7/14/2011
UNIVERSITY OF
SASKATCHEWAN
BUSINESS PLAN
iAccountant Inc. | Chauncey Beggs, Lindsey Frostad, Sarah Malo, Jeff
Martens, Nadim Merali
CONTENTS
Executive Summary .......................................................................................................................................................3
Operations Plan .........................................................................................................................................................3
Marketing Plan ..........................................................................................................................................................3
Human Resources Plan ..............................................................................................................................................3
Financial Plan.............................................................................................................................................................3
Introduction ...................................................................................................................................................................4
Mission Statement ................................................................................................................................................4
Industry Overview .................................................................................................................................................4
Operations Plan .............................................................................................................................................................5
Summary ...................................................................................................................................................................5
Primary Features .......................................................................................................................................................5
Technological Backend and Costs .............................................................................................................................6
Approximate Initial Timeline .....................................................................................................................................7
Marketing Plan ..............................................................................................................................................................8
Product ......................................................................................................................................................................8
Price...........................................................................................................................................................................8
Promotion .................................................................................................................................................................8
Place ..........................................................................................................................................................................9
Segmentation, Targeting, Positioning .......................................................................................................................9
Competitor Analysis ..................................................................................................................................................9
Human Resources Plan ................................................................................................................................................10
Job Descriptions ......................................................................................................................................................10
Planned additions and deletions of personnel ........................................................................................................10
Training Programs ...................................................................................................................................................11
Costs ........................................................................................................................................................................11
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iAccountant Inc.
Strategy ...................................................................................................................................................................11
Financial Plan ...............................................................................................................................................................12
Projected Financial Statements ..........................................................................................................................12
Cash Flow Analysis ..............................................................................................................................................12
Risk Analys ..........................................................................................................................................................12
Financing Plans ...................................................................................................................................................13
Assess Feasibility of the Plan ..............................................................................................................................14
Bibliography .................................................................................................................................................................15
Appendix 1 - Financial..................................................................................................................................................16
Appendix 2 – Organizational Structure ........................................................................................................................17
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iAccountant Inc.
EXECUTIVE SUMMARY
OPERATIONS PLAN
iAccountant is a startup company based on developing and marketing accounting software to environmentally
aware small business entrepreneurs who would rather focus on the business operations than spend time doing
accounting functions.
We have developed a 5 year time line to show how we plan on developing our product.
MARKETING PLAN
Marketing will start once we have a beta version of our cloud based system up and ready for testing.
There will be sales personnel in major Canadian cities to help sell/market the product and get small businesses set
up with it.
HUMAN RESOURCES PLAN
We will be hiring software developers to make iAccountant, sales personnel, as well as staff for the support center.
Our biggest expense will be salaries and wages.
We plan on retaining top talent by offering a profit sharing plan which will motivate our employees to do their best
to ensure that we are making profit by our targets.
FINANCIAL PLAN
Our key success factor is achieving and maintaining a user base. User base is synonymous with revenues in our
business and if we cannot get the critical mass necessary to break even, we will need to find a way to inject cash in
year 3.
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iAccountant Inc.
INTRODUCTION
iAccountant’s history is relatively short as it is a new start up with a great plan we are about to share with you.
There are five shareholders who have thus far invested $500,000 into the business. All of the shareholders have a
business background specializing in the technology industry.
The nature of business is such that it has to reach a critical mass of users in order to be profitable. This can be seen
in many other online ventures.
MISSION STATEMENT
Our mission is to be the preeminent online based accounting suite for small business owners, focusing on ease of
use so they can focus on expanding their business.
INDUSTRY OVERVIEW
Within the industry there are some online and desktop based competitors. Each has strengths and weaknesses but
none of them integrate the entire accounting experience like we will.
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OPERATIONS PLAN
SUMMARY
iAccountant is an online accounting and business process management product targeted towards small businesses
with modern owners who desire to minimize the use of paper within their accounting and basic business
processes.
PRIMARY FEATURES
Module
General
Feature List



Sales and A/R





Purchases and A/P –
Vendors



Personalized accounting website which can be hosted on your own domain or
ours (all hosting is still on our servers)
Supports two currencies (basic) or multiple currencies (additional charge)
Granular security profiles for multiple users (e.g. A/R clerk, A/P clerk, fixed
assets clerk)
Generate customized invoices electronically and send them to your customers
through email or fax (fax is an add-on option)
Customers can login to a special part of your website to view their invoices
(both outstanding and paid) and can pay the invoices electronically (e.g. credit
card, PayPal, online Interac)
Invoices which are paid electronically are automatically processed by
iAccountant as having been received and it will update the corresponding
subledgers. A payment receipt will be issued automatically.
Electronic invoice tracking including viewing when your customers have
viewed invoices, automated late payment reminders and monthly statements
are sent to customers
Can set scheduled, recurring invoices to be sent to customers automatically
Online bill payments to suppliers are facilitated, tracked and categorized
automatically
Suppliers can post invoices directly onto your iAccountant site, which are then
kept for review by the A/P clerk and can be processed and paid electronically
An Advanced A/P module allows integration with large vendor systems (e.g.
Oracle, SAP) which require customers to login to their system
Purchases and A/P –
Employee Expenses


Electronic expense form submission and approval system
Links to Payroll Module for automated reimbursements through direct
deposit
Treasury



Automatically import bank transactions from online banking or through file
upload
Automatically updates cash balances from online banking and matches to
corresponding expenses or invoices
Automated notifications on cash shortages and large deposits or payments
Perform bank reconciliations

Add fixed assets; track and process amortization schedules automatically (e.g.

Fixed Assets
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monthly, yearly), and remove when disposed of or when no longer in use
(gain/loss calculated automatically)
Taxes


Assisted GST/HST tax return form completion
Export data to GIFI/tax codes for import into tax software
Reporting


Easy automatic reporting system which shows income statement, balance
sheet, cash flows, and more with comparatives
Automatic basic business feedback (e.g. cash cycle is too long; paying A/P too
quickly and not using credit terms from suppliers; not collecting A/R quick
enough; etc.)
Generate reports in Excel spreadsheet format
Accountant


Support for manual journal entries
View and drill-down into subledgers, general ledger and general journal
Mobile Apps

Apps for BlackBerry, iPhone, and Android for owner/managers (secure
connections still used)
Add-on Modules


Will integrate with certain other websites (e.g. Salesforce.com)
Custom modules can be purchased by customers and will be developed by our
team
Other Features

Import past accounting records from Simply Accounting or QuickBooks
software

TECHNOLOGICAL BACKEND AND COSTS
iAccountant will run on high quality, cloud-based servers which are geographically located close to the largest
customer bases. This will increase the speed and efficiency of the website.



Hosting can be scaled on demand through our private cloud infrastructure thereby reducing the risk of
high demand overwhelming the server load
Users access the service through any modern web browser (e.g. Google Chrome 12+, Firefox 4+, IE9+)
Cost is approximately $1.00 per user per month for completely managed, private, scalable hosting
Top tier security methods will be used to ensure that all information is kept safe, confidential and is only accessed
by appropriate individuals.




512 bit SSL encryption will be used to secure all transmissions of data between the end user and the
servers. Data stored on the servers will also be secured within encrypted hard drives.
All users are authentication and authorized in a two-step process (on par with modern online banking
practices) to ensure that only appropriate individuals have access to data. Highly secure passwords are
enforced.
High quality, up-to-date firewalls and anti-virus are used to ensure data reliability and protection.
Data protection in the form of complete daily backups, plus transactional backups every 15 minutes.
o Physically protected servers with security guards and physical authorization and access processes
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Hired developers will be the heart of the technological core operations


4 total develops will be hired: one lead and 3 core developers
Cost: $100,000 for lead (partially allocated to management salaries) plus $80,000 per core developer
($320,000 per annum total)
APPROXIMATE INITIAL TIMELINE
1 Year
• Base
modules
complete,
full tested
and
operational
• Beginning
to sell
product to
customers
2 Years
• Full feature
set
complete
(as
indicated
above)
• Establish
moderate
user base
After
• Develop
additional
features
and
services
• Expand
user base
through
agressive
marketing
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iAccountant Inc.
MARKETING PLAN
PRODUCT
iAccountant is based as an online Cloud Accounting Program.
Basically, this is a consolidated ERP Program so everything is online. This means that no software is required to be
downloaded or installed on users systems.
The program provides a full suite of invoicing, receivables, payables, as well as business analysis. The program also
provides cash flow analysis to clients that are not necessarily fluent in accounting. This allows small business
owners to focus on making their sales, rather than worrying about whether accounting procedures are being
performed completely reliably and correctly.
As this is an online program, it will allow the business to run paperless and therefore allow customers to make
payments to the business online while also allowing the business to link with their payments with their online
banking company.
The basic module available to all companies includes all accounting functions (receivables, payables, bank
reconciliations, financial statements, etc.), time tracking of the receivables and payables functions, as well as
business analysis features. Additional module pricing will vary based on the complexity of the modules. These
modules include tax estimation, inventory management (if demand is high enough), and additional segmented
business operation analysis (2 operating lines included in basic package).
PRICE
In order to enter the market, an average price will be established at $50/month plus any additional modules that
are required on an individual basis. This price is based on iAccountant providing the entire back end accounting
work. The client is responsible for telling us when and to whom the company makes a sale, as well as when
payment is received. The rest will be done by the online program. Reminders for payment will be issued by
iAccountant on outstanding invoices at the month end, if the go-ahead is provided by the corporation.
Additional modules would be available on a monthly basis for an additional $20/month for each module.
PROMOTION
Sales people will be located initially in most major Canadian cities such as Vancouver, Edmonton, Calgary,
Winnipeg, and Toronto. Each city will have between 1-3 salespeople on location to promote the company as well
as discuss the benefits. These individuals will also assist the customers in beginning their business operations
paperless through iAccountant, as well as providing a tutorial. These services are provided to the clients for no
additional charge above their monthly fee, but would require a sales agreement of 2-years upon initial signing.
Another form of promoting our product is to advocate the environmentally friendly nature of iAccountant versus
traditional paper-based accounting programs such as Quickbooks or Simply Accounting. iAccountant provides all
backups for the data as well as handles all invoicing and payments, therefore requiring the company to use
minimal paper in their accounting processes.
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iAccountant Inc.
A call centre is to be established in Winnipeg, MB providing services to clients from 8am-8pm EST Monday-Friday
with the possibility of limited hours on Saturday if demand requires. The call centre hours will be tailored once
peak demand hours are established. The fee for the call centre help is included with the monthly fees. However,
online assistance can also be provided to the client if they are having difficulties outside of regular office hours.
PLACE
iAccountant is an online system that will be established at www.iaccountant.com. This website/product is directed
towards small business with limited accounting knowledge but can be adapted to be used by medium sized
companies.
SEGMENTATION, TARGETING, POSITIONING
iAccountant is marketing its product at small start-up businesses. As this is an environmentally friendly company,
we are directed at a younger environmentally conscious, technologically savvy generation of entrepreneurs.
The market will be targeted directly by salespeople at conventions, workshops and discussion forums around their
location bases.
Our brand imaging will revolve around the idea that our i’s are on accounting, so the client’s i’s can remain on the
business. By sticking to this image, we demonstrate our focus to easing accounting operations for startup clients.
“Our i’s are on accounting so your i’s can stay on the business”. “Where are your i’s?”
COMPETITOR ANALYSIS
Our main competition is Quickbooks, Simply accounting and Freshbooks. With each of the above competitors, they
offer either too much or too little for accounting software. With Quickbooks and Simply, there are high initial fees
as well as upgrade fees and fees for support. We get away from all of this by charging one monthly fee. These
programs are also more complicated and overkill for what our potential clients will need or want.
Freshbooks would be our most direct competition because they are a online accounting program but they do not
have integrated invoicing or other features that we have implemented.
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iAccountant Inc.
HUMAN RESOURCES PLAN
JOB DESCRIPTIONS
Support Center personnel


Answer questions and provide assistance
Long-term: If there are recurring problems with the software, report to Computer Programming team
Marketing Professionals in each city


Day-to-Day
o Participate in discussions
o Scout for new client base
o Run workshops (set-up)
o Trade-fairs
Monthly
o Report to Management on ideas for software improvement from workshops
o General marketing update, if they are on track for budget numbers
Computer Programmers



Write the programming for the software
Deal with major issues that crop up
After programming complete, some will be retained for maintenance and monitoring purposes
Management Team




Finance & Accounting: Jeff
o Financing of the venture ie. Dealing with the banks, etc.
IT & Ops: Chauncey & Sarah
o Heading the Computer programming & support teams
Marketing & HR: Lindsey & Nadim
o Heading the marketing team and HR co-ordination
Everyone: Fundraising and selling an equity stake in the venture
PLANNED ADDITIONS AND DELETIONS OF PERSONNEL
Some Computer Programmers will be repurposed from programming the software to the customer support center
to deal with issues there as well as repurposed to general maintenance and repair of the software.
They will be the best to deal with people’s questions with regards to the software because they know it inside and
out and will be able to fix and update it as they have the skills to identify what patches should be released to fix
the majority of users issues.
As business expands, we will need to hire additional marketing personnel within the existing centers as well as
expand the personnel to new centers (such as Saskatoon, Regina, Kelowna, Grande Prairie, and Kitchener).
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iAccountant Inc.
TRAINING PROGRAMS
Computer programmers will be hired based on their skill, preference will be given to someone with
business/accounting background. Junior programmers will be hired if necessary and will be trained by senior
personnel.
Marketing representatives will be hired based on expertise with a preference given to charismatic business people
with information technology knowledge. Training will be provided on the iAccountant software as well as on sales
techniques and targeting demographics.
The support centre staff will be trained by iAccountant management team but will be hired based on their
technical knowledge of accounting and their expertise in information technology. Product training will occur
regularly to ensure these workers are able to give the best support on the iAccountant product.
COSTS
Our major costs which are outlined in the financial plan are the programmers that write the software and once it is
developed, the focus will be on highly trained marketing and sales people to ensure that we meet critical mass to
generate positive cash flows.
STRATEGY
How do you keep the best people?
1.
2.
Profit Sharing Plan
Sharing and Caring
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iAccountant Inc.
FINANCIAL PLAN
PROJECTED FINANCIAL STATEMENTS
Based on our base case of financial statements, we will not have positive net income for at least the first 5 years of
operations, which is normal in the online applications industry. Companies that have not made a single dollar are
valued at billions of dollars because of their user base and the potential they have. If we grow by at least 125% per
year on our user base, we will be profitable in year four.
CASH FLOW ANALYSIS
Based on our cash flow projections of starting off with $3.5 million, are going to need to bring in additional
financing in year four to fund losses if iAccountant does not gain enough users.
RISK ANALYSIS
Our biggest risks are:
1.
2.
Existing companies copying our idea and bring it to market faster than we can and thus making
iAccountant obsolete before it is ever released
Not gaining enough users to make us profitable
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iAccountant Inc.
FINANCING PLANS
Our financial plans are to be efficient at developing our application and have a well trained sales force.
We will have $500,000 in equity financing and $3,000,000 loan with $300,000 payments plus interest per year.
Most of our costs are fixed:
Programming Personnel
-
-
168,100
172,303
176,610
Marketing/Sales Personnel 80,000
160,000
284,000
504,100
894,778
Commissions @ 2% of
revenue
-
3,600
11,700
26,325
59,231
Payroll Burden
29,320
35,770
45,461
62,210
91,478
Support Center
-
124,800
127,920
131,118
134,396
Management Team Salary 150,000
153,750
157,594
161,534
165,572
Training Costs
30,000
30,750
31,519
32,307
33,114
Depreciation/CCA
77,333
130,133
140,393
149,442
157,542
Interest
240,000
216,000
192,000
168,000
144,000
Total Costs
556,653
803,554
1,106,155
1,353,493
1,801,531
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iAccountant Inc.
ASSESS FEASIBILITY OF THE PLAN
Our plan is feasible like any other internet start up out there. There are many risks, especially with having enough
cash on hand to be able to get to the point where we can generate positive cash flows from our user base.
Overall, this plan is feasible.
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iAccountant Inc.
BIBLIOGRAPHY
Wilson, J. L. (2010, May 13). The Best Small Business Accounting Software. Retrieved July 7, 2011, from
PCmag.com: http://www.pcmag.com/article2/0,2817,2363725,00.asp?obref=obinsite
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APPENDIX 1 - FINANCIAL
Please see the attached excel document.
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APPENDIX 2 – ORGANIZATIONAL STRUCTURE
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