Business Plan Sample 1

Company Logo

Contact:
xxxx Xxx, CEO

XxxConsulting Nigeria Limited
xxxxxxxxxxxxxxxxxxxxxxx.

Tel: xxxxx, email: [email protected]
www. xxxxx.co.uk

CONFIDENTIAL - DO NOT DISSEMINATE
This business plan contains confidential, trade-secret information and

is shared only with the understanding that you will not share its
contents or ideas with third parties without the express written

consent of the plan author.

© 20xx xxxx. All rights reserved 3
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Table of Contents 4

Executive Summary.................................................................................... 6
Business and Company............................................................................... 8

Preface .................................................................................................. 8
Our Commitment .................................................................................... 8
Our Mission ............................................................................................ 8
Our Vision .............................................................................................. 8
Our Values ............................................................................................. 8
Industry ................................................................................................. 9
Legal Form and Ownership...................................................................... 9
Location and Facility ............................................................................... 9
Management ........................................................................................ 10
Personnel ............................................................................................. 10
Key Partners......................................................................................... 11
Products and Services .............................................................................. 14
Preface ................................................................................................ 14
Products and Services ........................................................................... 14
Pricing ................................................................................................. 16
New Product and Service Development .................................................. 16
Market Analysis........................................................................................ 18
Preface ................................................................................................ 18
Market Geography & Size ...................................................................... 18
Potential Target Market Size .................................................................. 23
Penetration and Potential Customers Number ......................................... 25
Competition Analysis ................................................................................ 26
Preface ................................................................................................ 26
Main Competitors.................................................................................. 26
Market and Competition Future Trends .................................................. 28
SWOT Analysis ..................................................................................... 29
Strategy – Master Plan ............................................................................. 30
Business Opportunity ............................................................................ 30
Overall Strategy.................................................................................... 33
Short Term Goals.................................................................................. 34

Locations, Facilities & Infrastructure ................................................... 34

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Equipment & Technology ................................................................... 35
Human Resources ............................................................................. 35
Marketing ......................................................................................... 35
Total Budget - Investment .................................................................... 35
Sources of Funds............................................................................... 35
Use of Funds..................................................................................... 35
Marketing ................................................................................................ 36
Marketing Objectives ............................................................................ 36
We need to be established as experts................................................. 36
We need brand name reference clients ............................................... 36
We need to explore clients from most developed states ....................... 36
Marketing Mix....................................................................................... 36
Product / Services ............................................................................. 36
Pricing .............................................................................................. 36
Promotion ......................................................................................... 37
Distribution ....................................................................................... 38
Selling Philosophy ................................................................................. 38
Financial Projections................................................................................. 39
Key Assumptions .................................................................................. 39
Total Investment............................................................................... 39
Additional Personnel Cost................................................................... 39
Office, Facilities and Infrastructure ..................................................... 39
Equipment and Technology................................................................ 39
Marketing ......................................................................................... 39
Base Expenses .................................................................................. 40
Sales Plan ............................................................................................ 40
Budget Forecast ................................................................................... 41
Break Even Point .................................................................................. 43
Apendix 1: IT Companies List ................................................................... 47
List A ................................................................................................... 47
List B ................................................................................................... 51
List C ................................................................................................... 54

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Executive Summary

The purpose of this plan is to outline what our business would look like within
the next three years, given the implementation of our expansion strategy.

Our company, XxxConsulting is a software development firm based in Kaduna
State, Nigeria and in business since 2012. Our mission is to produce excellent
services in the field of IT Services and Consultancy, while we vision to build on
our reputation, being one of the most innovative IT Solution and Service
providers in the country.

Although, competition exists through departments of large IT companies –
either multinational blanches or big local players and a relatively confined
number of small specialized IT houses, there is lack of specific personalized
solution provision. Most of the competitors have readymade software (usually
build abroad) or try to fit client’s needs to what they have available to sell.

We are a specialized solutions provider. We analyze our client’s needs, we
understand what specific issues different companies in different sectors have
and we tailor made our solution to each client.

Nigeria has become Africa’s largest IT market, accounting for 29% of Internet
usage in the continent. IT market in Nigeria is large and growing. An
estimation of the country’s total IT spending for 2016 is $5.3 billion while for
2017 it rises to $6 billion showing an annual increase of 13%. Our government
shows a strong political will to proceed with IT reforms in many sectors of
economic life (e-government, e-health, e-education, etc), while private
economy is looking the same direction as well (e-agriculture, e-commerce,
cloud computing, etc). Market and business opportunity is clear.

We set an ambitious strategy: to expand all over the country with an
implementation plan fit to help our effort. We will invest in people because it
is human capital that will help achieve our target, in technology because it is
our vehicle to provide solutions and in marketing to open paths and make our
advantages known to our country’s business community – private and public.

Market Expansion Business
Opportunity Through Opportunity
Concentration
Strategy

Human Capital 6
Technology
Markerting

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Our product / service itself is a key component to our marketing mix. Our
marketing mix is carefully built to support our expansion strategy. We chose to
keep our product mix and pricing constant for the next three years and focus
in increasing the client’s number by geography segment, business sector and
size. Our product / service will be our best advertisement. Our promotion
strategy focuses heavily on Business Development, Direct Marketing and Public
Relations, with very little or no emphasis on traditional advertising.

Our financial projections look promising. We will make all necessary
arrangements within Q2 2018 in order to start materializing our strategy even
from Q3. Our target is to be ready and start fully harvesting benefits from our
plan in 2019. We project revenues for the current year at $167,713 and for
2019 $243,500 when our business will start cruising full speed. Projected
revenues will climb at $347,000 in 2021 a feasible target that is supported by
our market analysis.

350.000 Projected Revenues
300.000 Projected Expenses
250.000 Projected Profit
200.000
150.000
100.000

50.000
0

2018 2019

2020 2021

In order to support our strategy and business plan, we estimated a total budget
of $54,000. We will seek external investment to support our $54,000 budget
against our company’s equity with a buy back clause, offering the investor a
total 20% Return on Investment. Buy back will be set to be concluded in
January 2022 so, investment principal plus interest will be paid by 2021.

© 20xx xxxx. All rights reserved 7
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Business and Company

Preface 8

XxxConsulting is a software development company based in Kaduna State,
Nigeria, incorporated in 2012. Our company began operations in July 2013
providing software solutions in the retail, fashion, healthcare, real-estate and
FMCG sectors, supporting mainly Small and Medium size Enterprises (SMEs).
Our customer base currently spreads out across 10 states, in 4 geopolitical
zones of Nigeria and we have presence across the country through our alliance
partners.

With a rare mix of domain, technology & project management experts, we bring
the most complete team to bear on every project we take on. Business &
technology experts, from some of the best universities in the country, bring
invaluable insights and expertise. Industry veterans, who laid the foundation of
the offshore services business, form the backbone of our leadership team.
Having built a business model where people are the growth drivers, we are
endowed with one of the most enviable pool of talent from across the country.

Our Commitment

Our approach focuses on new ways of doing business, thereby combining IT
innovations and adoption while leveraging an organization’s current assets.
Our team is committed to provide IT Services underpinned by top Quality in
every project we undertake as well as competitive edge Technology,
methodological Innovation and 24/7 Support to all our client base.

Our Mission

Our mission is to produce excellent services in the field of IT Services and
Consultancy with a strong focus on customer satisfaction.

Our Vision

Our vision is to build on our reputation, being one of the most innovative IT
Solution and Service providers in the country. We believe in doing our work in
the most efficient way with robust and structured methodology and a deliberate
evolution from hard-work to smart- work culture.

Our Values

We aim to be the best at what we do and we dream to evolve into a Global IT
Company, ensuring that the solutions we deliver include best practice in I. T.

© 20xx xxxx. All rights reserved
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with the chosen area of technology and our organization remains standing on
the strong pillars of integrity, honesty and self-respect. Our values lay on:

Quality
Technology – Innovation
Customer Satisfaction - Win together

Industry

Xxxis an Information Technology / Solution Provider company, focusing on web
designing, web applications and mobile applications as well as on outsourcing,
cloud hosting and training services.

IT is an emerging market in Nigeria. At 34 percent annual average growth rate,
the Nigeria’s information and communications technology (ICT) sector
contributes nearly 12% to product, and is considered one of the fastest growing
sectors in Nigeria, and the second largest ICT market in Africa1. By this year,
the Nigerian government is targeting over USD $50 billion in new ICT
investments2.

Today, the country of 195 million people (2018 estimation) has 98.4 million
internet users (50.2% penetration rate), 17 million Facebook users (Dec/2017,
8.7% penetration rate)3 and is Africa’s largest mobile market, with about 142
million subscribers4.

Legal Form and Ownership

Xxxis a Registered Limited Liability Company (Registration No: 937366 / Feb
2011) owned by Mr. Xxx Xxx, who is also the CEO.

Location and Facility

Our company’s headquarters are in xxxxxx, xxxx State. We have adequate
office space, fully furnished and equipped with the usual ICT infrastructure,
Virtual Servers (Just Host, Microsoft Azure, Amazon EC2 and Siteground), a Dell
Core i7, 6th generation Local Server, Laptops and Printers. Also, we use
Development & Licensed Platforms (Moqups, Sublime, Netbean and CodeRepo)
and we have two company vehicles for sales and customer service.

1 www.export.gov/article?id=Nigeria-Information-and-Communications-Technology 9
2 www.invest-nigeria.com/nigeria-targets-50-billion-ict-investment-2018/
3www.budde.com.au/Research/Nigeria-Mobile-Infrastructure-Operators-and-Broadband-

Statistics-and-Analyses
4 www.internetworldstats.com/stats1.htm

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Management

Our company’s top management includes:

Mr. Xxx Xxx, CEO and Head of Software Development
Mr. Xxx has a background in banking (technology) and telecoms (technology),
spanning over a decade and a half. He proceeded to launch XxxConsulting in
2012. As head of business development he has a strong bias for ensuring
customer requirements are met and exceeded with a can-do-approach.

Mr. Xxx’s academic background includes a B.Eng in Mechanical Engineering
(2004) from Ahmadu Bello University, a MSc in Information Systems
Management (2008) and a MSc in Software Development (2009) from
University of Manchester, UK.

xx xxx xx – Head of Infrastructure Deployment
Mr. xx worked for 2 years at Intechnica Ltd (2 years) as a Junior DevOps
Engineer, providing support to the product team as well as other general
Infrastructure support, largely consisting of multiple AWS EC2 instances. Also,
worked at AJ Bell for 2 years as a DevOps Engineer providing a bridge between
developers and Sysadmins in order to provide improvements to the Software
development life cycle and release of software in an environment largely
consisting of Windows servers. At Aj Bell was also responsible for knowledge
transfer to key technology projects being undertaken by the business. Finally,
he worked for 2 years at High Voltage Partial Discharge Ltd as IT and Software
Support providing support for the internal Windows based IT system as well as
support for development, deployment and documentation of bespoke
embedded Linux microcontrollers and servers.

Mr. xxx academic background includes a BSc Electrical Engineering from
Ahmadu Bello University, Zaria and a MSc in Information Security and
Management from University of Manchester, UK.

Personnel

Apart from our top management, Roundstones key personnel includes:

Mr. xx xxx– Head of Support 10
Mr. xxxx is focused on the development and effective management of
information systems using the latest technologies. With several years of
experience, he possess the ability to think and act innovatively in integrating
the technical and business aspects of information technology in order to spawn
new ideas, methods, processes and products thereby creating value for
customers, owners, and society in general.

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Mr. xxxxx academic background includes a BSc in Information Technology from
Eastern Mediterranean University, UK and a MSc in Computer Information
Engineering from Robert Gordon University, UK.

Mr. xxxx xxx – Developer 1
Mr. xxxx objective is to strive for excellence at all times, in all positions and
circumstances to contribute efficaciously, the best of my ability and quota to
improve and achieve Xxx objectives, with his thirst to improve his acquired skills
(Microsoft expert, Vast in Internet skills, Social Media Marketing, Urban,
Regional & Geographical Planning, GIS Application Expert)

Mr. xxxxx Axxxxdogo – Support 1
Mr. xxxxx is a driven IT professional with a myriad of technical and
management skills. He understands technology relationships and best practices
required for web platform configuration and application deploy processes. He
has exceptional interpersonal and team building skills with a demonstrated
ability to interact professionally within diverse group settings and has the ability
to handle sensitive matters with tact, poise and diplomacy while maintaining
an exceptional rate of productivity, accuracy, and efficiency.

Key Partners

Our key partners include a varied range solution providers. With expertise in
IT Solution domain to high end marketing service providers, we have strategic
alliances with companies who have taken technology driven solutions to a
completely new level of experience for clients.

Based on the type of solutions provided, Xxxalong with its partners, share
processes to deliver the best and the most suitable solutions to clients. xxxxxx
Services and business solutions are strengthened by alliances with leading
solution partners. This amalgamation of business solution processes has given
an advantage to Xxxand its partners a leading edge in providing business
solution with a global orientation.

Our key partners are:

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YABTech Ltd,
Lagos Nigeria

YABTech helps companies meet their IT &
communication needs, be it outsourcing

development and maintenance work, or VOIP
solutions for corporate. YABTech aims to

innovate and provide easy to use IT solutions
for corporates. YABTech focuses on user
friendliness of technology, an aspect often
overlooked, in the race for the latest
technology.
www.yabtech.com

XCALLY
Torino, Italy

XCALLY is an innovative Omni Channel
solution that integrates Asterisk™ with the
Shuttle and Motion technologies, developed in
the Xenialab research center. The solution is
one of the best Contact Center management

platforms for multi-channel -
voice, chat, email, SMS, fax and custom
channels (social, video ...) - through standard
APIs. XCALLY is currently used in over 50
countries, thanks to its ease of installation,

setup and use.
www.xcally.com

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Tulassi Technologies Pvt. Ltd,
India.

Tulasi Technologies Pvt Ltd is one of the fast
growing IT services and industry solutions
providers with global delivery capabilities.
Tulassi Technologies provides software
solutions to a wide range of industries
including poultry industry, agriculture and
resource, Production and inventory etc.
Xxxhas had a 3 year partnership with

Tulassi as the West African representative of
the firm.

www.tulassi.com

Aris Creations,
Holland.

ARIS creations is a Holland based company
that specialize in Internet consulting, Web

designing, Video films, 2-D and 3- D
Animations, Digital Albums, Photo Animation,
online marketing. ARIS creations have always
delivered world-class quality, competence and
consistency in its flash animations and Xxxhas

a long standing relationship based on this.

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Products and Services

Preface 14

Over the last five (5) years, we developed a rich product and service mix to
fulfill the increasing and evolving IT services needs of the country. Information
Technology has changed the way people work and in the next 10 years, it will
be about transforming the businesses across all industry sectors to embrace
the digital era. Today, data is the new oil as the world’s biggest companies are
now technology-driven. Nigeria has become Africa’s largest Information and
Communications Technology market with sectors like e-commerce and cloud
computing witnessing huge growth.

In 2014, Nigeria became Africa’s largest economy and is projected to become
a global economic powerhouse in future. IT industry in Nigeria is estimated to
be among the fastest growing IT industry in the world and the country is
becoming a centre for big-tech investment and commercially oriented start-
ups.

Whatever the country’s challenges are, investors and entrepreneurs are
attracted by the prospect of scaling applications to Africa’s largest population
and economy and we will be there to offer our intergraded products and
services.

Products and Services

We are Solution Providers - a group of professionals focused on supporting
small and medium enterprises add value to their businesses, leveraging
information technology.

Knowing the real problems companies are facing today, we listen to our clients,
we observe their work and based on our experience wealth, we offer realistic
solutions aimed at helping to achieve their goals.

As a consequence, we designed an excellent product and services mix, which
is dynamic and changes as we sense and follow the market needs and today
includes three (3) core and five (5) supporting areas.

Our three core product and service areas are:

 Website Design

 Web Applications Development and

 Mobile Applications Development

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While our five supportive service areas are:
 Outsourcing
 Cloud Hosting
 Training
 Networking and
 Maintenance & Support

Core and Supporting Products and Services

Outsourcing Cloud
Hosting

Web Mobile
Applications Applications

Maintenance Training
& Support
WebSites

Networking

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The most recent list of applications we have is as follows:

 SMS based Automation & Notification System

 Case management system

 Billing system

 Call centre software

 Customer Support Software & Helpdesk Ticketing System

 Inventory/POS management software

 Office management software

 COOP, Poultry Management Software

Pricing

We operate in a very price sensitive environment. Our pricing strategy from
day one was to be moderately priced. Today, we keep up with this strategy
and compared to our major competitors, we are perhaps within the lower 40
percentile in terms of product pricing.

New Product and Service Development

We provide solutions. And as solution providers we almost never have a
readymade answer that fits all problems. Most of our applications are purpose
built and as such we rarely have situations where they completely fit more than
two clients' needs. Of course we have basic modules that we use as a template
for most developments. In many cases, we look for white label application we
can build on but if none exists, we build from scratch or from modules we
already have.

Our product and service development process is continuous. Every client is
unique and every problem the client has needs special approach and attention.
Our people research and develop new solutions constantly.

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New Product and Service Development

NEW
PRODUCT/SERVICE

Solution Launch People New Need &
(Product/Service) Idea Development
Product &
Service

Technology Systems

Solution Design Business Analysis
(Product/Service)

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Market Analysis

Preface

Nigeria has the largest market in Africa with a population of more than 195
million people (2018 estimation). As recently as 2014, McKinsey and Co. had
predicted that Nigeria had the makings to grow 7.1 percent yearly until 2030
and build a $1.6 trillion economy. In March 2016, PwC published a report,
“Nigeria: Looking beyond Oil,” that raises the Nigerian economy to the top 10
in the world in 2050 with a projected GDP of $6.4 trillion5.

Today, the country has a $0.5 trillion GDP and $1.12 trillion Purchasing Power
Parity GDP. The Nigerian economy advanced 1.9 percent year-on-year in the
fourth quarter of 2017, accelerating from a 1.4 percent growth in the prior
period. It is the third consecutive quarter of expansion and the strongest since
the fourth quarter of 2015, as the oil sector continued to recover6.

Our company is IT product and services provider to business entities in the
country. The total country is defined as our market, so in order to quantify it
we are exploring the business mosaic of Nigeria.

An estimation of the country’s total IT spending for 2016 is $5.3 billion7 while
for 2017 it rises to $6 billion8 showing an annual increase of 13%. It is a large
market; it is growing year after year and has a lot of potential and competition.

In our market size estimation process, we used all available data and produced
secondary data under the assumption that distributions are normal.

Market Geography & Size

GDP composition by sector of origin is agriculture: 21.6%, industry: 18.3% and
services: 60.1%, while work force by occupation distribution is
agriculture: 70%, industry: 10% and services: 20%9

According to Small and Medium Enterprises Development Agency of Nigeria
(SMEDAN), Micro Small and Medium Enterprises (MSMEs) were defined as
follows10:

5 www.export.gov/article?id=Nigeria-Market-Overview 18
6 www.tradingeconomics.com/nigeria/gdp-growth-annual
7 www.guardian.ng/technology/nigerias-it-spending-to-top-5-3-billion-in-2016
8www.venturesafrica.com/nigerias-inflation-rate-on-a-downward-trend-as-it-reaches-the-
lowest-in-19-months
9 www.cia.gov/library/publications/the-world-factbook/geos/ni.html
10 www.eajournals.org & www.smedan.gov.ng

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 Micro Enterprise: Any enterprise employing between one to nine people
and having a capital base from one naira to ₦5 million excluding cost of
land.

 Small Enterprise: Those that employ between 10 and 49 employees and
having a capital base from ₦5 million to ₦50 million.

 Medium Enterprise: Any enterprise that employs from 50 to 199 employees
and having a capital base from ₦50 million to ₦500 million.

Large enterprises are defined as those that employ more than 200 employees
and have a capital base of more than ₦500 million.

The total number of MSME’s is put at approximately 37 million businesses,
which constitute ~84% of the labor force and ~50% to GDP. Out of the total
37 million, 36.99 million are micro businesses, 68.2 thousand are small and 4.7
thousand are medium (2015 latest report on 2013 data)11.

As for large enterprises, having in mind the 177 companies listed in the stock
exchange, the 365 in the registrars list and all available internet information, it
would be safe to estimate their number close to 1,000. Most companies in this
category are banks, insurances, oil related, big retailers, pharmaceuticals,
telecommunications, manufacturers, etc.

This total number of businesses in the country is actually the total available
market for Roundstone. Based of course in certain characteristics like size,
location, industry and type, we will estimate our target market in terms of
quantifiable measurement.

As for geographical distribution, the following table presents micro, small and
medium companies by state.

STATE MICRO % SMALL % MEDIUM %

ABIA 904,721 2.45% 1,769 2.60% 40 0.86%
AKWA-IBOM 1,319,607 3.57% 898 1.32% 195 4.18%
1,223,395 3.31% 1,620 2.38% 117 2.51%
ANAMBRA 944,503 2.55% 2,039 2.99% 27 0.58%
BAUCHI 541,332 1.46% 354 0.52% 72 1.54%
BAYELSA 1,479,145 4.00% 1,146 1.68% 22 0.47%
BENUE 921,256 2.49% 1,126 1.65% 168 3.60%
CROSS RIVER 1,536,158 4.15% 1,444 2.12% 0.00%
DELTA 577,216 1.56% 1,206 1.77% 0 0.09%
EBONYI 898,084 2.43% 1,879 2.76% 4 2.53%
964,179 2.61% 903 1.32% 118 2.70%
EDO 126
EKITI

11 http://www.nigerianstat.gov.ng & www.smedan.gov.ng 19

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STATE MICRO % SMALL % MEDIUM %

ENUGU 1,064,893 2.88 812 1.19% 99 2.12%
GOMBE 527,230 1.43%
1,296,386 3.50% 1,043 1.53% 65 1.39%
IMO 820,000 2.22%
JIGAWA 1,635,453 4.42% 1,259 1.85% 135 2.89%
KADUNA 1,794,358 4.85%
1,216,604 3.29% 1,022 1.50% 75 1.61%
KANO 692,000 1.87%
KATSINA 967,431 2.62% 2,712 3.98% 170 3.64%
717,909 1.94%
KEBBI 3,224,324 8.72% 7,790 11.43% 496 10.62%
KOGI 382,086 1.03%
KWARA 977,240 2.64% 1,256 1.84% 99 2.12%
LAGOS 1,165,848 3.15%
NASARAWA 1,026,770 2.78% 898 1.32% 91 1.95%
NIGER 1,356,174 3.67%
OGUN 1,864,954 5.04% 827 1.21% 17 0.36%
ONDO 786,504 2.13%
OSUN 1,749,911 4.73% 164 0.24% 62 1.33%
OYO 700,106 1.89%
PLATEAU 513,973 1.39% 11,041 16.20% 618 13.23%
RIVERS 722,360 1.95%
SOKOTO 482,365 1.30% 1,098 1.61% 22 0.47%
TARABA 36,994,475 100.00%
ZAMFARA 1,258 1.85% 100 2.14%
FCT
Total 1,690 2.48% 104 2.23%

1,805 2.65% 194 4.15%

2,247 3.30% 25 0.54%

7,468 10.96% 517 11.07%

2,070 3.04% 110 2.36%

2,981 4.37% 41 0.88%

631 0.93% 210 4.50%

891 1.31% 69 1.48%

577 0.85% 16 0.34%

2,244 3.29% 446 9.55%

68,168 100.00% 4,670 100.00%

Maximum Value / Minimum Value

We notice that Lagos has the maximum number of companies (micro, small
and medium) though out the country, while the areas of Delta, Kwara and
Nasarawa have the minimum number.

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As for sector distribution the following table presents micro, small, medium and
large companies percentage distribution by industry, base on each elements’
contribution to GDP.

Activity Sector Micro Small Medium Large TOTAL

Agriculture 86.53% 6.53% 3.95% 2.99% 100.00%
Mining and 0.28% 0.39% 3.60% 95.73% 100.00%
Quarrying 14.28% 21.27% 19.98% 44.47% 100.00%

Manufacturing 25.44% 6.63% 2.51% 65.42% 100.00%
Water supply,
Sewage, Waste 0.52% 2.02% 7.68% 89.78% 100.00%
management and 36.34% 14.39% 8.68% 40.59% 100.00%
Remediation 4.23% 27.98% 13.68% 54.11% 100.00%

Construction 50.73% 5.60% 12.03% 31.64% 100.00%

Trade 0.00% 2.38% 9.57% 88.05% 100.00%

Accommodation and 47.35% 28.20% 22.26% 2.19% 100.00%
Food Services
1.05% 1.39% 3.69% 93.87% 100.00%
Transportation and 31.00% 13.25% 11.29% 44.46% 100.00%
Storage 13.25% 2.08% 5.28% 79.39% 100.00%

Information and 8.55% 15.22% 65.76% 10.47% 100.00%
Communication 2.09% 14.69% 24.48% 58.74% 100.00%
18.24% 20.06% 20.96% 40.74% 100.00%
Arts, Entertainment 80.76% 17.01% 2.02% 0.21% 100.00%
and Recreation
Finance and
Insurance

Real Estate
Profession, Scientific
and Technical
Services

Administrative &
Support Services

Education

Human health and
social Services

Other Services

The above table maps the whole market and in order to have a better grasp
on the information presented, we prepared a cumulutive graph, showed in
the next page.

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Company Logo Total Market by Industry S

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

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Sector and Enterprise Size

Large
Medium
Small
Micro

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Potential Target Market Size

We provide solutions to all size business entities since, our products and
services are custom made to our clients.

Because of the fact that micro businesses include a very large number of
entities with very low revenues, we will omit those from our potential targeting
market and we will concentrate to micro businesses that have an average
monthly turnover of more than ₦ 1 million ($2,780) that is 0.81% of the total.

The following table presents micro enterprises monthly average turnover
distribution.

Amount (N ‘000) % Amount (N ‘000) %
78.62% 0.11%
Below 50 10.88% 601 to 700
0.27%
50 to 100 5.58% 701 to 800 0.15%
1.91%
101 to 200 0.78% 801 to 900 0.22%
0.40% 0.81%
201 to 300 0.27% 901 to 1000

301 to 400 over 1000

401 to 500 Total 100.00%

501 to 600

Since, we do not have further categorization of this 0.81% we will assume that
only 30% (one third of the total) will be under our radar so, our potential target
market (in terms of number of companies by size) consists of 30% of the 0.81%
of the micro and 100% of the small medium and large enterprises, which sums
up to 163,734 companies.

Type Size % Medium; Large;
2.85% 0.61%

Micro 89,896 54.90% Small; Micro;
Small 68,168 41.63% 41.63% 54.90%
Medium 4,670 2.85%
Large 1,000 0.61%

Total 163,734 100.00%

Based on the percentage distribution by sector and size along with their
distribution to their total and our target market size in absolute numbers, the
following table presents our potential target market by sector and enterprise

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size in absolute numbers. Please, note that assumption of normal distribution
of data still stands.

ACTIVITY Micro Small Medium Large TOTAL
SECTOR 18,490 2,236 77 4 20,807
134 71
Agriculture 60 7,283 392 113 377
Mining and 3,052 52 10,779
Quarrying
Manufacturing 5,437 2,270 49 77 7,834
Water supply,
sewage, Waste 111 692 151 106 1,059
management and 7,767 4,927 170 48 12,912
Remediation 904 9,579 271 64 10,818
Construction
10,842 1,917 236 37 13,033
Trade
0 815 188 104 1,107
Accommodation and
Food Services 10,120 9,656 447 3 20,225

Transportation and 224 476 72 116 888
Storage 6,625 4,537 221 52 11,436

Information and 2,832 712 104 94 3,741
Communication
1,827 5,211 1,290 12 8,341
Arts, Entertainment 447 6,026
and Recreation 3,898 5,030 480 69 11,226
17,260 23,124
Finance and 89,896 6,869 411 48 163,733
Insurance $500
Real Estate $45 5,824 40 0 $317
Profession, Scientific 68,168 4,670 1,000
and Technical $3,500 $5,000 $10,000
Services
$238.6 $23.35 $10
Administrative &
Support Services

Education

Human health and
social Services

Other Services

Total

$ value each
Total value

$ million

This potential target market of 163,733 companies would have a market value
of $317 million, which is the 5% of the total $6 billion IT market value.

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Penetration and Potential Customers Number

Apart from crude oil which accounts for 15% of the country’s GDP, another key
sector of the Nigerian economy is agriculture, which employs over 60% of the
workforce and generated about 26% of Nigeria's GDP as of December 2016.
Also, wholesale and retail trade account less than one-quarter of the GDP
(around 16% of GDP in 2016, according to Nigerian National Bureau of
Statistics) and telecommunications, where growth has been particularly strong,
represent about 9% of the GDP, while the banking and insurance sectors
account for nearly 4% of GDP12.

Based on our experience and expertise so far as well as the trend in Nigerian

economy today, we will concentrate mainly on services and agriculture
companies. Out of the total available market, we put a percentage weight in
each sector to the total and a penetration rate of 1% all enterprise categories.

The total number of potential customers is estimated to 104 – 51 micro, 19
small, 17 medium and 17 large enterprises. The following table presents
industry sectors and company size as well as sector average weight and
penetration.

Penetration 1% 1% 1% 1% Weight
Sector Micro Small Medium Large 10%
Agriculture 1%
Mining 16 1 1 1 1%
Manufacturing 1 1 1 1 1%
Water supply 1 1 1 1 1%
Construction 1 1 1 1 10%
Trade 1 1 1 1 6%
Accommodation & Food 3 1 1 1 6%
Transportation 1 2 1 1 6%
Information & Communication 3 1 1 1 6%
Arts & Entertainment 1 1 1 1 10%
Finance & Insurance 3 2 1 1 1%
Real Estate 1 1 1 1 6%
Profession Services 1 1 1 1 5%
Administrative & Support 1 1 1 1 10%
Education 1 1 1 1 10%
Health & Social 1 1 1 1 10%
Other Services 1 1 1 1 104
Total 14 1 1 1
51 19 17 17

12 www.en.portal.santandertrade.com/analyse-markets/nigeria/economic-outline 25

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Competition Analysis

Preface

Xxxis an Information Technology solutions provider. Our main services include
website development, web and mobile applications development as well as
supporting services that include outsourcing, cloud hosting and training.

Nigeria - the largest market in Africa, is currently facing great economic growth
that depends on the non-oil sector, particularly construction,
telecommunications, wholesale/retail trade, hotel and restaurant services,
manufacturing, and agriculture and rising incomes through urbanization
and consumer spending, which accounts for 70 % of GDP, push the economy
forward.

A typical example of one of Nigeria’s developing industries is Information and
Communication Technology. Today, the country is Africa’s largest IT market,
accounting for 29 percent of Internet usage in Africa. In 2015, Nigeria had
more than 196 million active telecoms lines of GSM and CDMA. Mobile GSM
subscribers account for 98.37 percent of the total number of telecom
subscribers13. As Internet coverage increases, there are significant
opportunities for development of IT and data services.

An estimation of the country’s total IT spending for 2016 is $5.3 billion14 while
for 2017 it rises to $6 billion15 showing an annual increase of 13%. It is a large
market; it is growing year after year and has a lot of potential and competition.

Main Competitors

Our main direct competitors are Intelapps Nigeria Limited, Hapzibah Softwares,
C1 Systems, Softcodes Limited, while there is quite a large number of
secondary and indirect competitors.

The main large and multinational IT companies in Nigeria are mostly located in
Lagos, Abuja, Port Harcourt, Kaduna and Kano and are not more than 50. Some
of the most known are Microsoft, HP, Cisco, IBM, Chesca Technology & Systems
Ltd. Computer Systems Associates (Nigeria) Limited (CSA) Danone Consulting
Limited Eresoft Future Technology Systems Inlaks Computers Limited Labyet
Polaris Nig. Limited Microsoft Nigeria Multisoft Consulting Okuta Computer
Systems Limited Open Software Pee-Aarr Consulting ProGenics Corp Limited
Simplex Systems SystemSpecs Tara Systems Ltd. An indicative list is includes
at the Appendix 1: List A & B.

13 www.export.gov/article?id=Nigeria-Market-Overview
14 www.guardian.ng/technology/nigerias-it-spending-to-top-5-3-billion-in-2016
15www.venturesafrica.com/nigerias-inflation-rate-on-a-downward-trend-as-it-reaches-the-
lowest-in-19-months

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Also, there is a very large number of IT and IT related services companies. By
the available - per main category, lists16 the total number reaches 11,300
entries in all categories. Since, there is no official cataloging in services
provided some of the companies could be in more than one category so, the
information should be read more than different services distribution than actual
number of companies.

Category of Service Number %

IT Services 1,755 15.55%
Communications 1,602 14.20%
Software Solutions 1,229 10.89%
Computer Services 1,607 14.24%
Traning
Internet Providers 288 2.55%
Networking 1,100 9.75%
Software Applications 2.78%
Web Design 314 2.47%
Web Development 279 9.81%
Web Services 1,107 10.26%
1,158 7.49%
Total 845 100.00%
11,284

Web Services IT Services Competition
7%

Web Development IT
10% 16%

Web Design Computer Communications
10% Services 14%

Software 14% Software Solutions
Applications 11%

2% Traning
3%
Networking
3%

Internet Providers
10%

16 www.businesslist.com.ng 27

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By another list containing SME IT & programming services companies in Nigeria
(Appendix 1: List C), we can have an idea of size distribution among them.

Number of Employees Number of Companies %

1 to 3 146 80.22%
4 to 10 26 14.29%
11 to 25 8 4.40%
26 to 100 2 1.10%
Total 182 100.00%

The highlighted 4-10 employees category is actually the category of
Roundstone.

Employee Distribution 1 to 3
4 to 10
5% 1% 11 to 25
14% 26 to 100

80%

All lists as well as links to available competitor lists are includes in the Appendix. 28

Market and Competition Future Trends

Nigeria, being Africa's leading economy and population, has an increasing
development in the IT sector in general and in Communications in particular.
This constant high rate progress has led to the emergence of new technologies
and a strong drive towards digitization in most of the country’s economic and
business functions. According to the ICEF Monitor research (2014), Nigeria is
expected to enter the "economic stratosphere" between now and 2050, with
the highest average GDP growth in the world. Nigeria's annual GDP growth
has been around 6.50% - 7.00% over the past few years, as compared to
2.80% in the US in 2012 and less than 1.00% in the UK, that same year."

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Nigeria takes up 195 million of the total population in Africa and out of that
98.4 million is active on the Internet. 154.3 million Nigerians have a mobile
Internet connection, with 17 million being active social media users and 11
million being active mobile social users. The country has experienced a startling
growth of 12% in the number of active Internet users between the years 2015
and 2016 with the figure expected to increase in 2017, with 38%-40% of the
Nigerians having internet access today though homes and businesses. Nigeria's
ICT sector has shown rapid expansion over the years. As the country continues
to be seen as a centre for investors and entrepreneurs who are attracted by
the prospect of growing services to Africa's largest population and economy17.

Digital trends such as cloud computing, mobile Web services, smart grids, and
social media, are radically changing the business landscape and reshaping the
nature of work. Digital technologies disrupted the traditional business models
of organizations.

In the long term, three trends are likely to sustain Africa's growth:

 The continent has a young population with a growing labor force - a highly
valuable asset in an ageing world.

 Africa is still urbanizing and much of the economic benefit lies ahead.
Productivity in cities is three times as high as in rural areas and, over the
next decade, an additional 187 million Africans will live in cities, according
to the United Nations18.

 African economies are also well positioned to benefit from rapidly
accelerating technological change that can unlock growth and improve
infrastructure.

Ultimately, the future of Nigeria's IT industry is bright. Rising forward in the
next years, there is a presence of a strong demand that exists for new
innovations and the Nigerian government is also putting in place regulations to
create a friendlier investment scenario in the country's IT space.

SWOT Analysis

Based on the market and competition data, we will evaluate the elements of:

 Strengths, that is the characteristics of the product and business that give
it an advantage over others,

 Weaknesses, that is the characteristics of the product and business that
place it at a disadvantage relative to others,

17 www.itweb.co.za/content/zKWEBbvy85pqmRjO 29
18 http://www.ng.undp.org/

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 Opportunities, that is the elements in the environment that the product
and business could exploit to its advantage and

 Threats, that is the elements in the environment that could cause trouble
for the product and business.

SWOT analysis for Xxxis synopsized at the following table.

Strengths Weaknesses

 Determined and experienced  Relatively new company.
Management.  Limited expansion funds.

 Powerful, trained and
qualified team.

 Company and team expertise.
 Strong presence in the local

market.
 Excellent reputation.
 State of the art equipment

and facilities.
 Moderate pricing.

Opportunities Threats

 Very large market.  Large number of competitors.
 Significant growth trend.  External competition
 Country in digitization phase.
 Strong government will to IT. (internet).
 No physical barriers  Market easy entrance.
 Infrastructure and some
(internet).
 Very large user base for expenses in foreign currency.
 Inflation & currency
applications.
 Room for new applications. devaluation.
 Constantly upgrading  Scalability.

technology.
 Large internet and mobile

Strateusgeyrs.– Master Plan

Business Opportunity

Nigeria has become Africa’s largest IT market, accounting for 29 percent of
Internet usage in the continent. In 2015, Nigeria had more than 196 million

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active telecoms lines of GSM and CDMA. Mobile GSM subscribers account for
98.37 percent of the total number of telecom subscribers19.

As Internet coverage increases, there are significant opportunities for
development of IT and data services. An estimation of the country’s total IT
spending for 2016 is $5.3 billion20 while for 2017 it rises to $6 billion21 showing
an annual increase of 13%. Nigeria IT market is a large market, it is growing
year after year and has a lot of potential for new products and services.

Business Opportunity in the IT sector consists of:

e-Government
The e-Governance platform is on the rise in Nigeria. The Federal Ministry of
Communication Technology has engaged in several e-Government initiatives
with the aim of improving service delivery and efficiency in the public sector as
well as improving citizens’ access to information.

E-Government services may include:
1) Issuance of Birth, Marriage & Death certificates, Tax Clearance, Industry

license, permit and authorization, Vehicle Number Plate, Certificate of
occupancy, etc
2) Registration of Voters, Land Acquisition, Vehicle Ownership, Companies,
Associations & Town Unions, Legal Entities, etc
3) Payment of Tax, Import Duty, Government Fines and Sanctions, Electricity
& Water bills, etc
4) Delivery of Educational services, Health, Justice administration, Law and
order, etc

e-Agriculture
e-Agriculture is a huge trend in Nigeria. The Ministry Of Communication
Technology revealed the need for additional investment in this sector and the
need for software development to be adopted by both government-led as well
as private sector projects22. Today in Nigeria, farmers receive subsidies on
fertilizers and seeds directly through a mobile-phone-based system in the form
of electronic vouchers called Growth Empowerment Scheme (GES). In another
form of e-Agriculture, the Trade Net Africa initiative diffuses market information
via mobile phones23. Programs tackling food security issues are equally highly
demanded. As such, the emergence of similar platforms for various other types
of production will surely secure its place in the industry.

19 www.export.gov/article?id=Nigeria-Market-Overview
20 www.guardian.ng/technology/nigerias-it-spending-to-top-5-3-billion-in-2016
21www.venturesafrica.com/nigerias-inflation-rate-on-a-downward-trend-as-it-reaches-the-
lowest-in-19-months
22 Federal Ministry of Communication Technology, Investment opportunities in the Nigerian
ICT Sector, 2012
23 United Nations Development Programme, The Importance of ICTs in the Provision of
Information for Improving Agricultural Productivity and Rural Incomes in Africa, 2012

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e-Health
Another growing use of IT in Nigeria is in the Health department. The program
My Question, My Answer, launched in 2007, is an HIV counseling and education
service that allows individuals to ask AIDS‐related questions by sending a free
SMS to a short code, calling a toll‐free phone number or via email. The
presence of such initiatives in Nigeria makes it an ideal market for similar
programs tackling other health issues. Another investment opportunity
requiring the adoption of IT solutions in health, is the Mobile Authentication
Service (MAS) for the verification of drug authenticity24.

e-Education
In 2012, Adebola Adedugbe, of Bonifab Nigeria Ltd., launched an IT scheme to
circulate information about job opportunities in Agriculture. It was a training
program which targets university graduates and unskilled youths. 300 young
Nigerians have already been trained by 201425. Opportunities exist for
providing training in other sectors such as manufacturing, media and IT.

e-Commerce
Huge opportunities exist in e-commerce and online business. Being the largest
market in Africa, Nigeria has already attracted more than USD 1.26 Billion in
retail investments in 2013-201426. Online shops such as Jumia, Konga, Buyam,
and more are launching rapidly. Konga and Jumia have raised $63.5 million
and $61 million respectively from global investors until 201427. Other examples
are The Cashless Nigeria Initiative, Pagatech, a mobile payments company,
Gloo, an online grocery business, etc.

Cloud Computing
The Cisco Global Cloud Index predicts that through 2017, the Middle East and
Africa will have the highest cloud traffic growth rate (57 % CAGR), followed by
Asia Pacic (43% CAGR) and Central and Eastern Europe (36 % CAGR). The
cloud market is still unsaturated in Nigeria with only 36% of businesses using
the Cloud28.

As we understand, IT market in Nigeria has great potential. There are many
sectors of the country’s economy that are affected and can be improved by IT
and also there is a political will to move to this direction. As a consequence, IT
related services like website, web and mobile applications development as well
as supporting services like cloud hosting, training, networking, maintenance,
etc. will be of high demand.

24 Federal Ministry of Communication Technology, Investment opportunities in the Nigerian 32
ICT Sector, 2012
25 eLearning Africa, Social Media Rebranding Agriculture, 2014
26 All Africa, Nigeria: Driving E-Commerce Business Among Nigerians, 2014
27 Mashable, The African Version of Amazon Will Emerge From Nigeria, 2014
28 IDAL, The ICT market in Nigeria 2015

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Cloud e- e-
Computing Goverment Agriculture

e- Business e-Health
Commerce Opportunity

e-Education

Overall Strategy

Since, we have identified the market and business opportunity, we have decide
to seize this opportunity and move ahead, formulating an expansion strategy
for the coming years.

Our strategy is Expansion through Concentration and it involves
investment on resources on our human capital, technology and on marketing.

We will concentrate in Nigerian market, attracting new customers.

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Market Business
Opportunity Opportunity

Expansion
Through
Concentration
Strategy

Investment

Human Capital
Technology
Markerting

Short Term Goals

In order to materialize our strategy, we will have to set and achieve interim
goals.

Locations, Facilities & Infrastructure
We need to move to a bigger office space to accommodate team expansion.
For the new facilities we will need renovations and furniture, wiring and
networking, utilities and supporting infrastructure. We will also need an
additional company vehicle. These should be ready by the end of Q2.

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Equipment & Technology
Apart from the necessary wiring and networking, we will need extra electronic
equipment (computers, printers, etc.,) as well as servers. These should be
ready by the end of Q2

Human Resources
There is a need for at least four new employees by the beginning of Q3 in
support and business development as well as for a developer.

Marketing
We will need to reproduce marketing materials, enrich our marketing mix and
coordinate the marketing department along with business development. The
full extent of marketing activities will be presented in the next chapter.

Total Budget - Investment

The total budget for supporting our expansion strategy is $54,000.

Sources of Funds
We will seek external investment to support our $54,000 budget against our
company’s equity with a buy back clause at a premium, offering the investor a
total 20% Return on Investment. Buy back will be set to be concluded in
January 2022 so, investment principal plus interest will be paid by 2021.

Use of Funds
The investment funds will be used for acquiring assets, marketing plan launch
and working capital. In more detail:

 For HR, hiring and initial training, $5,000.
 For Office, Facilities and Infrastructure, $6,000.
 For Equipment and Technology, $15,000.
 For Marketing, $18,000 and
 For Working Capital, $10,000.

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Marketing

Marketing Objectives

During and as a result of our expansion process, we aim to the following
Marketing Objectives:

We need to be established as experts
We will continue to offer high quality services to our clients and be quoted in
major industry press (online and hard copy), speak at industry events and gain
recognition. Our measurable and specific objective is to be introduced in at
least two major events as established experts within the next twelve months.

We need brand name reference clients
By the end of this year, we need at least two major brand names we can cite
as clients.

We need to explore clients from most developed states29
By the end of this year, we need at least one client from the 3 most developed
states of the country (Lagos, Rivers, Delta), while we will increase this number
to five for next year. We have to be a really national firm.

Marketing Mix

Our product / service itself is a key component to our marketing mix. Our
product / service will be our best advertisement. The competition we are facing
is strong and because of the product / service’s nature, can be even stronger,
but our specialization and quality of work is unique so our clients will be also
our recommenders and promoters.

Product / Services
We will keep our product / service mix unchanged or with minor changes in
special cases for now and we will concentrate on the other three elements of
our marketing mix.

Pricing
We are successfully in business for the last 5 years and we offer specialized
services to clients of all sizes and in all economic sectors. Our pricing strategy

29 https://en.wikipedia.org/wiki/List_of_Nigerian_states_by_GDP 36

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needs to match our positioning and strategy for expansion. We cannot be
cheap or economical in specialized services and also we must be in the market
and sometimes under the market in order to gain market share – especially in
new territories.

As for our basic pricing strategy, we decided to adopt Pricing for Market
Penetration Strategy, aiming to attract new clients by offering somewhat lower
prices than competition on non specialized products / services. In this way we
will draw attention away from our competition and strengthen our market
position and in the same time in order not to lose income we will increase prices
in specialized cases.

Our pricing will vary from $500 to $10,000 per project per client, depending of
course the sector, the market, the size of client and the type of project.

Promotion
Our promotion strategy focuses heavily on Business Development, Direct
Marketing and Public Relations, with very little or no emphasis on traditional
advertising.

For Business Development we will hire a capable sales person who will
undertake the task to develop further more the market for us. Business
development will include potential client lists per sector or area, personal
selling, participation to private and public sector tenders, etc. We will add
another person after the first year given the circumstances.

We will enrich our Website with more information on our product / services
and we will add an interaction capability with client’s, in order to answer
questions they might have when they market search for an IT solution provider
and in order to add their email to our database and so we can communicate
our services and offers to them regularly.

We will develop Social Media pages in LinkedIn and Facebook and we will
actively support them.

We will form a regular Newsletter and sent it to current and prospect clients.
The newsletter will include news, information and trends of the IT market, our
special services and offers.

We will create a Mailing List which along with our newsletter will promote our
services and special offers to potential clients.

Development and print out of a Company Profile / Brochure, with
information on our company and product / services.

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We will attend IT Fairs and Congresses in order to enrich our knowledge on
our industry and present our capability to potential clients.

Our Public Relations mix will include press releases and interviews to
specialized hardcopy and digital newspapers and magazines, as well as blogs.

Along with Public Relations and in collaboration with a specialized newspaper,
magazine or blog, we will launch a Competition where companies can take
part and win a website development from us as the competition price.

Finally, in order to develop strong relationships with the public sector, we will
launch a Lobbying plan, performed either directly by our CEO or in association
with key partners.

Distribution
Our distribution mix – i.e. how are we reaching our clients and sell our product
/ services, is determined by the nature of our business and our promotion mix.
Mainly, distribution will be personal selling by our sales force as well as by our
management, along with our promotion mix.

Selling Philosophy

Within our basic thinking and business culture, we don't really "sell," in the
classic sense. We don’t have a fixed solution and try to puss it to clients as is.
Instead, we listen to our clients, understand their needs and we offer our
services to clients who have the needs we can fill, so we listen well enough to
establish whether or not we do. The most powerful long-term sales pitch is to
tell somebody "I'm sorry, that's not what we do. We are not the best answer
to your problem." That unusual "pitch" establishes credibility and positions us
well for the future time when that company does need our services.

Selling doesn't work well and long term except honest expertise is well
delivered. We don't overpromise, we don't embellish, and we don't even
attempt to sell to anybody who doesn’t need our services. We are offering true
expertise and we sell only to those who already know they want it. In this way
we gain our client’s trust, we keep a loyal clientele and we establish a strong,
undisputed status in the market – because this is our business culture.

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Financial Projections

The financial projections - estimated budget, for our company, are based on
the market and competition analysis founding’s, our strategy and short term
goals, our past financial performance and certain key assumptions.

Key Assumptions

The following key assumptions were taken into consideration in our estimated
budget calculations.

Total Investment
Total investment will be $54,000 and funds will be returned through a buy back
clause with a 20% Return on Investment, that is an additional $10,800
summing up to $64,800.

Additional Personnel Cost
To support our development, the following people will be hired:

 Two for support in 2018 and an additional one in 2020, with monthly salary
at $300.

 One developer in 2018 and an additional one in 2020, with monthly salary
at $400 and

 One sales person for business developing in 2018 with monthly salary at
$300, sales target at $12,000 for Q3 & Q4 2018, $40,000 for 2019, and
10% increase for 2020 and 2021 and an additional sales person in 2020
with a sales target of $40,000 and 10% increase for 2021. There will be a
sales commission of 15%.

 HR, hiring and initial training will be fixed at $5,000.

Office, Facilities and Infrastructure
The fixed amount for Office, Facilities and Infrastructure is $6,000, while larger
space will cost an additional $200 per month.

Equipment and Technology
Equipment and Technology will have a fixed amount of $15,000 while there is
going to be an additional $700 per month.

Marketing
For marketing we will need a fixed amount of $18,000, while there is a monthly
cost of $500.

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Base Expenses
Base expense projection for 2018 is at $ 120,320.16 and this amount – like all
expenses, is estimated to increase at 5% per year.

Sales Plan

As for Q1 2018 results and estimation for the rest of the year with situation as
is (without the investment), total revenue projection is at $152,800 while
expenses projection is at $ 120,600 and projected profit at $ 32,200.

Having completed the investment at the beginning of Q3 2018, full effect in
sales will occur in 2019. Our sales target is to reach the “Penetration and
Potential Customers Number” figure we analyzed in the market section by 2021.
For year 2019 we project to reach 70% of the total targeted (2021) number of
projects, while for 2020 we project to reach 85%, with prices constant for all
years.

For this year – 2018 and for Q3 and Q4, we estimate that will reach 75% of
the full effected 2019 counterpart.

For the year 2018 we estimate the following sales distribution per Q and totally.

Quarters Est. Revenue Remarks
($243,500 / 4) X 75%
Q1 $ 32,400
Q2 $ 44,000
Q3 $ 45,656
Q4 $ 45,656
Total 2018 $ 167,712

For the year 2019 we estimate the following sales distribution in number of
projects/clients and prices per projects/client. Projects count for 70% of target
year 2021.

Project/Client Number Price Est. Revenue
Micro 36 $ 500 $ 18,000
Small 13 $ 3,500 $ 45,500
12 $ 5,000 $ 60,000
Medium 12 $ 10,000 $ 120,000
Large 73
$ 243,500
Total 2019

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For the year 2020 we estimate the following sales distribution in number of
projects/clients and prices per projects/client. Projects count for 85% of target
year 2021.

Project/Client Number Price Est. Revenue
Micro 43 $ 500 $ 21,500
Small 16 $ 3,500 $ 56,000
14 $ 5,000 $ 70,000
Medium 14 $ 10,000 $ 140,000
Large 87
$ 287,500
Total 2020

For the year 2021 we estimate the following sales distribution in number of
projects/clients and prices per projects/client. Projects count for 100% of
target.

Project/Client Number Price Est. Revenue
Micro 51 $ 500 $ 25,500
Small 19 $ 3,500 $ 66,500
17 $ 5,000 $ 85,000
Medium 17 $ 10,000 $ 170,000
Large 104
$ 347,000
Total 2021

By implementing our strategy and business plan we estimate that within the
next 3 years (2019-2021) we will increase our sales and for that matter our
market share, more than 2 times without increasing our prices.

Budget Forecast

With completing the investment within Q2 2018, we will be able to apply our
strategy and business plan within early Q3 2018, while full effect of strategy
and changes will take place during 2019. The following table presents our
forecasted budget for years 2018-2021.

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Projected Revenues, Expenses and Profit
2018-2021 (amounts in $)

Additional Expenses Revenues 2018 2019 2020 2021 Remarks
Base Expenses 167,713 243,500 287,500 347,000
120,600 126,630 132,962 139,610 5% increase p.a.
Support 1 300 per month
Support 2 1,800 3,600 3,780 3,969 300 per month
Support 3 1,800 3,600 3,780 3,969 300 per month
Developer 1 3,600 3,780 400 per month
Developer 2 0 0 5,040 5,292 400 per month
Sales Person 1 2,400 4,800 4,800 5,040 300 per month
Sales Target 1 3,780 3,969 10% increase p.a.
Sales Commission 1 0 0 44,000 48,400 15% on target
Sales Person 2 1,800 3,600 6,600 7,260 300 per month
Sales Target 2 12,000 40,000 3,600 3,780 10% increase p.a.
Sales Commission 2 1,800 6,000 40,000 44,000 15% on target
6,000 6,600 200 per month
Rent 0 0 2,520 2,646 700 per month
Technology 8,820 9,261 500 per month
0 0 6,300 6,615
Marketing 1,200 2,400 58,620 62,181
Total Additional Expenses 4,200 8,400 191,582 201,791
3,000 6,000 64,800
Total expenses 18,000 38,400 0 266,591
Investment Pay Back 138,600 165,030 191,582 80,409
Grand Total Expenses
0 0 95,919
Projected Profit 138,600 165,030

29,113 78,470

350.000 Projected Revenues
300.000 Projected Expenses
250.000 Projected Profit
200.000
150.000
100.000

50.000
0

2018 2019

2020

2021

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Break Even Point

Operational Break Even Point is calculated as the revenue amount needed in
order to cover the total amount of operational cost, during a specified period
of time that is a fiscal year. At Break Even Point there is no profit or loss.

Based on the assumptions, the nature of business and the absence of Cost of
Services Sold as estimation to gross profit calculation, we calculate BEP entirely
and exclusively based on operational cost. The following table presents the
Revenue, Cost and Profit / Loss correlation to Break Even Point Calculation for
years 2018, 2019, 2020 and 2021.

Revenue, Cost and Profit / Loss Correlation 2018

Revenue Cost P/L 2018 Cost P/L 2019 Cost P/L 2020 Cost P/L 2021
0 2018 -138,600 2019 -165,030 2020 -191,582 2021 -266,591

138,600 165,030 191,582 266,591

25,000 138,600 -113,600 165,030 -140,030 191,582 -166,582 266,591 -241,591

50,000 138,600 -88,600 165,030 -115,030 191,582 -141,582 266,591 -216,591

75,000 138,600 -63,600 165,030 -90,030 191,582 -116,582 266,591 -191,591

100,000 138,600 -38,600 165,030 -65,030 191,582 -91,582 266,591 -166,591

125,000 138,600 -13,600 165,030 -40,030 191,582 -66,582 266,591 -141,591

150,000 138,600 11,400 165,030 -15,030 191,582 -41,582 266,591 -116,591

175,000 138,600 36,400 165,030 9,970 191,582 -16,582 266,591 -91,591

200,000 138,600 61,400 165,030 34,970 191,582 8,419 266,591 -66,591
225,000 138,600 86,400 165,030 59,970 191,582 33,419 266,591 -41,591
250,000 138,600 111,400 165,030 84,970 191,582 58,419 266,591 -16,591

275,000 138,600 136,400 165,030 109,970 191,582 83,419 266,591 8,409
300,000 138,600 161,400 165,030 134,970 191,582 108,419 266,591 33,409
325,000 138,600 186,400 165,030 159,970 191,582 133,419 266,591 58,409
350,000 138,600 211,400 165,030 184,970 191,582 158,419 266,591 83,409

Red straight lines indicate the Break Even Point

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thousand $ 2018

400 Revenue
Cost 2018
300 P/L 2018

200

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

-100

-200

thousand $ 2019

400 Revenue
Cost 2019
300 P/L 2019

200

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

-100

-200

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2020

thousand $ 400

300 Revenue
Cost 2020
200 P/L 2020

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

-100

-200

-300

thousand $ 2021

400 Revenue
Cost 2021
300 P/L 2021

200

100

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

-100

-200

-300

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APPENDIX

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Apendix 1: IT Companies List

Below you may find indicative lists with IT, software and mobile applications
development, training, etc., companies. You may find more relative lists with
IT companies at:

 www.businesslist.com.ng/category/information-technology and
 www.finelib.com/search.php?q=information+technology&start=0&t=2

16

List A

Nigeria has quite a number of functional IT companies and these companies
have grown over the years to meet up with the standard obtainable in other
parts of the world. The following list includes large IT companies, both local
and of global scale30.

Cisco
They are specialists in several areas, like collaboration, telepresence and unified
communication. They are also into security, wireless connectivity and
networking. They have up to 10,000 employees in their company across the
nation. They are not limited to Nigeria; they are actually international. Their
website is at www.cisco.com

IBM
This is yet another international information technology company in Nigeria.
They have specialties in several areas, like security, ERP, CRM and business
analytics & optimization. They equally offer IT consultancy and several other
IT services. They have up to 10,000 employees in their company. Their website
is at www.ibm.com

Microsoft
Needless to say, Microsoft is yet another leading IT company and they have
their operation center in Nigeria. They are involved in providing various IT-
related services, like cloud computing, Smartphone technology, hardware
manufacturing and developer tools. They are involved in design tools and
software programming too. Microsoft is a big multinational company with over
10,000 employees. Their website is at www.microsoft.com

HP
This is yet another original equipment manufacturing IT company. Their
specialty include IT security, print services and software development. They
are equally involved in IT services, servers, storage and computer

30 nigerianfinder.com/it-companies-in-nigeria-full-list/ 47

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manufacturing. They are multination and have over 10,000 people in their
employment. Their website is at www.hp.com

Check Point
This original equipment manufacturing company has expertise and specialty in
various other aspects aside hardware manufacturing. They are involved in VPN
services and data loss prevention. They equally ensure intrusion prevention and
provide firewall services. They are top class when it comes to network security.
They have up to 5000 people in their company. They are yet another
multinational company with operation in Nigeria. Their website is at
www.checkpoint.com

VmWare
This is a multinational company too and it is a leading brand in networking
services. They provide other services like software-defined data center,
virtualization and cloud infrastructure. They have over 10,000 people in their
employment. Their website is at www.vmware.com

Oracle
Oracle is a popular international IT company with operation outlet in Nigeria.
They have specialty in business intelligence, fusion and middleware
manufacturing. They are experts in database and application development.
They develop software and have enterprise specialty. They have over 10,000
people in their employment. Their website is at www.oracle.com

EMC
They have specialty in big data services and backup & recovery. They are
equally experts in virtualization and internet security services. They offer unified
storage services too. They have more than 10,000 people in their employment
and they have international reach. Their website is at www.africa.emc.com

Huawei
They have specialty in various areas, like carrier network and consumer
devices. They are also involved in enterprise solutions and ICT. They are
multinational and have many years of operation in Nigeria. They have over
10,000 people in their employment. Their website is at www.huawei.com

Business Connexion
They provide general information technology services. They are involved in ICT
outsourcing. They have up to 10,000 people in their employment with
international presence. Their website is at www.bcx.co.za

Dimension Data
They are IT service providers and have expertise in various aspects, like IT
outsourcing, System integration services, security, data center and
communications. They are multinational and have been in Nigeria for quite a

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while. They have over 10,000 people in their employment. Their website is at
www.dimensiondata.com

Vodacom
Their specialty is in data services and telecommunication. They are
multinational and have up to 10,000 people in their employment. Their website
is at www.vodacom.com.ng

Wipro
This information Technology and Services Company is known for excellence in
service delivery. They are specialists in Software & Enterprise Solutions;
Cloud/managed Services and infrastructure solutions. They are one of the many
indigenous IT companies in Nigeria and they have up to 200 people in their
employment. Their website is at www.wipro.com

Weco Systems
They have specialties in various areas, like Software& enterprise solutions;
cloud/managed services and infrastructure solutions. They operate locally in
Nigeria and have up to 200 people in their employment. Their website is at
www.wecosysgroup.com

Resourcery
They are experts when it comes to Enterprise Voice, outsourcing & support as
well as strategic information solutions. They have up to 500 people in their
employment and they operate locally in Nigeria. Their website is at
www.resourcery.com

Layer3
They have specialty in data center design, server virtualization and monitoring.
They have also displayed expertise in network security audits and wireless
services. They have up to 200 people in their employment and operate locally.
Their website is at www.layer3.ng

Computer warehouse group
They have specialty in business transformation, total outsourcing, managed
services and system integration. This information technology & Services
Company had been around for some times and they operate locally in Nigeria.
Their website is at www.cwg-plc.com

iTeco
It is a subsidiary of Telnet Group. They have specialty in various aspects, like
the convergence of voices, networks security, data and video technologies and
lots more. They operate locally and have up to 200 people in their employment.
Their website is at www.telnetng.com

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