Storefront

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Storefront

• Goal - Meet local business needs five years from
  now.
• Opportunity - Invest in local businesses

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How it Would Work

• One founder in each locality with a single server
  appliance and a Road Runner ISP connection
• Acquire 100 customers per year per founder
• Spend 20 hours a week in support
• Spend 3 hours a week in site maintenance - done
  remotely while working regular job
• Standardize and pre-develop sites for specific
  types of business
• Doctor appointments
• Restaurants order
• Sales scenario - load a laptop with a web site
  template and develop a web site in front of the
  customer and offer to have the site operational
  on-line by the next day. Offer one month free

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Demonstrate web development in front of client
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What You Get For 50 Per Month

• Develop web site
• Host site
• Data backup
• User support
• Add functionality

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Founders

• Yudhvir Singh Sidhu - 15 years of work
  experience in IT
• Seema Sidhu, M.D. - is a practicing medical
  physician. She increases Storefronts
  credibility.
• Adesh Singh Sidhu Has extensive product
  marketing experience. He will manage marketing.
• Mr. Chong Ho Chan - is a certified professional
  accountant. He will be the companys financial
  officer.
• Mr. Floyd Casem is a certified Oracle
  consultant who has extensive web development
  background.
• Legal Advisor and Mentor - Will get them,
  part-time

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Phase I

• Spans 2 years, puts 800 businesses on-line
• Attain knowledge about the local environment,
  businesses and consumers and define the exact
  characteristics of the product to be developed

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Competitors

• Web design houses - 36 around Honolulu
• On-line auction houses and storefronts like
  E-Bay, Amazon, Yahoo, or U-Bid
• Internally develop website
• E commerce web hosting service
• Software - like Microsoft Publisher
• ArsDigita and Dresdner Kleinwort Wasserstein

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Environment

• 36 web designers in the Honolulu area
• They charge hourly basis, per-page basis (25/hr,
  250/page)
• Specialize in local restaurants, Medical
  market-WHY?
• 4.7 of 75K local firms are restaurants and a
  founder is M.D.
• Compete with Yahoo (name, phone , map)
• Menu fax, reservations, appointments

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Risks

• Inertia have to justify effort to
• maintain on-line content
• keep up with consumer expectations
• spend time servicing on-line relationships
• Slowing economy, layoffs flood local markets with
  IT talent and put pressure on margins
• XML technology and automated wizards simplify
  commerce interface and lower costs to develop
  applications

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Phase II

• Spans 2 years, puts another 800 businesses
  on-line (1,600 clients at end of year 4)
• Develop product suite based on earlier phase
• 4th year - make product suite de facto standard
  in industry
• 5th year - Add 2nd revenue source based on
  installation and support of product suite

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Web Services Revolution
All business activity will be native to the web
All software will Be delivered as services
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What if you could view every business on the
Internet...
Customer
Affiliate
Distributor
Trading Hub
Your Business
Supplier
as a potential business partner? As a source of
new services and products to sell? As channel of
distribution for your products and services? as
a unique highly customized relationship?
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Support Revenue

• Restaurant chains like Zippy's, Red Lobster, Hard
  Rock Café,
• Medical facilities like Long's Drugs, Straub
  Clinic, St Francis hospital
• Standard support contract 15,000 per month
• Premium support contract 50,000 per month

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Capital Structure

• Company will be composed of 4 founders
• Each one contributing 15,000
• Total paid-up capital is 60,000
• This will be a S Corporation

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Financials - Year 1

• Revenue for 400 customers 133,000
• Total cost of operations 19,680
• Break-even at 35 clients
• Gross Profits 110,320
• Total Expenses 28,821
• Net Profit 81,499
• Cash balance (opening) 60,000
• Cash balance (closing) 141,499

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Financials - Year 2

• Revenue for 800 customers 370,000
• Total cost of operations 162,560
• Break-even at 270 clients
• Gross Profits 207,440
• Total Expenses 43,429
• Net Profit 164,011
• Cash balance (opening) 141,499
• Cash balance (closing) 305,510

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Financials - Year 3

• Revenue for 1200 customers 610,000
• Total cost of operations 245,440
• Break-even at 410 clients
• Gross Profits 364,560
• Total Expenses 77,671
• Net Profit 286,889
• Cash balance (opening) 305,510
• Cash balance (closing) 292,399
• After Software development 300,000

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Financials - Year 4

• Revenue for 1600 customers 850,000
• Total cost of operations 248,320
• Break-even at 414 clients
• Gross Profits 601,680
• Total Expenses 91,445
• Net Profit 510,235
• Cash balance (opening) 292,399
• Cash balance (closing) 62,634
• After Software development 740,000

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Conclusion

• Financially, this business can survive through
  Phases I and II
• Exit strategy - founders can elect not to develop
  the software and distribute the 1 Million profit
• Exit strategy - If the 1 million investment in
  the software is a failure, founders can still
  receive their paid-in capital