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GIS Consulting Firm Business PlanJena HappDecember 12, 2012RA574/MG315Confidentiality AgreementThe undersigned reader acknowledges that the information provided by Jena Happ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Jena Happ.It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Jena Happ. Upon request, this document is to be immediately returned to Jena Happ. ______________________Signature______________________Name (typed or printed)______________________DateThis is a business plan. It does not imply an offering of securities.Table of ContentsExecutive Summary………….……………………………………………………………4Company Information Mission..………..………………………………………..…………………….5Vision………….…………………………………………..…………………..5Goals………….…………………………………………….…………………5Legal business form………….………………………………………………..6Company organization.………….………………………….…………………6Environmental and Industry AnalysisEnvironmental analysis………….………………………….…………………6Industry analysis………….…………………………………………………...7Products/ServicesDescription………….………………………………………..………………..8Pricing……….………………………………………………...……………..10Competitive advantage………….……………………………………………10MarketingMarket segmentation.………….…………………………………..…………11Target market segmentation strategy.………….………………….…………12Customer profile………….……………………………………….…………12Pricing strategy………….…………………………………………..……….12Promotion strategy………….………………………………………..………12Place strategy………….……………………………………………………..13Sales projections……….……………………………………………….……14Management summaryOwner biography and qualifications………….…………………………...…15Personnel plan………….…………………………………………………….16Financial planImportant Assumptions………….…………………………………………...17Projected Profit & Loss/Income Statement………….……………………….19Breakeven analysis.………….……………………………………………….19Appendix References………….…………………………………………………………….21Appendix A………….…………………………………………………………...23Appendix B………….…………………………………………………………...24Appendix C………….…………………………………………………………...25Appendix D………….…………………………………………………………...26Executive SummaryBusiness GIS Experts will be a GIS consulting firm. We will provide excellent GIS customer service to large businesses that require help with daily GIS related issues. Our home-based business will help large companies with GIS departments through the use of the screenshots delivered by email and communicating directly with the customer by phone. Over the last two decades, GIS has become a drastically increasing field and now over 14,000 are employed as GIS analysts or cartographers. Business GIS Experts will target only large businesses with GIS departments and will not do business with smaller businesses. Our company will become one of the leading GIS consulting companies by keeping our prices lower and we will retain our customers by our good service. By year 3, we plan to offer a training service in which we will train GIS departments to become more efficient in their use of GIS. Our company has employees who have adequate GIS knowledge and experience to become successful and long lasting. We project net profits in each of the first three years of business. Sales projections will be high even with a low number of working hours, since we have a large service price. Since startup costs of computers and GIS software are relatively low and sales projections are high, net profits are realistic. Our company will succeed due to the growing demand in GIS consultants and our low price. The increase in new GIS analysts over the last two decades indicates a continuous increase in help with pany Information1.1 MissionBusiness GIS Experts provides exceptional service and customer support to all business GIS analysts. 1.2 Vision Business GIS Experts strives to become the United States leader in business GIS customer service, feedback, and solutions.GoalsGoal 1: Increase the number of customers by 20% each quarter for the first year through a good marketing scheme. Business GIS Expert‘s internal records of the number of customers will measure this issue.Obj 1a: Implement at least one promotional mail/email flyer every 2 months for the first year.Obj 1b: Offer the first consultation as free.Obj 1c: Create a website describing Business GIS Expert use and functionality.Obj 1d: Set up a business profile on social media sites such as Facebook, LinkedIn, and Twitter {since core demographic includes users with a high degree of technological knowledge}.Goal 2: Provide a data sharing program, so the customer could easily send Business GIS Expert the issue they would like fixed. This would be measured by determining whether or not the problem was solved in a timely manner.Obj 2a: Shorten the time it would take to fix a problem sent by a customer.Obj 2b: Diffuse confusion between the customer and Business GIS ExpertGoal 3: During the first quarter of business, Business GIS Expert will obtain 50% customer satisfaction through the use of an email survey. During the second quarter, a 75% customer satisfaction should be obtained.Obj 3a: Observe customer needs from forums and blogs, and determine what the customer wants and needs from Business GIS ExpertObj 3b: Offer the customer a bonus such as a free aerial map after the second consultation. Goal 4: Gain a net income of 10% annually for Business GIS Expert during the first two years of business.Obj 4a: After high startup costs of GIS software, do not purchase any further software extensions or packages for the first year and a half. Obj 4b: Research competitors’ prices and keep Business GIS Expert‘s prices slightly lower than competitor’s prices.Legal Business FormBusiness GIS Expert is a sole proprietorship, owned 100% by Jena Happ.1.5 Company OrganizationJena Happ is the CEO of the organization. Business GIS Expert is located at Jena Happ’s home in Winona, Minnesota. Within the next 3 years, Business GIS Expert will look to employ two GIS analysts to alleviate the expected high workload.Environmental and Industry Analysis2.1 Environmental AnalysisIncreasingly, businesses across the globe area are incorporating GIS into their decision-making processes. The need to know where everything is located at in the world is the main driving force behind GIS growth regionally CITATION Pav11 \l 1033 (Pavri, 2011). In order to develop a GIS consulting business in the Midwest, there needs to be a sufficient population of GIS analysts. Due to the overwhelming need of GIS analysts, more jobs are being created to create maps and applications. As a result of GIS job creation, more universities are offering degrees in GIS to train students in this highly technical field CITATION Wor12 \l 1033 (WorldWideLearn, 2012). With a growing population in GIS analysts, more GIS consultants are needed. The United States Bureau of Labor Statistics estimates jobs in GIS/cartography will increase by 22% between 2010 and 2020 CITATION Car12 \l 1033 (Cartographers and Photogrammetrists, 2012). Currently, 13,800 people are employed as cartographers/GIS specialists in the United States. With the number of cartographers large, consultants are needed for advising purposes. Although becoming a “GIS Professional” is a voluntary certification program, the number of members indicates a need for a GIS consultant. In total, there are over 5,000 consultants, most of which live in the Midwest and eastern areas of the United States. Appendix A includes a map, which shows the GISP population in the United States CITATION GIS08 \l 1033 (GIS Certification Institute, 2008). 2.2 Industry AnalysisIT consulting services market reached a revenue value of $515.6 billion in 2010 and is expected to grow to $587.8 billion in 2015. Below in figure 1 is a chart of the IT consulting market value for the next 5 years.24003002366645Figure 1. Displays IT consulting overall market value over the next 5 years.Figure 1. Displays IT consulting overall market value over the next 5 years.240030056007000Growth in the GIS industry will be growing for the foreseeable future CITATION Ind11 \l 1033 (Industry Repror: Global IT consulting & Other Services , 2011). According to a report conducted by Pike Research, spending on GIS will increase over the next 5 years to $3.7 billion CITATION Ric12 \l 1033 (Martin, 2012). However, according to Global Industry Analysts, Inc the GIS industry will grow to $10.6 billion in 2015 CITATION Glo12 \l 1033 (Global Industry Analysts, Inc.: Global Geographic Information Systems (GIS) Market to Reach US$10.6 Billion by 2015, 2012). Regardless of which figure is correct, GIS consulting services is in demand worldwide. To get into this industry, companies must be small and specialized in one specific industry. Also, companies must have competent employees that understand the technology. Two keys to obstacles to enter this industry include high upfront costs of software and poor brand recognition CITATION Glo12 \l 1033 (Global Industry Analysts, Inc.: Global Geographic Information Systems (GIS) Market to Reach US$10.6 Billion by 2015, 2012). There are relatively few big players in customer service when it relates to GIS. When researching ideas on how to solve a problem, analysts today must go online to forums and blogs for answers. ESRI forums are the primary choice for GIS users to solve answers. Although small companies are the easiest way to enter into consulting services, big companies are the main competition CITATION Glo12 \l 1033 (Global Industry Analysts, Inc.: Global Geographic Information Systems (GIS) Market to Reach US$10.6 Billion by 2015, 2012). Brand recognition and loyalty win over customers easier than unknown small companies.A worldwide leader in IT consulting includes Capgemini Consulting Technology Outsourcing. From 2006 to 2010, Capgemini grew from 64,000 employees to 90,000 employees (Industry Repror: Global IT consulting & Other Services , 2011; Martin, 2012). Overall, IT consulting services and GIS services are growing, and will continue a steady rate of growth for the immediate future. An increase in employees and revenue in both services is a good indication both services will grow.3.0 Products/ServicesDescriptionGeographic Information Systems (GIS) are extremely useful for a wide variety of reasons. Each business can apply its own unique application to answer their specific spatial problem. GIS is important to businesses because it can allow companies to predict and calculate future issues that may arise. Over the last twenty years, GIS has become one of the most influential tools available to companies.18288004800600Figure 2. GIS implemented in business. Here new Target store locations in Minnesota were calculated.0Figure 2. GIS implemented in business. Here new Target store locations in Minnesota were calculated.GIS consists of a software program in which a GIS analyst plots tabular data, and analyzes the results. GIS uses a computer software program – ESRI’s “ArcGIS” - that allows you to display tabular data (aka excel documents) on specific locations on the earth. Accompanied with tabular data is attribute information prudent to the specific company. For example, when plotting every Wal-Mart store location, each point will have a unique table associated to it; these tables have information such as addresses, the amount of sales for each store, and the number of employees in it. When we analyze the results, we take each point and compare their unique values to one another. A very common way to use GIS in businesses is to locate areas where new customers can come from. To do this, an analyst would first need to display existing customers’ address locations CITATION Sli02 \l 1033 (Sliwinski, 2002). By using a database with customer’s addresses, an analyst is able to display where customers live onto a map. Then the analyst could perform a few different types of analyses in which they calculate distance from a customers address to their potential store site. An example of site selection for Target Corporation in Minnesota is displayed in Figure 2 above. 18288002540000Another way businesses could use GIS is by displaying surveyed information. ESRI’s Business Analyst Extension includes all types of survey questions that range from questions like “do you own a TV” to “how many hours of TV do you watch in a week.” The Business Analyst gives this information by zip code; as a result, we can turn the surveyed answers into points and visually display the standard of living in a town. The Business Analyst also provides information such as firm sales and employee’s, that is classified by the NAIC’s classification system. After learning the importance of NAICs to businesses by grouping firms into sectors, I found the data given by Business Analyst to be very important. This information allows businesses to visually understand the differences between sectors based upon different attributes the GIS analyst wants to research. GIS can be implemented into any company. By using data obtained by NAICs, GIS analysts can perform multiple tools to obtain the desired results such as locations of future customers, the company’s trade area, or plot potential store locations. GIS is becoming increasingly common and will benefit businesses in their future ventures. 3.2 PricingBusiness GIS Experts will charge on a hourly charge. Research conducted by Atanas Entchev found private consulting companies charged an average of $102.96 an hour (Entchev, 2011). Therefore, Business GIS Expert will begin by charging a flat fee of $70 an hour. When more GIS analysts are hired in the future, Business GIS Experts will charge around $70 an hour for training companies how to integrate GIS into their company (Entchev, 2011). Once Business GIS Experts makes training available for companies, the company will charge $65 an hour for consulting and $60 an hour for training if the two jobs are contractually agreed upon prior to starting work. 3.3 Competitive AdvantageBusiness GIS Experts gains an advantage in the GIS consulting world by being lower priced than competitive consulting firms and by being quick to respond to costumers’ problems.Business GIS Experts plans to train companies how to incorporate GIS into their company in addition to being a consulting firm. We hope to hire additional GIS analysts; these analysts will train GIS employees of a company how to use GIS. Overall, Business GIS Experts plan on becoming a leader amongst GIS consultants in the future.4.0 Marketing4.1 Market SegmentationThe global market for GIS is large. Therefore, Business GIS Experts wants to narrow our market to businesses in the United States. Secondly, these businesses must be in the Midwest; as a result of only employing one GIS Analyst, Business GIS Experts would not be able to handle the entire workload of the United States. Business GIS Experts will only help companies larger than a “mom and pop” shop. “Mom and pop” shops will likely only need service from Business GIS Experts once. As a result, the likelihood of these types of businesses needing consultation services again is slim. Figure 1 to the right explains our “big to little” target market. 2743200457200000Not only will Business GIS Experts reject “mom and pop” shops, we also will only consult businesses with GIS departments. Since GIS lingo is difficult for lay people to understand, Business GIS Experts need to be able to talk to other people who have familiarity with the software. Usually, GIS consultants who work for businesses need at least a bachelor’s degree in Engineering, Geography, or some other science that can be related to GIS. 2743200857885Figure 3. Business GIS Experts target market.0Figure 3. Business GIS Experts target market.Our target market not only needs to be well educated and well versed in GIS, but they also need to be struggling GIS analysts who work for large businesses in the Midwest.4.2 Target Market Segmentation Strategy Business GIS Experts will satisfy our target market by consulting 1,000 GIS analysts (over our three year period) of the nearly 14,000 people in the United States employed as cartographers/GIS specialists. This equates to 7% of all GIS specialists. Since projects can take many hours, if not days, to complete, we anticipate we can average around 330 customers a year.4.3 Customer ProfileA typical customer Business GIS Experts will be a large business in the Midwest. They will be a “big box store” or a financial company. By definition, big box stores are between 50,000 and 200,000 square footage in size (Haltiwanger, 2009). These two industries were chosen because they will have a large number of employees. Therefore the need of GIS analysts will be higher in a financial company or a big box store as opposed to a “mom and pop” store. 4.4 Pricing Strategy As a result of Business GIS Experts goal to attract new customers from our relatively low prices, we will use penetration-pricing policy. We want to retain our customers by our low prices and our good work. Other companies such as MnGeo charge an hourly fee of $95 for a senior analyst CITATION MnG12 \l 1033 (MnGeo Project Services, 2012). Consequently, Business GIS Experts wants to ensure our prices are lower than this and other similar companies. 4.5 Promotion Strategy Since Business GIS Experts plans on ensuring we will be the lowest price in the business. To ensure this, we will promote our promise to match any price that is lower than ours. To stay ahead of all other GIS consulting firms, Business GIS Experts feels this is an important aspect of our promotions. 21717001257300Due to the fact GIS analysts typically need to be very intuitive with computers and software programs, Business GIS Experts will use social media to promote our product. We will target forums such ESRI’s forums and buy banner space to promote our product if possible. ESRI is the primary software company for GIS users. Their forum is the first place GIS users go to help answer questions. As a result, part of our target market is on this website. Figure 2 is a screenshot of ESRI’s forum.21717001177290Figure 4. An image of ESRI’s forum.00Figure 4. An image of ESRI’s forum.Another option for promotions would include trade shows. These conference-like atmospheres are held to give companies the opportunity to showcase their products/services. This gives prospective customers the opportunity to communicate directly with Business GIS Experts before deciding to do business with us.In all, Business GIS Experts will promote our service by purchasing banner space on popular GIS forums and in trade shows. 4.6 Place Strategy All of promotional advertisements will direct customers to our website. Business GIS Experts will conduct all of its business online through this website. The website will be extremely plain and primitive and consist of only three tabs. The first tab will be an “About” that will describe who Business GIS Experts is, our rates, and how we can help businesses that fall into our target market. The second tab will be the focal point of the website. This will be the “Forum.” The customer will be given a username and password to access the forum and communicate directly with our GIS consultant(s). Here customers will be able to send screenshots of issues and call Business GIS Experts directly to walk the customer through solving the problem. Once Business GIS Experts resolves the issue, the customer will be billed the appropriate amount.The final tab will include our contact information and testimonials of past (and hopefully future) customers. This tab will accessible to everyone who is browsing our webpage. By having a testimonial section, we are allowing prospective customers to read about Business GIS Experts the successes past customers have had with our company. Our website is the main source of how we communicate with our customers. With our basic, but effective customers, we will allow our past and happy customers, the comfort of knowing they have chosen a good consulting firm.4.7 Sales Projections Business GIS Experts projects sales to be very low in the beginning of the business. We believe for the first six months, we will only work about 10 hours an hour helping GIS analysts. Until promotional advertisements and our brand becomes recognizable, we believe the hours worked will be low. This equals a total of $2,800 in sales a month. From July until December we believe our promotions and brand recognition will increase our hours worked to 15 a week. This figure equals $4,200 a month in sales. In the first year of business, Business GIS Experts expects a sales total of $39,200. Beginning in year 2, the company believes to be working 20 hours a week, which totals $5,600 in sales. We will increase promotions at the beginning of the year and this will hopefully increase sales from July until December to $7,000 a month. In total, Business GIS Experts anticipates a yearly sales total of $75,600.Near the end of year two, the CEO anticipates, the company will be successful and should have an increase in workload. As a result, Business GIS Experts plan on hiring an additional GIS analyst to alleviate workload and increase productivity and efficiency. As a result, sales should increase exponentially. With the establishment of brand name recognition and cheap services, the additional analyst should have enough work for a 35-hour workweek the first 6 months of year three. By the final 6 months of year three, Business GIS Experts anticipates both employees will be working around twenty hours a week to get to $11,200. Year three’s sales will be projected at $126,000.Business GIS Experts anticipates slow, if not nonexistent, sales in the beginning of our proposal. However, by the time our name is recognized for our good and cheap services, we anticipate a steady growth in sales.Management summaryBusiness GIS Experts is a very small company. We have one employee who is well qualified and will look to hire one or two more GIS analysts by year two. The CEO and primary GIS consultant needs to be well versed in all facets of the company. This person needs to accurately calculate budgets, marketing strategies, and perform the GIS consulting service. When the GIS analysts are hired, they will consult directly with the customer; the GIS analysts will not be required to perform any business responsibilities. Currently, the founder of Business GIS Experts has no experience in business. As a result, our primary management gap would include the lack of a financial expert/consultant.We are a centralized organization since there is only one employee. Therefore, the CEO of Business GIS Experts will be the sole decision maker on all levels. Also, since there is only one current employee, we are a flat organization. Even with the addition of one or two GIS analysts, we will remain a flat organization since GIS is a self-directing job. Since the sole purpose of our company is to provide good GIS customer service to businesses, we do not need to focus on creating innovating ideas and therefore, we are a stable organization. 5.1 Owner biography and qualificationsBusiness GIS Experts has chosen Jena Happ to the CEO and primary GIS Consultant. She has been working on ESRI’s ArcGIS 10.0 for a few years. She received a Bachelor of Science degree in Geography from Eastern Illinois University with Minors in GIS and Earth Science. Currently she is close to completing her Master of Science in GIS degree from Saint Mary’s University of Minnesota. In addition to attending graduate school, she is working at GeoSpatial Services as a GIS Technician. Although GIS is a field of endless learning, she has used GIS in a wide variety of ways and is well rounded in GIS. Her resume is attached in Appendix B.PositionDutiesWage/Owner’s DrawCEO/Primary GIS ConsultantCustomer Service, GIS $30,000 ($5,000 annual raise)The CEO and primary GIS consultant is full-time position and is responsible for all duties of the business. This would include marketing, financial management, service delivery, GIS consulting with customers, public relations, and fundraising. The ideal CEO and primary GIS consultant would have a master’s degree in GIS. GIS Analyst (future)GIS Analysis, Customer Service$40,000 (2% annual raise)($40/hour)The GIS Analyst is a part-time position and is responsible for dealing directly with customers. Their role includes direct communication with clients and training customers (when the service is added). The ideal GIS Analyst would have a master’s degree in GIS or a bachelor’s degree in Geography/GIS and 2 years work experience. This position will become a full-time position.5.2 Personnel planThere will eventually be at least two positions at Business GIS Experts. The first position that has to be filled at all times is the CEO and primary GIS consultant. This role needs to be filled by the owner who extremely well rounded in all facets of the business. This person needs to be competent in both the business end of the company and very knowledgeable in GIS. They need to be able market our service, calculate the finances of our business, and deal with public relations. This person also needs to have worked with GIS for a long period of time. This position requires a master’s degree in GIS and some business background would be preferred. This position is paid $30,000 the first year with a $5,000 annual raise since the duties of the CEO are endless.The other position that may be created in year two or three is the GIS analyst. This position needs to have someone who is only focused on GIS and has good customer service skills. Therefore, they need to have ample background in GIS; the position requires a master’s degree in GIS or a bachelor’s degree in Geography/GIS and 2 years work experience. This person also needs to be friendly and patient with customers. This position would be considered an “entry-level” GIS job; therefore, an applicant with little or no work experience in GIS would be a good candidate. Consequently, the position will be paid $40 an hour since most entry-level GIS jobs are paid around this pay scale. The annual raise will be 2% for the current inflation rate.Both positions at Business GIS Experts require good GIS skills. In addition to good GIS skills, the CEO needs to be familiar with business practices and the GIS analyst needs to have exceptional customer service skills.Financial plan6.1 Important Assumptions and Startup FundingThere are some assumptions Business GIS Experts will assume about the company’s finances. These will determine whether or not the company can sustain itself the first few years.In year one, Business GIS Experts will already own a computer. As a result, this computer is placed in the owner’s equity and will be depreciated. Business GIS Experts will use straight-line depreciation. At the beginning of year one, the computer is estimated to cost $1,000 and will last approximately three years. Therefore, accumulated depreciation will be $333.00 a year for three years. One major start-up cost includes the software for GIS – ESRI’s ArcGIS which costs $2,000. This alone will not be sufficient enough for the company since this program only performs rudimentary GIS operations. As a result, Business GIS Experts will also purchase three extensions: Spatial Analyst, Geostatistical Analyst, and Network Analyst costing $1,500 for each extension. With the addition of taxes and shipping costs, the total cost of software will equal $7,000. The company will use straight-line depreciation with the life expectancy of the software to be three years. As a result, the total accumulated depreciation costs will equal $2,475 a year.Business GIS Experts will have little money available to market their product in the first year of business. As a result, the company expects to be able to spend $1,000 during the first year. By year two, the company expects to have enough cash to be able to put $2,500 and $3,000 towards marketing in years two and three respectively. Office supplies is a essential for the company. When the company begins, the need of office supplies is high and a large amount of money will be used for these supplies. For the startup, the company has budgeted $750 for supplies in year one. With an increase in hours and eventually employees, the company has budgeted $1000 and $2000 for years two and three.The company had to buy purchase a $49 business permit from the state of Minnesota in order to legally be in business. Along with a business permit, the company has to also buy a business license every year. This annual fee costs $2,280.Since Business GIS Experts will be a home-based company, the company will write-off 50% of the homeowners rent. The total monthly rate of rent equals $550 and $5,400 yearly; as a result, a yearly total $2,700 of rent will be written off. Utilities were also taken into consideration. Since utility bills will remain high due to a high usage of computers and other electronics, the full utility bill will be used. This figure equals $75 a month and $900 a year.Insurance is important in maintaining the business if and when anything to the software occurs. Business GIS Experts plans on purchasing “Professional Liabilities (Errors and Omissions) and Liabilities” insurance from Travelers Insurance CITATION Tra12 \l 1033 (Travelers Insurance, 2012). The insurance covers negligence, errors and omissions of data, and computer security such as viruses and unwanted access to the company’s computer system. First years sales are based on a growing number of hours worked over the course of a year. In the beginning of year one, our sales projections are small. However, by the end of year one, Business GIS Experts predicts an increased workload, and therefore an increased sales figure. The same thought-process was given to years two and three – as the company gains more notoriety and recognition, more sales are projected. For specific numbers, refer to section 4.7 in this proposal. Business GIS Experts plans on borrowing $10,000 in startup money with a 10% interest rate from the Saint Mary’s University alum. Beginning in January 2013, the first year’s principal payment will equal $1,622.68 and the interest payment will cost $926.96. The second year’s principal payment will equal $1,792.59 and the interest payment will cost $757.06. The third year will see an increase in principal payment a decrease in interest with figures equaling $1,980.30 and $569.35 respectively. Please refer to the amortization table in Appendix C for monthly payment figures.The owner’s draw will equal $30,000 for the first year. The company will increase the owner’s draw by $5,000 a year until the draw is equivalent to $60,000. At that point, further calculations will determine the draw. With the addition of a GIS Analyst in year three, the company assumes computer and software purchases, as well as a large wage. The new computer cost around $1,500; the company will purchase the same software and extensions bought in year one for the second computer. Therefore, the depreciation will be straight-line and equal the same costs.6.2 Projected Profit & Loss/Income StatementThe first year’s expenses will total around $13,000 and the expected sales will equal around $39,000. Therefore, the company expects around a $22,000 profit with taxes taken out. Surprisingly, Business GIS Experts expects a small profit for year one. Although there will only be around $150 in available cash for the company, with a large price markup, Business GIS Experts still expects to make a profit. The company expects to nearly double the amount of sales revenue in year two with the expenses increasing by only $2,000. Consequently, the company will have a large profit and will be able to hire a new employee at the beginning of year three. With sales steadily increasing in year three and new salary, the company expects the net profit to be nearly identical to year two’s net profit total. Business GIS Experts income statement is attached in the Appendix D.6.3 Projected Balance SheetEvery year, the company expects to continue to make more money. Total assets will grow in year two, but in year three, assets will decrease due to the purchase of a new computer and software. However, the owners equity will increase exponentially each year, thus increasing total liabilities and owners equity by $20,000 and $12,000 in years two and three respectively. The following income statement displays our findings. The balance sheet in Appendix D shows Business GIS Experts balance sheet. FIXED COSTS YEAR 1 YEAR 2YEAR 3 $2,700 $2,700 $2,700 Rent $900 $900 $900 Utilities $2,280 $2,280 $2,280 Business License $1,320 $1,320 $1,320 Insurance $49 --Business Permit $7,249 $7,200 $7,200 Total $21,649 Total Fixed CostsVARIABLE PROFIT PriceVariable CostPRICE = $70/hr $70 $35 VARIABLE $35 COST = $35/hrBREAK EVEN POINTFixed CostsVariable Profit $21,649 35?618.5428571BREAKEVEN (hours)Breakeven for Business GIS Experts is crucial in the long-term success of the company. After factoring together fixed costs and variable profit, the company has determined we will breakeven after working 618 hours. Our company has projected we will work 600 hours in the first year. Therefore, Business GIS Experts believes breakeven will occurs shortly after year 2. References BIBLIOGRAPHY (2008). Retrieved September 29, 2012, from GIS Certification Institute: (2011). Industry Repror: Global IT consulting & Other Services . New York: ?Datamonitor.Cartographers and Photogrammetrists. (2012, July 23). Retrieved October 1, 2012, from Occupational Outlook Handbook: , A. (2011, April 28). How Much Do GIS Consultants Charge in 2011? Directions Magazine .Global Industry Analysts, Inc.: Global Geographic Information Systems (GIS) Market to Reach US$10.6 Billion by 2015. (2012, January 17). San Jose, California.Haltiwanger, J., Jarmin, R., & Krizan, C. J. (2010). Mom-and-Pop meet Big-Box: Complements or substitutes?. Journal Of Urban Economics, 67(1), 116-134. doi:10.1016/j.jue.2009.09.003Martin, R. (2012, April 2). Annual Utility Spending on GIS Tools and Services Will Reach $3.7 Billion by 2017. Washington, DC: Pikes Research.MnGeo Project Services. (2012). Retrieved October 28, 2012, from Minnesota Geospatial Information Services: , F. (2011, December 30). Geospatial technologies will affect our future. Bangor. Retrieved October 1, 2012Sliwinski, A. (2002). Spatial Point Pattern Analysis for Targeting Prospective New Customers: Bringing GIS Functionality into Direct Marketing. Journal of Geographic Information and Decision Analysis , 6 (1), 31 - 48.Travelers Insurance. (2012). (2011). Industry Repror: Global IT consulting & Other Services . New York: ?Datamonitor. . Retrieved November 20, 2012, from Professional Liabilities: . (2012). Guide to College Majors in Geographic Information Systems. Retrieved 5 November, 2012, from Geographic Information Systems Major: A. GISP Members’ locations CITATION GIS08 \l 1033 (GIS Certification Institute, 2008).leftbottom00 centercenter00Appendix B. A copy of Jena Happ’s Resume Appendix C. Amortization ChartPrincipal PaymentInterest PaymentPrincipal BalanceTotal PaidMonth@10%@10%@10%@10%13-Jan$129.14 $83.33 $9,870.86 $212.47 13-Feb$130.21 $82.26 $9,740.65 $424.94 13-Mar$131.30 $81.17 $9,609.35 $637.41 13-Apr$132.39 $80.08 $9,476.96 $849.88 13-May$133.50 $78.97 $9,343.46 $1,062.35 13-Jun$134.61 $77.86 $9,208.85 $1,274.82 13-Jul$135.73 $76.74 $9,073.12 $1,487.29 13-Aug$136.86 $75.61 $8,936.26 $1,699.76 13-Sep$138.00 $74.47 $8,798.26 $1,912.23 13-Oct$139.15 $73.32 $8,659.11 $2,124.70 13-Nov$140.31 $72.16 $8,518.80 $2,337.17 13-Dec$141.48 $70.99 $8,377.32 $2,549.65 2013 PAYMENTS$1,622.68 $926.96 14-Jan$142.66 $69.81 $8,234.66 $2,762.12 14-Feb$143.85 $68.62 $8,090.81 $2,974.59 14-Mar$145.05 $67.42 $7,945.76 $3,187.06 14-Apr$146.26 $66.21 $7,799.51 $3,399.53 14-May$147.47 $65.00 $7,652.03 $3,612.00 14-Jun$148.70 $63.77 $7,503.33 $3,824.47 14-Jul$149.94 $62.53 $7,353.39 $4,036.94 14-Aug$151.19 $61.28 $7,202.20 $4,249.41 14-Sep$152.45 $60.02 $7,049.74 $4,461.88 14-Oct$153.72 $58.75 $6,896.02 $4,674.35 14-Nov$155.00 $57.47 $6,741.02 $4,886.82 14-Dec$156.30 $56.18 $6,584.72 $5,099.29 2014 PAYMENTS$1,792.59 $757.06 15-Jan$157.60 $54.87 $6,427.12 $5,311.76 15-Feb$158.91 $53.56 $6,268.21 $5,524.23 15-Mar$160.24 $52.24 $6,107.98 $5,736.70 15-Apr$161.57 $50.90 $5,946.41 $5,949.17 15-May$162.92 $49.55 $5,783.49 $6,161.64 15-Jun$164.27 $48.20 $5,619.22 $6,374.11 15-Jul$165.64 $46.83 $5,453.57 $6,586.58 15-Aug$167.02 $45.45 $5,286.55 $6,799.05 15-Sep$168.42 $44.05 $5,118.13 $7,011.52 15-Oct$169.82 $42.65 $4,948.31 $7,224.00 15-Nov$171.23 $41.24 $4,777.08 $7,436.47 15-Dec$172.66 $39.81 $4,604.42 $7,648.94 2015 PAYMENTS$1,980.30 $569.35 Appendix D. Income Statement and Balance Sheet.Business GIS ExpertsIncome Statement???201320142015Revenue?? Sales $39,200 $75,600 $126,000 ? Gross Margin $39,200 $75,600 $126,000 Expenses??Marketing $1,000 $2,500 $3,000 ?Supplies $750 $1,000 $2,000 ?Wages $- $- $40,000 ?Payroll Taxes $- $- $3,200 ?Licences/Permits $2,329 $2,280 $2,280 ?Insurance $1,320 $1,320 $1,320 ? Depreciation $2,808 $2,808 $5,783 ? Rent $2,700 $2,700 $2,700 ? Utilities $900 $900 $900 ? Interest $926.96 $757.06 $569.35 ? Total Expenses $12,733.96 $14,265.06 $61,752.35 ??? EBITA $26,466.04 $61,334.94 $64,247.65 ? Income Tax 15% $3,969.91 $9,200.24 $9,637.15 ???Net Profit/(Loss) $22,496.13 $52,134.70 $54,610.50 ?????Business GIS ExpertsBalance Sheet???Assets201320142015? Cash $151.35 $27,501.70 $47,052.05 ? Equipment $8,500.00 $8,500.00 $17,000.00 ? Less: Accumulated Depreciation $(2,808.00) $(5,616.00) $(11,399.00)? Total Assets $5,843.35 $30,385.70 $52,653.05 ??Liabilities?? SMU Alum Loan $8,377.32 $6,584.73 $4,604.43 ??Owner's Equity??Jena Happ, capital $(2,533.96) $23,800.98 $48,048.63 ??? Total Liablities & Owner's Equity $5,843.36 $30,385.71 $52,653.06 ????? ................
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