback form, and “about us”.

Peripherals

- Two Samsung 4K UHD JU6500 Series Smart TV 55”

- One InFocus IN3126 Video Projector

- Three HP wireless printers all-in-one LaserJet Pro MFP M225dw.

- Two Bixolon-Samsung SPP- R400 Bluetooth Receipt Printer

More information at: http://www.samsung.com/us/video/tvs/UN55JU6500FXZA,

http://www.infocus.com/projectors/product?pn=IN3126,

http://store.hp.com/us/en/pdp/printers/hp-laserjet-pro-mfp-m225dw , and

http://www.bixolonusa.com/

Facilities/Location

Initially, the firm will have a single office established as a headquarters location for employees

(field and office technicians and administrative personnel) and also as a repair and customer

service center for clients. This office will have an available area of 850 square feet, situated in a

high traffic area located at 27 N Morgan, Chicago, IL 60607. This location was selected because

it is close to some strategic areas and easier to access from several routes. It is close to the

United Center, home of the local sports teams Bulls and Hawks; it is also near to the Illinois

Medical District as well as the University Village. The office will have a potential market formed

by the high number of hospitals, medical offices, universities, schools, students, and other

individuals frequenting the area. It is possible to verify this in the following images:

The firm was able to get a one year lease agreement for $23,700 per year with renewal options

for two or five additional years, according to such agreement the price could be increased by the

landlord after the initial period but the increase won’t exceed 10%.of the initial amount.

The office space will be designed to be a high-tech facility, making customers and employees

feel comfortable and relaxed. It will be necessary to include bright lights for a better visibility and

white walls to project cleanness. Equipment will be available for customers waiting for their

equipment or just to try out new innovations in technology.

Equipment

- Three workstations where technicians will repair customer’s computers, laptops or tablets;

each one will be equipped with a computer repair kit. The workstations can work as well as a

training or communication spot to support customers remotely.

- Two additional computer repair kits for field works

The rest of the equipment and furniture required for the onsite location will include:

4 Desks 5 Office telephones w. headset 25 Notepads

10 Office chairs 8 Surge protectors 200 Folders

6 Chairs for reception 2 Large garbage cans 500 Envelopes

12 Overhead lights 3 Recycle bins 500 Pens with our logo

8 File cabinets 12 Wastebaskets 50 Packs of post-its

2 Modems 3 Fire extinguisher 10 Staplers

4 Printer ink

cartridges2 Fireproof safe 20 Packs of staples

2 Whiteboards 6 Scissors20 Books of postage

stamps

3 First aid kit Cleaning supplies10 Boxes of printer/fax

paper

2,000 business cards (200 for each executive officer and Senior IT and 600 for the

office)

- Finally, two vehicles will be leased, a 2015 Chevrolet Express Cargo Van and a 2015

/Chevrolet Malibu.

More information at: http://www.chevrolet.com

FINANCIAL PLAN

Start-Up Funding

For every startup that succeeds, there are hundreds that run out of cash during the first year

causing the demise of the project (Tobak 2014). Kokomo Technology is in the position to

provide the first $100,000 of funding from the founders to help launch the company. The firm is

also seeking another $200,000 from investors to achieve the sum that is necessary to help

Kokomo as the company initiates the always-important first year of any startup. The founders

are confident that $300,000 is sufficient capital to start providing customers with the exceptional

experience that Kokomo Technology will provide for clients while still being able to cover the

costs associated with getting the business off the ground. The financials are laid out over the

next several sections based on a conservative approach to estimating the amount of customers

that Kokomo will maintain and acquire. A business that scales too quickly can experience some

serious problems; therefore Kokomo plans to be reasonable in this assumption.

Use of Funds

Money raised will be put to use immediately towards the traditional fixed and variable costs

associated with any new business. This includes expenses such as the incorporation of the firm,

insurance, office space and furniture, utilities and making key hires supplement the

management gaps as well as other administrative positions. A complete team is necessary for

this industry as performance relies on response time and quality of customer service. Much of

the value provided by IT consulting lies in the ability to be accurate diagnosticians (Turner

1982). In this regard, being a well-rounded corporation with all of the key players in place will

help produce quality diagnostics, which is an important key to success in the consulting game.

Another critical area of a successful consulting business is customer acquisition throughout the

first year; therefore a strong marketing campaign is a crucial and necessary cost that the firm

will pursue from the beginning. Consulting businesses succeed by building quality relationships

with the customers based on reliable service. It is clear that the quality of service will be more

important than the quantity from the beginning (Dubois 2011). In the forthcoming financials, it

should be clear that Kokomo plans to allocate the startup funds to highlight these important

areas. As listed in the Operations Plan, a lot of the startup funding will go to paying employees.

The founders understand that starting a business means a tight budget for the first several

years, which explains the modest starting salaries. An IT consulting firm must have a solid start

when it comes to the IT within, therefore the equipment purchases that must be made right from

the start include: network setup with proper firewall, televisions, web site, cellular telephones,

POS system, and network storage. These costs alone amount to $40,000.

Sales Forecast

The sales projection for Kokomo is that of progressive growth at about one to two percent bi-

weekly, based on the service agreements with existing clients and new service orders with new

customers. The conservative estimates for customer acquisition give a chance for Kokomo to

undersell and outperform, whereas much business plans tend to exaggerate potential earnings.

IT Strategy and Governance, Information Security, Management information systems and

System integration are projected an increase of 2.0% to approximately 5.0% in upcoming years.

Kokomo services will also continue to upgrade their premium services for their clients as the

customer satisfaction increases.

IT training is one of the most profitable entity of Kokomo consulting’s. These projections are

based on strong consulting training to new associates and advertisement of a strong IT

consultant at Kokomo. Since IT specialists are required for any organization when it comes to

shipping and handling for destinations such as bigger corporations. Kokomo will increase

service sales based on their excellent reputation and high customer satisfaction ratings.

IT training is one of the most profitable entity of Kokomo consulting’s. These projections are

based on strong consulting training to new associates and advertisement of a strong IT

consultant at Kokomo. Since IT specialists are required for any organization when it comes to

shipping and handling for destinations such as bigger corporations. Kokomo will increase

service sales based on their excellent reputation and high customer satisfaction ratings.

Cash Flow

The cash flow is an imperative statement for any organization. It gives an idea of how

organization to know if they have enough capital to cover the necessary expenses and the

payroll that are due. As a new corporation, we have raised $200,000 from our investors. The

cash flow statement will help make it clear that Kokomo has the proper funds covered by

keeping the company functioning at a high level. The founders believe that there is an absolute

standard to be met to help spur future cash flows. With the ending cash flow of the year 2016

being $241,139. That is a reasonable capital generated by a group of ten associates. Kokomo

consulting will do just fine if the company’s operating activities are greater than net income.

Table 4 Cash Flow (5 year projections)

CASH RECEIPTS Year 1 Year 2 Year 3 Year 4 Year 5

Income from Sales12/31/201

612/31/201

712/31/201

812/31/201

912/31/202

0Cash Sales $241,139 $398,518 $479,766 $554,127 $640,014Collections $90,676 $167,802 $203,365 $234,707 $272,119Total Cash from Sales $331,815 $566,320 $683,131 $788,834 $912,134Income from FinancingInterest Income $3,185 $2,434 $5,968 $10,315 $17,814Loan Proceeds $200,000 $0 $0 $0 $0Equity Capital Investments

$100,000 $0 $0 $0 $0

Total Cash from Financing

$303,185 $2,434 $5,968 $10,315 $17,814

Other Cash Receipts $0 $0 $0 $0 $0TOTAL CASH RECEIPTS

$635,000 $568,754 $689,099 $799,149 $929,948

CASH DISBURSEMENTSInventory $41,823 $48,920 $56,502 $65,260 $75,375Operating Expenses $357,595 $181,248 $92,858 $93,683 $94,526Commissions/Returns & Allowances

$26,231 $43,839 $52,720 $60,892 $70,330

Capital Purchases $12,135 $0 $0 $0 $0Loan Payments $208,772 $0 $0 $0 $0Income Tax Payments $108,000 $108,000 $108,000 $108,000 $108,000Investor Dividend Payments

$0 $0 $0 $0 $0

Owner's Draw $0 $0 $0 $0 $0TOTAL CASH DISBURSEMENTS

$754,556 $382,007 $310,081 $327,835 $348,231

NET CASH FLOW -$119,555 $186,747 $379,018 $471,314 $581,717

Opening Cash Balance$1,217,52

3Cash Receipts $929,948Cash Disbursements $348,231ENDING CASH BALANCE

$180,445 $367,192 $746,210$1,217,52

3$1,799,24

0

Income Statement

The statement of operations is one the most important documents for the organization. It is a

calculation of company’s sales and expenses over a given period. These statements are

prepared each month, quarter and end of each financial year. The graph below is done on the

income statement section for each year. The statement of operations will contribute to the profit

and loss account because the profit and losses summarize the revenues and expenses of the

company for the five-year period. The statement of operations will provide information to the

investors that Kokomo consulting can generate profits by increasing revenue and reducing

costs.

Break-Even Analysis

By taking into account the net income from the chart above, it is possible to see that Kokomo

will be operating at a loss throughout the first year. The break-even point for this company

occurs about halfway through the second year. Kokomo understands the competitive nature of

the IT consulting business; therefore conservative estimates for customer acquisition were used.

The sales staff will do everything in their power to get the company to grow as quickly as

possible as long as it is at a healthy rate.

Key Ratios

The financials indicate that Kokomo will have a healthy amount of working capital to utilize right

from the start. An important ratio that shows this is the current rate to see how current assets

stack up against current liabilities. The number is positive throughout the first year for Kokomo,

which bodes well for a comfortable start once the doors open.

The next logical step is to jump down the road to utilize the sales projections and see how they

will influence the valuation of the company. This is done by taking a look at the return on

investment through the fifth year, which after fluctuating while the business gets off the ground

has settled at 36%. The outlook is positive when taking into consideration the combination of a

stable return along with the steadily growing working capital.

Five Years Valuation

The Gordon Model of Growth is an in-depth method when it comes to evaluating a business

after five years. It takes into consideration the cash flow in that fifth year and integrates those

funds with the annual constant growth rate (+1) as well as the project growth rate. The formula

looks like this:

Cash Flow Terminal Year (1 + g) / (ks - g).

Kokomo Technology expects a net cash flow of $581,717 in Year 5. Combining this cash flow

with a growth rate of 5% and a discount rate of 27% gives us all of the components needed to

calculate the terminal value after Year 5.

Terminal Value = [$581,717 * (1+.05)] / (.27 - .05)

Terminal Value = $610,803 / .22

Terminal Value = $2,776,377

The value derived from this formula for Kokomo is $2.78 million. This model assumes a constant

growth rate; therefore it is a guide of what things should look like based on the approach used to

forecast the business in the coming years. There will, of course, be increased competition along

the way. However, Kokomo did not use an overly aggressive approach to estimating customer

acquisition throughout the first two years. Therefore, this is another sign that points to a solid

five years of business growth using conservative sales projections for a viable business.

Exit Strategy

One of the most common exit strategies for this type of firm would be a buyout; therefore this

will be something that is available throughout the process. Investors should feel comfortable

with the ability to buy or sell interest in Kokomo Technology with one another. This will leave

some measure of flexibility if one party intends to distance or disconnect themselves from the

project. At first this will not be a very attractive option, however with time the business will

generate more cash flows and as the company grows this opportunity will gain traction. The

buyer does not have to originate from inside Kokomo, as other interested parties should have

the chance to be a part of the firm pending the approval of the board.

Another exit strategy that must be considered in such a competitive industry is a

merger/acquisition. Either company combines to form a new entity or one the business is

purchased. If the proposal in question is a good fit for the parties involved, then this should be

considered a viable option. Obviously there are many details to think considering the outcomes

of these strategies. The founding members may want to stay actively involved as the company

continues, but more importantly the board would like to protect the employees and the integrity

of what has been built over time by Kokomo. There are several ways to come up with the value

of the company when the time is right, which will depend mostly upon how the firm can grow

over time. To make the right deal, Kokomo will need to stay well-informed concerning the

competitive landscape to comprehend better how other comparable companies are valued

(Haroch, 2015).

One important aspect of selling the company involves the role that growth plays in the eventual

sale price. Kokomo Technology has a conservative approach to the amount of customers that

can be acquired and maintained throughout operations. This should make the aforementioned

valuation a more meaningful measure of where the business should be at come the conclusion

of the fifth year.

Taking the company to the masses with an initial public offering is rather unlikely considering the

funds invested and the size of this organization. This is usually an option that stems from a firm

that obtained a large amount of capital from investors at an early stage. Kokomo Technology will

be more likely to search for a better fit through an acquisition to protect the connection that the

firm seeks to establish and maintain with customers as well as the community.

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