Webhosting service proposal

Document Version: Date: Completed by:

1.0 30/08/2013

1. Business details Company name: Sheffield webhosting and IT business services Address:

The business will offer the services as follows: Web hosting Web design Software development E-commerce solution and hosting Networking

2. The business idea The purpose of this business plan is to raise 5000 for the development of a web hosting services while showcasing the expected financials and operations over the next three years. The company is the Sheffield based company that will provide offsite management of customers domain names, website design, web-hosting, networking services, software outsource and security certificates to customers on a nationwide and international base. Ideal for developing and offering these services basing on experience, skill, and knowledge gained by business owner and key staff who are available to contribute significantly to business objectives of the company. 3. Business services The primary source of revenue for the business will come from the direct hosting of websites on behalf of customers on the Companys server network. At the onset of operations at opening, the Company will have the capacity to host up to 1,000 separate domains and websites on its servers in the first year. Company will also offer specialized servers for customers that have extensive dedicated web server needs (this is especially true of businesses that have a high volume of e-commerce transactions). From this segment of the business, the Company will generate monthly recurring revenues for providing these services. Company will also generate secondary streams of revenue from the sale of domain names (as a third party vendor), website development, outsourcing software, security certificates as well as networking services. The next section of the business plan will further describe the services offered by Web Hosting Company. No 1 2 3 4 Product/service Web hosting Web design Software development E-commerce solution and dedicated hosting Networking Features Offering web hosting for business customer Designing website for business company and organization Developing software and mobile software (Android, iOS and Window phone) Consulting E-commerce and turn-key solution for online business Setting and installing networking for company and organization by providing implementation services and networking hardware

4. Business differentiation and competition These services will be offered by using current relationship and networking which are developed for long time by staff and manger. The principle of business will use time availability of staff member, outsourcing from external partners within the UK and other countries which can support and and provide services for the company. In the other word, the company will incorporate with other partners and use information technology (online business tools) to provide services to target customers in order to save funds and avoid risks. This principle can help to save money for many initial operations and can produce services

with very low investment. As a result, the company expectedly offers its services at low cost to make its competitive advantages. 5. Customer profiles The target market is international and UK companies need webhosting services and website, especially SMEs. 6. Sale, Marketing and promotion The company intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company. 7.1 Marketing Objectives

Implement a suitable scale search engine optimization and pay per click campaign at the onset of operations by using the Googles Adword for international and UK market and Gumtree for local market at UK, the first with local business- South Yorkshire and UK wide later. Intensively offer promotion to attract customers, Develop an online presence by developing a website and placing the Companys name and contact information with online directories.

7.2 Marketing Strategies The marketing strategy primarily includes the use of search engine optimization, pay per click marketing, local business advertising and promotion. For instance, when a person does a Google search for web hosting services, the company name and service will appear on the first page of the search (this will take a substantial amount of work). This strategy is technically complicated, and the company will use a search engine optimization to develop the companys visibility on a non-paid basis with expectation that SEO method will place large amounts of linking data and text specific keywords into the businesss website, which will allow the Company to appear more frequently among search engines. A majority of web portal and search engine companies use very complicated algorithms to determine a websites relevance in relation to a specific keyword. SEO place text and tags on the website to increase the rank of a specific website. This strategy is expensive, but the results can be phenomenal if this marketing strategy is properly executed. These advertisements appear along the border and side of a website, and each time a person clicks on the website, a small fee ranging from fifty cents to one dollar is charged to the Companys account. This will be the primary method for generating visitors at the onset of operations. 7.3 Marketing plan There are two weapons used to compete on the market, including free website and free hosting. Free website offer: In order to attract customer, company will advertise on local business site such as Gumtree to targeting on 20 cities selected across UK. The company will offer 100 free websites at each targeted city. This campaign will be implemented in 24 months with aims at getting 2000 customers. It is unique and very strong on the market. The cost per engineer-based design for business website is approximately about 120 for 10 pages of professional website. Other companies offer automatic tool for building website with
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hosting such as 1&1. This method is only suitable for personal website purposes rather than business website. Therefore, with free website design by staff, the company will gain competitive advantage with other competitors. Buy one get one free: customer will be motivated by hosting one year, get free one year. In the other word, this option encourages customer pay one year service at the time registering with company. Along with advertising, these promotions are keen to convince the customer to the company service. 7.4 Pricing Competitive price will be based on low cost of staff and capital investment. The company webhosting services will build competitive advantages from customer support services, free website development and industrial service standards. By investing on software and tools for services provided, price of service will be set the lower than market leaders in this industry such as iPage, 1 & 1, Godady.... see table below for reference
Saba 1&1 Godady Winhost 2.49 4.99 5.99 3.50

Price

The strong marketing campaign along with price policy above will create a unique competitive advantage for the company service over other companies on the market while the quality and feature of the companys services for them at least the same with other offers. 7. Suppliers and partners Hardware: The Company will rent two dedicated servers from REDSTATION which is the best offer from market research. This company is offering very good hardware, standard and cost comparing with the others. Online Payment: The Company will use PAYPAL services to get payment from customer. Standard PAYPAL service will be used instead of using Pro PAYPAL service without out monthly cost. Later, it is convenient for customer, company image and reputation, Pro Paypal service should be used for method of payment. Backup service: backup service must develop associated with all resources, including company data and customer website. After starting up, the company should use backup service provided by Bacula or R1 Soft for this function. To save cost, company will temporary do it on servers rented. However, when getting enough customers, the backup service should be used. Software: to offer the service with webhosting industry standard, the company has to use different software for its service and customer support. With affordable price and quality of software used by other reputable webhosting companies, the software should be used as follows: a. Nagios: This software will be is used to manage servers and running status. The Nagios tool offers many functions for staff to mange real time quality of services and support for customers websites. Nagios is free for small business enterprise with limitation of seven hosts (severs). It is significantly applicable in the first two years of business with expected that business growth up two seven servers after two years. b. WHMCS: it is the billing software or shopping cart. It must use to sell online webhosting service as almost company used for their business.
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c. Window OS: The company will offer window hosting platform at beginning and later will move to Linux platform. Window OS server will be used in servers rented. The second option could be considered by renting license of Window OS and doing monthly payment for Redsation to save investment. d. Hosting controller: Hosting controllers selected for control panel tool that customer will use to manage their website bases on price and automation of services on the future. When starting up, the company will offer window-based hosting however Linux-based hosting will be developed when market is clear on business customer. e. Mailenable: Mailenable is used to build professional Email server. Although other free software could be use to offer Email service for customer. However the Mailenable should be used to build competitive advantage for the company service when onetime buying could be use for unlimited customer. Only reputable companies use this email server for their services with focusing on business customers. Business customer is more sustainable than personal or private uses and requires professional services. f. Database: the company will offer databases on its services, including MSSQL and MySQL. MS database will be used to offer database services for customers. For web application on window platform, beside MySQL is free, MSSQL has to offer for business website such as CMS or E-commerce. To save cost like window OS, the software can be rented and made monthly payment for Redstation where servers will be rented. g. Kayako: as market leader to provide knowledge base on webhosting, customer support ticket system, sale inquiry, live chat and teamwork support for customer, this software must be used for the company services and operation. Although other solution might be cheap but they lack of services should offer for customer. Because customer service and quick respond is the key to satisfy customer in this industry with standards of 24/7 running. Therefore a recommendation for using Kayako is strong. In addition, this system is the way how management and operation have been conducted for this business. 8. Initial tasks and Operation 8.1 Setup tasks Webhosting website: Company website will be designed and developed by Vietnamese staff. They also provide scripts for integrating and configuring all functional software on the company website. Partner and supplier contact and service: managers will contact with suppliers to make orders related to building services for company. Main suppliers include Redstation for renting servers, Kayako for support service, Domain reseller club for selling domain name, Hosting controller for control panel, Paypal services for payment, ... Configuration server and services: Vietnamese staff will responsible for this configuration and setup webhosting packages followed by directing from technological lead at the company. Customer service development: Building Knowledge bases on website by using Kayako system and training staff for sale and support services.

8.2 Operation: Customer support and managing hosting servers will be provided by Vietnamese staff for 24/7. When the system receiving an order, it will be processed soon after payment confirmed.
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Other tasks will be done to activate customer account. The Kayako system will be official form and working environment for teamwork when it provides professional cooperation and operation associated with webhosting services. Kayako system also provides all tasks related to customer support and inquiries. Vietnamese staff in charges of technical works and jobs related to all services offered. Sheffield group will focus on marketing and customer sale inquiries, and technological tasks. The structure for operation is illustrated in diagram below.
Webhosting services

Webhosting Technology

Sheffield Group

Vietnamese technical group

Marketing

Sale Managing system Customer support Design and development

Customer & market

Model of business operation 9. Investment and financial projection 9.1 Capital investment
No Items Quantity 1 1 1 2 1 1 Cost 650 300 700 800 1,200 220 Total Notes

1 Support system 2 Control panel 3 Mail system 4 Window OS server 5 MSSQL server Billing and shopping 6 cart Total

650 Onetime payment & 5 concurrently working staffs Two servers with capacity serving 1000 customer, 300 approximately 700 Unlimited domain, mailbox per server 1600 For two servers with capacity for 1000 customers 1200 for one server, not limited customer 220 Onetime payment for unlimited customer 4670

Cost of goods sold and other main costs Some initial projection has been developed from market research and forecast as followings:
Year I Marketing Rent Items Website development Advertising Renting servers Quantity Cost month Total 100 120 12 144000 1 500 12 6000 2 80 12 1920

Year II Marketing

Rent

Items Website development Advertising Renting servers and others

Quantity Cost month Total 100 120 12 144000 1 500 12 6000 2 80 12 4800

Notes: Website development will be covered by Vietnamese staff. Actually, the cost of goods sold excludes this item. There are more than 2000 website with total cost of website development for customers who buy the service will be 30,000 approximately. This amount is strong and unique for this business to compete on the market. Therefore, customer forecast are based on this foundation.

Customer Forecast

Month Year 1 Year 2 year 3

Year I

1 10 950 2100

2 20 1050 2200

3 40 1150 2300

4 80 1250 2400

5 150 1350 2500

6 250 1450 2600

7 350 1550 2700

8 450 1650 2800

9 550 1750 2900

10 650 1850 3000

11 750 1950 3100

12 850 2050 3200

Month Sale Rent technical Staff cost Operation cost Margin Marketing cost Total
Year II

1 24.9 200 4.9 204.9 -180 500 -680

2 49.8 200 9.8 209.8 -160 500 -660

3 99.6 200 19.6 219.6 -120 500 -620

4 199.2 200 39.2 239.2 -40 500 -540

5 373.5 200 73.5 273.5 100 500 -400

6 622.5 200 122.5 322.5 300 500 -200

7 871.5 200 171.5 371.5 500 500 0

8 1120.5 200 220.5 420.5 700 500 200

9 1369.5 200 269.5 469.5 900 500 400

10 1618.5 200 318.5 518.5 1100 500 600

11 1867.5 200 367.5 567.5 1300 500 800

12 2116.5 200 416.5 616.5 1500 500 1000

Total 10333.5 2400 2033.5 4433.5 5900 6000 -100

Month Sale Rent Technical staff cost Operation cost Margin Marketing cost Total

1 2340.6 600 465.5 1065.5 1275.1 500 775.1

2 2564.7 600 514.5 1114.5 1450.2 500 950.2

3 2763.9 600 563.5 1163.5 1600.4 500 1100.4

4 2913.3 600 612.5 1212.5 1700.8 500 1200.8

5 2988 600 661.5 1261.5 1726.5 500 1226.5

6 2988 600 710.5 1310.5 1677.5 500 1177.5

7 2988 600 759.5 1359.5 1628.5 500 1128.5

8 2988 600 808.5 1408.5 1579.5 500 1079.5

9 2988 600 857.5 1457.5 1530.5 500 1030.5

10 2988 600 906.5 1506.5 1481.5 500 981.5

11 2988 600 955.5 1555.5 1432.5 500 932.5

12 2988 600 1004.5 1604.5 1383.5 500 883.5

Total 34486.5 7200 8820 16020 18466.5 6000 12466.5

Year III

Month Sale Rent technical Staff cost Operation cost Margin Marketing cost Total
-

1 5229 1000 1029 2029 3200 500 2700

2 5478 1000 1078 2078 3400 500 2900

3 5727 1000 1127 2127 3600 500 3100

4 5976 1000 1176 2176 3800 500 3300

5 6225 1000 1225 2225 4000 500 3500

6 6474 1000 1274 2274 4200 500 3700

7 6723 1000 1323 2323 4400 500 3900

8 6972 1000 1372 2372 4600 500 4100

9 7221 1000 1421 2421 4800 500 4300

10 7470 1000 1470 2470 5000 500 4500

11 7719 1000 1519 2519 5200 500 4700

12 7968 1000 1568 2568 5400 500 4900

Total 79182 12000 15582 27582 51600 6000 45600

Technical staff cost: projected by 20% of revenue per customer Marketing promotion: buy one get one free impacts on revenue from second year. Only new customer registered with company is calculated for revenue. Since third year, revenue is calculated by price multiplies with number of customer. Cost of marketing is very strong to attract customer. Beside 2000 customer is free with 120 per website design, this amount for advertising on Google and local news paper and other applicable forms will be effective to reach target market. The business will be balanced after seven month. Positive profit will come from the second year. The need for cash will ended after 6 months when getting about 200 customers registered with company services.

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