computer manufacturing business plan

Become A Computer Manufacturer - Business Ideas

Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.

A computer manufacturer business involves designing, producing, and selling computers and computer hardware. This can include desktop computers, laptops, tablets, and even servers and other specialized equipment.

To start a computer manufacturer business, you will need a strong understanding of computer hardware and technology. This may include a degree in computer science or a related field, as well as experience in computer hardware design and production. You will also need a well-defined business plan, including a marketing strategy, a budget, and a plan for sourcing components and materials.

In addition to these technical skills and business planning, you will need to have strong communication and customer service skills. As a computer manufacturer, you will be interacting with both retail and wholesale customers, and will need to be able to clearly explain the features and benefits of your products.

The computer manufacturing industry is a large and growing market, with global revenue expected to reach $485 billion by 2024. In the United States alone, the computer and electronic product manufacturing industry employs over 800,000 people and generates over $300 billion in annual revenue. With the increasing reliance on technology in personal and professional settings, the demand for high-quality computers and computer hardware is expected to grow in the coming years.

To run a successful computer manufacturing business, it is important to stay up-to-date on the latest trends and technologies in the industry. This may involve attending conferences and trade shows, conducting market research, and continuously improving your products and processes.

By staying on the cutting edge of the industry and providing excellent customer service, you can build a successful and thriving computer manufacturer business.

Becoming a computer manufacturer requires a great deal of effort, dedication, and most importantly passion .

If you're interested in how to sell computer, or selling computer online, you can use this page as a guide for everything you'll need to know.

Startup Costs

Case studies.

Successful Businesses

Pros & cons, marketing ideas, affiliate program.

Affiliate marketing is a great way to bring in a new revenue stream , especially when you don't sell products or services.

Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

The affiliate typically gets a unique link where clicks and conversions can be tracked.

Learn more about affiliate program ➜

Direct Sales

Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

Learn more about direct sales ➜

Word of mouth

Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

According to Nielsen , 92% of people trust recommendations from friends and family.

Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.

Learn more about word of mouth ➜

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How to Start Your Own Computer Company

• Small Business
• Types of Businesses to Start
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How to Start a Computer Repair Business From Home

How to remove unwanted pre-installed programs on a sony vaio, how to connect a laptop to a pc via ethernet cable.

• How to Connect an Interactive Whiteboard to a Computer
• Where Is the Location of the C Drive on Windows 8?

Starting your own company requires planning and organization. Research and choose a suitable business model before starting your own computer company. Begin by assessing your target market's needs. Structure your business to provide computer software and hardware products to your customers in an efficient, cost-effective manner. Using the resources provided by the Small Business Administration Small Business Planner website, acquire the training needed to enable your success.

Assess your readiness to start your computer company by using the questions provided by the Small Business Administration to evaluate your skills and experience. Running a computer company typically requires industry expertise, product knowledge and customer support skills. Research different business models to run your operations. Franchise operations usually provide training and other materials to run a successful business. For example, purchase a franchise to buy, sell and service laptop computers. Open an attractive retail storefront and provide quality service and repair.

Conduct market research. Use industry outlook information about the computer industry to help you make decisions about your core business strategy. For example, review the economic indicators provided by the Census.gov website. According to the Bureau of Labor Statistics, more than 75 percent of U.S. households own at least one computer. Use the American FactFinder website to get details about your local community. Use the information to target age groups. For example, the 55-to-64 age group increased by 33.3 percentage points from 2000 to 2008. To meet their needs, offer these retirees refurbished laptops at an affordable price.

Write a business plan. Your business plan should include a comprehensive description of your company, your products and services, your marketing strategy and your financial information. Use the tools and templates provided by the Small Business Administration website to fill out the details.

Use the resources provided by the Business.gov website to set up the legal structure of your computer company. For example, set up a partnership, sole proprietorship or limited liability corporation. Name your company and register the name. Get a tax identification number to pay your federal, state and local taxes.

Create a website to advertise your computer company. Establish a network to obtain business referrals. For example, volunteer at local community events to meet potential customers. Establish your expertise in your community.

Obtain resources and training from vendors, such as Microsoft, HP and IBM. These companies offer certification training and the opportunity to become an authorized reseller or service provider.

Manage multiple revenue streams, such as onsite service, online sales or mobile Internet information to maintain a competitive edge for your computer company. Get a mentor through the SCORE website who can advise you on how to set up these features in your local area.

• Entrepreneur: Computer Products
• Business.gov: Start a Business
• Bureau of Labor Statistics: Focus on Prices and Spending
• Intuit: Small Business

Tara Duggan is a Project Management Professional (PMP) specializing in knowledge management and instructional design. For over 25 years she has developed quality training materials for a variety of products and services supporting such companies as Digital Equipment Corporation, Compaq and HP. Her freelance work is published on various websites.

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How to Start a Profitable Computer Assembling Business

Do you want to start a computer assembling business? Find here a detailed stepwise business plan guide on starting a custom PC-making business.

Computer assembling also allows customized PC-making services. Because of the high price of the branded computer, many people go for high-configuration assembled computers. You can start the business by importing spare parts for the computer from China or any other country.

For a small business, creating a loyal and niche customer base and creating a proper distribution network are important. You can start this business at home too. As your business grows, you can operate from a retail space.

Read:   How to Start A Computer Training Institute 

On a small scale, computer assembly is a simple task because of the highly standardized nature of computer components. Computer component manufacturers build their products according to to set industry standards, allowing for a wide degree of compatibility with components from other manufacturers.

Assembling a computer is as simple as snapping in purchased components from upstream suppliers, some of which include Intel and IBM, into appropriate slots within computer cases.

Computer Assembling Business Plan

Do some market research before starting. The industry is changing very fast with different technology upgrades both in hardware and software. Prior experience and knowledge about the industry are preferred. Pay attention to crafting a computer-assembling business plan . Identify the niche segments in starting.

Plan about how you will be going to find customers. Determine how you will be going to compete with other established organizations in the same field. Calculate, how much cash you need to start and survive the business for at least 6 months.

Following are some of the steps you  need to follow to start and run a PC assembling business:

• Decide on what kind of computers you are going to assemble. Conduct market research in your locality to understand the trends and demand for custom PCs the customers are looking for.
• You need to fix the price for your custom-made computers. You can choose either value-based pricing or mark-up pricing.
• Choose a relevant business name for your computer assembling business.
• Check with the local authority what licenses are required, if any to run the business.
• Choose a business structure and after getting the proper documents open a business bank account.
• Create proper work with the equipment needed to produce PCs
• Promote your business by networking with people as much as you can. Create a business cards, flyers, and brochures and distribute them to local people.
• If you can afford it, create a website in the name of your business. A website of your own will for sure enhance the credibility of your business.

Computer Assembling Business Services

You can offer a wide variety of services to your clients. You can offer a computer security system, computer cleaning service, software installation, computer upgrades, computer maintenance, etc. To create a loyal customer base it is advisable to focus on a niche audience.

In this business, post-sale customer service plays a crucial role in the expansion. In starting, you can tie up with other businesses for mutual benefits. You must pay attention to building a solid distribution network. And expand in a legitimate way.

Read: How to Start a Computer Repairing Business 

Computer Assembling Business Resources

When you are starting a business from home with a small budget, you must plan your business resources rightfully. Raw material procuring is the most important one. You must procure the items at the best price. In this industry, the equipment and tools are basically the same.

Microsoft for operating systems, Intel for processors and motherboards, and Western Digital for hardware are well-known to every people. But the fact is, you can source the materials by bargaining, for at least 5% less price than markup from the right vendors.

Morris Rosenthal, renowned author of Start Your Own Computer Business advises not to stock more stuff beyond your present requirement. “The shelf life for items like hard drives and memory is similar to that of fresh produce in the supermarket,” says Rosenthal.

He also adds, “Computer parts suffer from a type of spoilage I’d characterize as premature obsolescence. New hardware is being released every month, and even if your customers don’t push you for the latest thing, the emergence of new products causes the prices of older products to fall as vendors who bought in quantity get discounts to try to unload them.”

“For Further Reading”

• Start Your Own Computer Business
• Start Your Own Computer Repair Business

Simple Steps of Computer Assembling

After you got the order with detailed specifications from clients, it’s time to get the job done. Here, I have listed some basic steps of computer assembly.

• Get the computer case ready for installation.
• Install the power supply unit (PSU) first
• Install DVD Drive
• Install motherboard
• Install processor (CPU)
• Install CPU heat sink and CPU fan
• Install memory
• Install a hard disk drive (HDD) and solid-state drive (SDD)
• Clear CMOS to reset BIOS or UEFI settings
• Tuck and tie PSU wires
• Connect power to the motherboard
• Connect power to CPU
• Connect case front panel wires to the motherboard
• Connect the case front panel USB 3 wire to the motherboard
• Connect the case front panel HD audio wire to the motherboard
• Connect the case fan to the motherboard
• Connect power to HDD/SSD and DVD
• Connect SATA cables from the motherboard to HDD/SSD and DVD
• Install the video card
• Install an internal adapter card
• Place your company logo label on the case
• Test Connection
• Install operating software

These are the basic steps in computer assembling. Generally, you will get orders for customized assembling as per the specific requirement of the PC user.

About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.

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Computer Support Business Plan

Start your own computer support business plan

I Tech Solutions

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

I Tech Solutions is a consulting-oriented company, intending to fill in the market need for a professional, customer-focused computer company. The company emphasizes service and support to differentiate itself from more price-oriented computer companies. We are on the brink of penetrating a lucrative market in a rapidly growing industry. The current trend towards an increase in the number of entrepreneurs and competition amongst existing companies presents an opportunity for I Tech Solutions to penetrate this market.

Located at (discussion omitted), we realize that, for us to prosper, we need to be flexible and responsive, to delight clients by providing them with what they want, when they want it, and before the competition can offer it. The company intends to achieve this through a solutions approach that is customer-centric, and in which the customer’s business objectives enjoy top priority.

Once the needs and processes are understood and described, leading edge products and best-of-industry skills will be applied to design and develop a fitting solution to enable the client’s business in the most cost effective way.

Our marketing strategy will be based mainly on ensuring that clients know what need the service(s) is able to fulfill, and making the right service and information available to the right target client. We intend to implement a market penetration strategy that will ensure that our services are well known and respected in our respective industry. Our strategy will convey a sense of quality and satisfaction in every picture, every promotion, and every publication. Our promotional strategy will involve traditional advertising, Internet marketing, personal selling, public relations, and direct marketing, details of which are provided in the marketing section of this plan.

It is important to recognize that make our intangible resources, such as our ability to relate to customers regarding their needs and wants, management style, corporate culture and commitment. These elements will differentiate us from our competitors and contribute towards the development of a sustainable competitive advantage.

In a nutshell, we don’t intend to just market and sell our product and services, but to provide customized services and products that will enable our clients to optimize their output and, assist in the attainment of their goals and objectives. However, for us to attain the above stated we shall need funding from outside investors.

Note : All currency values in the charts and tables are expressed in the Botswana Pula (P).

1.1 Objectives

Our business strategy will revolve around the need to provide quality products and services to our various target customers. This shall be undertaken through the establishment of a professional team and the provision of quality, custom-designed services, catering to the client’s particular needs.

We intend to attain the following objectives:

• Develop a follow-up strategy to gauge performance with all our clients.
• To continuously formalize and measure cross-functional working communication so as to ensure that the various departments work harmoniously towards attainment of company objectives.
• To instill a culture of continuous improvement in beating standards of customer satisfaction and efficiency.
• We are fully committed to supporting growth and development in the economy.

1.2 Keys to Success

The keys to the projects’ success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. The key success factors will include the following:

• Excellence in fulfilling the promise: completely confidential, reliable, trustworthy expertise, and service(s) through the provision of an uncompromising service. This dictates that we have the latest technology, hardware, software, and well-trained personnel so as to deliver this promise.
• Timeous response to clients’ orders: we cannot afford to delay our clients for whatever reason, as this will have a negative bearing on our image, reputation, and future business. We need to be continually communicating with the client, ensuring we provide needs-based solutions.
• Skill and depth of knowledge: Considering the nature of our services and their relative infancy on the market, the skill and depth of knowledge of our personnel is of utmost importance in determining the provision of the service(s) to the end-users.
• Clear product and marketing positioning: Not wanting to be associated with the numerous vendors on the market, we intend to aggressively market our business and the services we provide in order to be at the top of our clients’ minds.
• Leveraging from a large pool of expertise: The company’s various alliances with technological and training partners shall prove invaluable. The skills and intellectual capacity these partners will have in the fields of product support, design and system integration, implementation and execution, lifecycle support and understanding, training, and in the application of new technology are intangible benefits to I Tech Solutions.

1.3 Mission

Company Values

I Tech Solutions is committed to the fair and ethical treatment of employees and stakeholders. This shall be undertaken through implementation of the following company values:

• We intend to be a responsible corporate citizen, fulfilling our obligations as an integral member of society. Our business decisions will give appropriate weight and consideration to social and environmental impacts.
• We intend to provide products and services of uncompromising quality.
• We intend to seek mutually beneficial and enduring relationships in all the commitments that we make, ensuring that they are straightforward and honest. Our communication will be open and accurate, both internally and externally.
• We will intend to uphold all the above company values, promoting our employees to do likewise.

Through implementation of the company values, we believe that we will be able to attain our goals and objectives for the benefit of all concerned, in particular, the communities in which we will operate.

I Tech Solutions is built on the assumption that the management of information technology for business is like legal advice or accounting, in that it is not inherently a do-it-yourself prospect, and requires outside expertise to install and implement it. Smart business people need to find quality vendors of reliable hardware, software, service, and support. They need to use these quality vendors as they use their other professional service suppliers: as trusted allies.

I Tech Solutions intends to be such a solution provider. We will serve our clients as trusted allies, providing them with the loyalty of a business partner and the economics of an outside vendor. We want to make sure that our clients have what they need to run their businesses as well as possible, with maximum efficiency and reliability. Many of our information applications will be mission critical, so we will give our clients the assurance that we will be there when they need us. The above is well summarized in our mission statement which is as follows:

“The company is dedicated to leveraging emerging technologies to provide the highest level of quality products and services, customer service, and security.”

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How to Start a Computer Business

Last Updated: April 20, 2023 References

This article was co-authored by Luigi Oppido and by wikiHow staff writer, Christopher M. Osborne, PhD . Luigi Oppido is the Owner and Operator of Pleasure Point Computers in Santa Cruz, California. Luigi has over 25 years of experience in general computer repair, data recovery, virus removal, and upgrades. He is also the host of the Computer Man Show! broadcasted on KSQD covering central California for over two years. This article has been viewed 178,990 times.

While your dream may be to start the next Apple or Microsoft out of your garage, it is more likely that your desire to start a computer business involves dealing with existing systems via sales, service, or support. With the rapid changes in technology that have already led some to place us in the “post-PC era,” [1] X Research source the job of a computer repair person , for instance, has changed quite a bit from ten years ago and will surely be quite different ten years from now. Beyond keeping up with changing technology and maintaining your expertise, however, starting a computer business requires many of the same skills required of any other small business field — things like a clear business plan, a smart marketing strategy , and outstanding customer service.

Aligning Your Skills and Goals With the Market

• Have you ever dissected, reassembled, or repaired a computer? Are you familiar with all major operating systems? Have you worked in the computer field before? Honestly assess your readiness to start a computer business, or ask someone else with industry knowledge help you make the assessment.
• Completing a degree in the computer field will certainly help you in starting a business, but it is unlikely that most customers will ask to see your diploma. More important is your ongoing gathering of experience, whether through education, training, or employment.
• Certification is a good way to indicate expertise, though. You may want to seek A+ certification from the Computer Technology Industry Association (CompTIA), or the related N+ network certification, or become a Microsoft Certified System Engineer (MCSE). [2] X Research source These can help give your business card an air of legitimacy.

• In this so-called “post-PC era,” you may find demand for traditional computer sales, service, and/or support to be much reduced, especially among a younger, tech-savvy population. However, especially in areas with older populations and/or small-town and rural areas, you may find a greater percentage of people in need of PC repairs and support. Remember, you need to keep up with the latest technology; many of your potential customers do not (and will not). [3] X Research source [4] X Research source

• New technology is meant to make life easier, but many consumers find it to be just another layer of confusion. General set-up and troubleshooting tasks, like setting up printers and wireless networks, data recovery and wiping, and media archiving or editing, may remain a viable component of your business, even if PC repair requests decrease.
• If you can prove yourself to be an expert on computers and related technology, and can build a positive reputation, you should be able to find a niche for your computer business.

• If you’re looking to keep your computer business as a part-time job, then keeping your focus on repairs and troubleshooting may suffice.
• Building your business into a full-time occupation, however, may require further diversification of the products and services you offer, perhaps by selling parts, accessories, or entire systems. You’ll need to draw in a loyal client base and build a positive reputation in the community.

Succeeding in the Computer Business

• Even if computers are your focus, expect people to seek help and guidance with all sorts of mobile technology, from phones to tablets to watches. You may or may not want to get into the mobile tech sales and/or service business — consider the increased inventory demands, for instance — but being able to provide general troubleshooting, training, and support on the latest devices may prove quite useful. [6] X Research source
• If home service calls are part of your business, the essential toolkit you take with you will continue to shift along with technology. However, you can find a good list of basic equipment you’ll need (for the time being) at https://www.technibble.com/categories/starting-computer-repair-business/ .

• You’ll deal with panicked customers who think they’ve just lost all their important files, irate customers who want immediate help at 10 p.m., and hovering customers who want to supervise (and ask about) every move you make. You need to be able to remain calm , courteous, and patient. As a small business, you’re not likely to be able to match the prices of your larger competitors — the personalized service you offer needs to offset this disadvantage.

• Put some thought to your business name, logos , signage, marketing, etc. Create a professional look that presents your business as legitimate and lasting.
• Referrals will be essential to your business. Always hand out professional-looking business cards to existing customers, and consider offering referral discounts or rewards. Throwing in some free service or equipment is a small price to pay in order to build up your customer base. [8] X Research source
• Especially if you don’t have a storefront, make your business website and/or social media presence appear professional and interconnected to your overall brand.

• Working from home, for instance, offers more flexibility and less overhead costs, but also offers less visibility and possibly more distractions. A well-placed storefront adds to your visibility and helps legitimize your business in the public’s mind, but it comes at a cost and tends to lock you into a more rigid schedule.
• If you focus on computer repairs, working in your own shop may limit distractions and save you time and travel money, but customers may be more comfortable with you working on the equipment in their homes. (Your potential liability is also likely to be reduced when you don’t take the equipment with you.)

Starting a Small Business: Some Basics

• See How to Write a Business Plan for a good primer on the process of creating this important document.

• You may want to save on taxes by having customers pay cash “under the table” and not reporting the income, but this gives your business an air of illegitimacy (as well it should) for your customers. You are better off paying the taxes and appearing (and being) legitimate. [9] X Research source
• How to Open a Small Business offers some nice information on the legal requirements of establishing a business. The U.S. Small Business Administration website is also a great resource; see, for instance, https://www.sba.gov/content/follow-these-steps-starting-business .

• Volunteer some of your time and expertise. Be a supporting sponsor at community events (with the requisite public recognition, of course). Use your advertising and branding to develop a sense of stability and permanence for your business, even in a field that changes as rapidly as computers.
• No matter the nature of your small business, you need to be visible, you need to be reliable, and you need to provide a personalized experience that builds customer loyalty.

Expert Q&A

You Might Also Like

• ↑ https://www.technibble.com/moving-wearable-mobile-repair-post-pc-era/
• ↑ http://www.computerhope.com/issues/ch001553.htm
• ↑ https://www.technibble.com/categories/starting-computer-repair-business/
• ↑ http://www.mytopbusinessideas.com/computer/
• ↑ http://www.tomshardware.com/answers/id-1813630/starting-computer-repair-setup-consulting-business-tips.html

About This Article

To start up a successful computer business, find a way to match your skills with the needs of your local computer market. Assess the training and experience that you have with computers to determine the type of computer business that is best suited to your talents. For example, if you have experience building personal computers, you can use your background to start up a business selling discounted computers that you assemble from parts that you acquire. In addition to your skills and experience, it’s important that you analyze the market around you to see if you can start a successful business. Consider the demographics in your area and think about what type of computer products or services they’re likely to purchase. For example, if you’re selling discounted computer systems, and your area has a large number of older people looking to buy a simple home computer, you may have a market for your business! For tips about how to build your brand identity when you’re starting a computer business, keep reading! Did this summary help you? Yes No

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• Business Plans Handbook
• Business Plans - Volume 05
• Computer Reseller Business Plan v2 Business Plan

Computer Reseller BUSINESS PLAN

ELLIPSE TECHNOLOGIES, INC.

1500 North River Street

Kalamazoo, MI 48221

This business plan demonstrates that in order to enter an industry where there are already several successful dominant players, a business has to cater to a small segment of the marketplace or offer unique services. Ellipse does both. As a reseller of computer equipment and software, Ellipse is very aware of its position in this competitive arena, and plans to successfully address this challenge.

EXECUTIVE SUMMARY

Company overview.

• PRODUCT STRATEGY

MARKET ANALYSIS

Marketing plan, financial plan.

• CASH FLOW PROJECTION

Ellipse Technologies' mission is to supply clients with state-of-the-art computers and computer related products, along with a plan for integration of computer technologies into clients' day-today business operations.

Ellipse Technologies' core business activity consists of value-added reselling of computers and computer products, including various kinds of system, network system, voice recognition, and image processing. Additionally, Ellipse Technologies provides custom training, and maintains support contracts with certain clients to insure stability in their computer operations and information systems.

The largest volume product sold by Ellipse Technologies is a family of voice recognition software from Dragon Systems, Inc. The voice recognition software consists of large vocabulary speech products that accepts voice input to a Microsoft Windows based personal computer to run commands and produce text.

The principals of Ellipse Technologies have built a solid base of voice recognition clients in the fields of physical rehabilitation, healthcare, and law. During this time, as advances in both computer hardware and the voice recognition software have occurred, sales of voice recognition technologies have grown steadily. This growth hasoccurred with minimal investment in advertising and marketing.

Ellipse Technologies plans to significantly expand its sales and client base by increased marketing and advertising.

Legal Business Description

The legal name of Ellipse Technologies is Ellipse Technologies, Inc.

The legal form of Ellipse Technologies is a Subchapter S Corporation, incorporated in the state of Michigan.

The business location of Ellipse Technologies is 1500 North River Street, Kalamazoo, Michigan, 48221.

Management Team

Our management team consists of 3 individuals whose backgrounds consist of years of in-depth experience in computer system development, sales, healthcare, and marketing with corporations and institutions throughout Michigan and the U.S.

In-House Management

• Matt Williams, President
• Darlene VanMarkus, Vice President of Marketing
• Maria Williams, OTR, CHT, Corporate Secretary, Operations Director

Outside Management Support [hourly/project basis]

• Don Hoffman, Accountant/CPA
• Joanna Crenshaw, Corporate Attorney
• Sam Hillman, Financial and Business Consultant

Strategic Alliances

Dragon Systems, Inc. (Ellipse Technologies is a Premier Reseller of products)

Infotel, Inc. (Ellipse Technologies is a reseller of computer hardware) FOSA Computer (Ellipse Technologies is a reseller of notebook computers)

PRODUCT STRATEGY: CURRENT PRODUCT

Ellipse Technologies currently offers several main products and services:

• DragonDictate for Windows - Personal Edition (Resell software from Dragon Systems, Inc.)
• DragonDictate for Windows - Classic Edition (Resell software from Dragon Systems, Inc.)
• DragonDictate for Windows - Power Edition (Resell software from Dragon Systems, Inc.)
• DragonPro Medical Vocabulary - (Resell software from Dragon Systems, Inc.)
• DragonPro Legal Vocabulary - (Resell software from Dragon Systems, Inc.)
• DragonPro Business Vocabulary - (Resell software from Dragon Systems, Inc.)
• Dragon Naturally Speaking, Continuous Dictation software- (Resell software from Dragon Systems, Inc.)
• Dragon Xtools Development System - (Resell software from Dragon Systems, Inc.)
• Custom configured desktop Voice Recognition computer systems (Resell software, Resell hardware, system integration)
• Custom configured portable Voice Recognition computer systems (Resell software, Resell hardware, system integration)
• Custom configured desktop and portable business computer systems (Resell hardware, system Integration)
• Consulting, training, and installation of voice recognition products (Services)
• Custom configured networked computer systems (Resell hardware, system configuration)
• Networked computer system installation, support, and training (Services)

Market Definition

The voice recognition market is growing at a rapid rate. The market for these products amounted to 20.6 million units sold world-wide in 1994, and 45.3 million in 1995.

Unit sales figures were over 145 million in 1996. Projections are for over 1,700 million in 1997, and 4.2 billion units in 1998, based on data supplied by FSG Associates, a national market research firm.

The traditional market for voice recognition sales has been for individuals with physical disabilities. With today's and tomorrow's computer hardware combined with improvements in the performance of the voice recognition software, the market is shifting to professionals who need to (inexpensively) produce large quantities of documentation.

Customer Profile

Ellipse Technologies' target market includes physical rehabilitation, healthcare, and law. The most typical customer of our products is someone who needs to operate a computer and (especially) produce textual material, but cannot (or chooses not to) use the computer keyboard. This often includes individuals with physical disabilities, physicians and other healthcare professionals, or those in the legal profession, who produce large volumes of documentation.

Competition

Companies that compete in this market are IBM (and representatives), and Kurzweil Applied Intelligence (and representatives), along with other Dragon resellers (to a lesser extent within the state of Michigan). All companies charge competitive prices:

Dragon Systems has clear advantages over other competitors in the voice recognition market. Dragon was the first company to introduce voice recognition software for personal computers, it holds patents in many sectors of this technology, and its software is reputed to be the easiest to use, compared with competing products.

Additionally, Dragon Systems will be releasing a new product this summer called Naturally Speaking. Naturally Speaking is a continuous speech product that allows the user to talk at speeds of over 100 words per minute with a high degree of accuracy. This product is expected to cause sales of voice recognition software to dramatically increase.

Ellipse Technologies has competitive advantages over other resellers in this industry. Its management team entered the market of voice recognition early and has already established a network of clients at major hospitals and rehabilitation agencies throughout the state of Michigan. Ellipse Technologies maintains a status with Dragon Systems known as a Premier Reseller of Dragon software. As a Premier Reseller, it works directly with Dragon Systems to develop marketing plans and provide support and training for all Dragon products in exchange for a regular supply of leads, referrals, and sales consulting.

The top business risks that Ellipse Technologies faces as it begins to expand in the voice recognition market are: (1) Other, larger companies will enter the market; and (2) that voice recognition technology will become "mainstream" and be bundled withcomplete computer system packages.

These risks are minimized by the fact that: (1) The investment in money, personnel, and "knowhow" are significant. Ellipse Technologies' staff has over 2 years experience in installing, configuring, and supporting voice recognition products, and therefore a major lead from all other competitors, (2) Even though voice recognition technology is likely to be part of most computer systems in the future, it will take quite a while before professional assistance is not required. This is evidenced by the fact that there is still a large need for word processor consulting, training, and support even though word processing software has been sold and marketed for over 15 years.

Ellipse Technologies' marketing strategy is to enhance, promote and support the fact that our products are cost-effective solutions for anyone who produces volumes of text using a computer. We can also demonstrate our products' cost-effective nature for use in rehabilitation, since it is Americans with Disability Act (ADA)-compliant, bringing many Workman's Compensation claim individuals back into the marketplace.

Sales Strategy

Because of Ellipse Technologies' special market relationship with Dragon Systems within the state of Michigan, our sales strategy includes telephone follow-up with daily leads submitted by Dragon Systems, processing credit card purchases made by telemarketing staff at Dragon Systems, and selling hardware and custom training for customers of voice recognition systems.

Additionally, Ellipse Technologies plans to undertake direct sales activity to institutions and large business organizations. Likely customers include hospitals, schools, clinics, banks, insurance companies, and law firms. On a regular basis Ellipse Technologies plans to attend or sponsor seminars or conferences for purposes of exhibiting voice recognition and other state-of-the-art computer technologies.

A partial list of Ellipse Technologies' major current customers includes:

• Middleton Medical Center
• Michigan Jobs Commission
• Jordan Clinic of Petoskey
• Kalamazoo Rehabilitation Center
• Detroit Medical Center
• Michigan Rehabilitation Services
• Donald Sutherland, MD, PC
• Littleton & Littleton, PC
• Pharmacia Upjohn
• Benjamin County Central Schools
• Randolph-Milton, PC
• Michigan Land Use Institute
• Kalamazoo Area Public Schools
• Watertown Public Schools

Advertising and Promotion

Our advertising and promotion strategy is to position Ellipse Technologies as the leading voice recognition system dealer in the state of Michigan. Additionally, we wish to achieve name recognition as a supplier of high-tech, state-of-the-art computer systems and components that emphasize voice recognition. Our slogan, "Taking business to new horizons," is intended to signify a company that provides forward-looking office solutions.

We will utilize the following media and methods to allow our message to reach our customers: (1) Advertisements in tradejournals and industry newsletters; (2) Direct sales contacts to institutions, providing them with on-site seminars and trials of the products; (3) Direct mail of literature and videocassettes demonstrating the power of our products; and (4) Sponsorship and attendance at published seminars and conferences to exhibit our products.

For the next 12 months, advertising, marketing, and promotion will require approximately $12,000. Much of this cost will come from ongoing sales revenues, however Ellipse Technologies is seeking part of this money to begin its market thrust.

On an ongoing basis beyond that period, we will budget our advertising investment as 5% to 10% of total sales.

Public Relations

During 1997 Ellipse Technologies will focus on the following publicity strategies: (1) Direct mail of literature and videocassettes to large legal and healthcare organizations; and (2) Direct mail of invitations to seminars held in various cities to demonstrate the capabilities of the technologies.

We will track, wherever possible, the incremental revenue generated from our publicity efforts. We anticipate at least 40 percent of total sales will be generated directly from our publicity, journal advertising, and name recognition, 20 percent from follow-up of direct referrals from Dragon Systems, 20 percent from "cold calls" of target organizations, and 20 percent of sales from indirect referrals and "word-of-mouth" referrals.

Our objective, at this time, is to propel the company into a prominent marketposition in the areas of voice recognition and high-tech office solutions. We feel that within 3 years Ellipse Technologies will be in a suitable position for further expansion or profitable acquisition.

Assumptions

The cash flow analysis shown in Appendix A shows revenues based on the first 4 months of operation. It also delineates revenues from a network maintenance contract with Benjamin County Central Schools that includes contractually specified service revenue and a moderate amount of hardware sales revenues.

After the first few months of administrative setup, sales are expected to increase, and then grow at a rate of approximately 5% per month for hardware and 10% per month for the software. This is expected due to greatly increased expenditures for advertising and promotion, coupled with national expectations of the growth of certain technologies.

Capital Requirements

According to the opportunities and requirements for Ellipse Technologies described in this business plan, and based on what we feel are sound business assumptions, our first year outside capital requirements are for $16,000.

The loan will be used to purchase a high-end demonstration computer, and to finance an initial thrust in advertising, marketing, and promotion beyond levels spent in the past.

Exit/Payback

The increase in profits generated by Ellipse Technologies sales will allow us to have the funds to repay the loan in 24 months.

Ellipse Technologies enjoys an established track-record of excellent sales, support, and service for our customers. Their expressions of satisfaction, encouragement, and testimonials are numerous, and we intend to continue our advances in the voice recognition marketplace with even more unique and effective products and services.

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Cash Flow Analysis

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