NERDHER
• break-even analysis
D (Appendix V)
contents______________
_______
I) Business Ownership &
Description
• prime function
• business name
• mission statement
• legal structure
• business & personal goals
• staffing/personnel
II) Marketing
• target market
• competition
• marketing mix
• marketing strategies
• SWOT analysis
(Appendix I)
III) Finance
• establishment costs
(Appendix II)
• sales forecast
(Appendix III)
(Appendix IV)
• cash flow analysis
IV) Business Prospects
• why NH will be successful
• future prospects / vision
statement
V) Appendices
ownership &
description_
Prime Function
NerdHerd is an online forum, its
main aim being to provide easy,
convenient access for its members
to quality technical support. This
support will be given by the
business’ highly experienced
employees; the Nerds.
The forum will not only be a means
of communication between
customers and professionals; it will
become an online community
where the forum’s members can
meet, discuss computer-related
topics and make new friends with
similar interests.
Business Name
The name of the business is
NerdHerd. It is catchy as well as
humorous, making it memorable.
The effect of this is that when a
consumer needs help with their PC,
the first forum to come to mind will
be – this one.
Naming the business NerdHerd
will also give the customer an idea
of what to expect from the forum
upon purchasing their membership.
“Nerd” carries the positive
connotation of knowledge –
employees will have the know-how
to help with any technical
difficulties. Also, “Herd” implies a
tight knit group of like-minded
people.
Mission Statement
The NerdHerd mission statement
outlines all the hopes that are held
for the business’ direction. It sets
the guidelines for how the business
will operate and reflects its values.
NerdHerd’s mission:
• work to consistently provide
the best technical support to
its members in regard to
their PCs; anything, anyone,
anywhere, anytime at all
• build and maintain positive
relationships between the
“Nerds” and the “Herd” i.e.
the business’ employees, and
its customers
• act as a convenient meeting
place where people with
common interests and skills
can connect
Legal Structure
NerdHerd will be established as a
partnership as it is one of the
easiest legal structures that a
business can assume; it is not
costly or complicated.
Because this is an online business
that may need moderation at all
hours, the stress put upon the
forum’s webmasters will be divided
and therefore, handling of the site’s
operations will be made much
more manageable with 2-3 people
on hand.
Business Goals
Financial goals:
• to break-even within the first
year of the forum’s
operation, keeping start-up
costs to a minimum
• to use acquired profit to
invest back into the business
and improve the service
available to its customers
Social goals:
• establish a solid, loyal client
base
 • to be aware of changing
technology, keeping up to
date for the benefit of the
forum’s members
• gain a positive reputation as
a technical support forum
that can rival already well-
established sites
• to become a stepping-stone
for people in IT to make
connections, and for those
starting out in the industry to
gain experience
Personal goals:
• make working at the
NerdHerd forum enjoyable,
for the owners as well as the
employees
• to create not only a sense of
fulfillment, but of financial
security for the staff and the
owners
Short-term goals:
• to have the site come
together without difficulty, up
and running as soon as
possible
• to break-even and start to
generate profit within one
year of operation
• to set the framework and
foundation for how the
business will operate in the
years to come
Long-term goals:
• to build up the business’
reputation as one that
provides the best available
technical support; quickly,
and in a friendly, helpful
setting
• to gain a large share of the
market, and for NerdHerd to
be able to set itself apart
from other technical support
services
• to possibly expand into other
operations relating to IT, e.g.
offering support for a wider
range of electronic devices,
or selling PC’s
Staffing & Personnel
The staff who are employed play a
major role in any business but at
NerdHerd, the way in which these
employees conduct themselves is
of the utmost importance.
NerdHerd’s main aim is of course
to inform and assist. It is required
of every applicant that they have
accumulated experience of at least
one year, in the operation of; a
blog, a webzine or other
forum/website.
As a minimum, they must also
have completed a TAFE course
related to the specialised area they
are applying to work in. For
example; anti-virus software,
hardware drivers, operating
systems.
Because the business is centralized
around the exchange of
information between parties, one of
the most important traits a Nerd
must possess is communication
skills so they can effectively
portray their knowledge to the
members of the forum.
The process of selection will work
through a number of steps. Firstly,
the applicant files an application
form detailing their qualifications
and previous experience.
Then to narrow down promising
candidates, an interview will be
held (most likely over the internet)
where the business’ owners can
evaluate the hopeful’s social and
communication skills, their
enthusiasm and their
appropriateness for the position.
If successful, potential Nerds are
put in a set trial period where the
forum’s webmasters or head
moderators will monitor their
performance and activity.
The way in which NerdHerd will
reach its aim of distinguishing itself
from other sites supplying technical
support, is the manner in which
this support is delivered. It is
paramount to the business’
success that the Nerds it employs
can interact positively with forum
members, building on customer
relationships. They must be honest,
polite, friendly and welcoming for
NH to thrive.
marketing____________
_______
Target Market
NerdHerd has a very open target
market. This of course includes
adults and teens, who use their
computers often. The information
and advice posted on the forums
can be applied to any computer,
regardless of who it belongs to.
Because the forum is more like a
community that will attract all sorts
of users, there will always be
experts on hand to deal with very
specific problems.
E.g. those faced by gamers, office
workers, or people who use laptops
for portability.
The other way in which NerdHerd
will attract clients is the fact that it
is a hub for IT industrialists,
presenting the opportunity to make
useful friends and connections.
Competition
NerdHerd will operate in a
monopolistic competition, meaning
that there are many equivalent
services on offer.
Very obviously, the business’
biggest competitors are those that
have already been operating for a
long period of time, and hold a
large portion of the market.
To overcome this obstacle,
NerdHerd intends to differentiate
itself by providing the same service
but;
• doing it better
creating a different feel, and
offering more than JUST
advice.
the Nerds will all be
encouraged to shape positive
relationships with the forum’s
members, adding that little
something that other forums
lack
• doing it cheaper
by observing and following
the pricing of close
competitors, NerdHerd, will
know how to reasonably set
its prices in order to win
some of the market.
Marketing Mix; the 4 P’s
• Product
The service provided to the
members of the NerdHerd forum
and community will only ever be
that of an unsurpassed level.
The focal aim of the business will
be to offer to its members
assistance related to their
computers. Once the member is
logged in; they can visit the
boards, make posts, start
discussions, ask questions, answer
questions, read blogs, and make
friends.
The Nerds employed at the forums
will answer any questions they see
posted on the boards. There will be
separate boards for specific topics
(e.g. printers and hardware; sound
devices; anti-virus) and each will
be assigned an experienced
moderator who has knowledge of
the area.
Not only that, but since NerdHerd
will be portrayed as an online
community, there will be general
boards where members can
socialise with each other freely.
• Price
Upon finding the website,
consumers will be able to browse,
but not post on, a limited number
of the forum’s boards in order to
get a glimpse of what they can
expect. The next step, of course, is
purchasing a membership so as to
get full access to the websites
features.
The memberships work through
monthly payments of $15. From the
day the customer signs up for a
NerdHerd account, they have a
pass into the forum for 30 days.
Memberships can be extended, and
can also be paid for in advance.
Because it is an online business set
on time periods, the easiest and
fastest way to carry out
transactions will be by PayPal or
BPay. Those wishing to become
members require one of the above
accounts, to transfer money from
theirs to the account held by the
NerdHerd business owners.
• Place
Most homes, in developed
countries all over the world, have a
computer connected to the
internet. The same goes for
schools, libraries and workplaces.
The World Wide Web has made it
very easy to access a universe of
information.
The NerdHerd forum will be
“located”, so to speak, at an easy
to remember web address –
http://www.nerdherd.com. This will
make visiting the forums quick and
simple.
Being an online business means
that no premises is directly
required. The business’ operations
are controlled almost entirely while
sitting in front of a computer, and
can be run from a home office. The
same goes for employees, who can
log in and post on the forum from
anywhere in the world.
• Promotion
Promotion and advertising will be a
huge factor in the success of
NerdHerd. If people are not aware
of the business, the business will
not make any money.
This is especially the case where
fierce monopolistic competition
makes it difficult to discern
between similar businesses.
Advertising for the launch of
NerdHerd will begin before the
actual opening, so as to attract
attention to the forum and begin to
make money as quick as possible.
NerdHerd is an online business, so
it only makes sense to do a lot of
the promotion for it online. Banners
and links on affiliate pages and
pages related to IT or computers,
will lead users to webpage.
Apart from advertising online,
NerdHerd might also employ the
following types of media to raise
awareness for the business:
• radio ads
• television
• IT magazines, newspapers
• flyers
• word-of-mouth
Marketing Strategies
NerdHerd’s marketing strategy is
very straightforward – to highlight
what this business has, that its
competitors don’t.
To begin with, the forums’ Nerds
will be tried and tested for
competence, so that members will
never have any trouble getting
help fixing their problem. In
addition, NerdHerd is a pleasant,
welcoming community where
someone always be keen to help
out a member.
SWOT analysis
The SWOT analysis is a great tool
used by businesses. It lays out the
conditions in which a business is
being established, and makes it
much easier to assess all of the
risks and possible outcomes.
See (Appendix I).
finance_______________
________
Establishment Costs
This is a list of necessary costs to
the successful launching of
NerdHerd. For table of start-up
costs, see (Appendix II).
• new computers
• operating systems, software
• servers, a domain name *
• business name registration
• hi-speed internet connection
* $15,000.
• forum layout design
• advance pay for staff, 8
weeks
• stationery
• PayPal account *
• advertising
• electricity
(*) outsourced services that have
been bought with 12 month
contracts; e.g. renting server space
for a locked 12 month period, at a
fixed rate of $150/month.
Sales Forecast
The sales forecast indicates that
cash flow will start sluggishly, but
that the purchase of memberships
will snowball rapidly as word gets
out of the new forum.
Taking into account that the sale of
memberships in the first 1 – 2
months will be slow, it is estimated
that in the first quarter of
operation, the forum will gain an
average of 105 members a week,
therefore around 1,260
memberships. This equals to
$18,900 = approx. $6,300 per
month.
Sales will pick up by the second
quarter, escalating to another
possible 800 subscriptions each
month = $12,000.
At the height of its popularity,
NerdHerd expects to gain 1,000
new members a month, making for
Counting for 3 months of lethargic
sales, and another 3 in the first
year where the forum is building up
its good reputation, the forecasted
opening year sales balance sits at
$144,900.
See (Appendix III) for
calculations.
Break-even Analysis
See (Appendix IV).
Cash Flow Analysis
See (Appendix V); breaks down NerdHerd will succeed because of
the projected monthly cash flow for the approach taken by the owners
the first 12 months of the business’ and staff to their work.
operation.

business
prospects________
Why Will NerdHerd
Succeed?

appendices_______________________________________
_________________
SWOT Analysis (Appendix I)
 STRENGTHS – Internal
Factors
• employee dedication to
providing the highest quality
service, team of staff are eager
and experienced
• positive relationships built
between members, between the
members and the employees,
and a strong sense of
community leads to client loyalty
• technical support is available for
every possible complication;
technicians employed are
specialised in all different areas
of IT
• relatively low start-up costs;
means owners of the business
can put focus and energy into
bettering the service, as well as
breaking-even much sooner
WEAKNESSES – Internal
Factors
• lack of reputation and a strong
client base at the business’
startup
• very slow cash inflow to begin
with, as business picks up and
the forum gains members
• disputes within the business,
between partners, can cause
complications
• unlimited liability; if the business
fails or is faced with
legal/financial issues, costs must
be accepted by the owners
 OPPORTUNITIES –
External
• advancing technology in society
means almost every family or
household has a computer they
regularly use
• further expansion of the
business into other parts of IT,
such as; providing technical
support on phones, cameras,
iPods etc and not just PC’s;
developing the service to also
work through a call centre;
merging with an online company
that buys & sells computers;
THREATS – External Factors
• competitors may already be well-
established, making it harder to
gain market share
• improvements of technology
may make the need for this
service obsolete
• demand for technicians in the IT
industry may increase or
availability may fall; this forces
wages higher and therefore
makes the service costlier
• accelerating trends show an
increasing number of IT
businesses taking to the internet
– could become competition

420 x $15 = $6,300

Establishment Costs
(Appendix II) • next 3 months
Sales forecast per month
800 x $15 = $12,000
Computers $8,000
Software $500
• after 6 months
Servers $1,800
Sales forecast per month
Name Registration $600
1000 x $15 = $15,000
Internet $2,400
PayPal $100
$(6300 x 3) +
Layout Design $500
(12000 x 3) +
Advance Pay $7,200
(15000 x 6)
Advertising $3,000
= $144,900 = forecasted
Stationery $100
opening year
TOTAL $26,6 sales balance
00

Sales Forecast (Appendix

III)

•establishment, first 3
months
Sales forecast per month
BREAK-EVEN ANALYSIS
(Appendix IV)

Sales $1449
COSTS 00 FIXE VAR.
D
Less
costs $6000 $6000
Advertisin $3200 $320
g $2400 $2400 0
Electricity $600 $600
Internet $69000 $6900
Servers 0
Staff
PROFIT $6370 $780 $320
0 00 0

Contribution margin calculation

= 1 – variable cost/sales
= 1 - $3200/$144900
= 0.97
Therefore, each dollar earnt
contributes $0.97 to meeting fixed
costs

Contribution = sales – variable

costs
= $144900 - $3200
= $141700

Break-even calculation
= fixed costs/contribution margin
= $78000/0.97
= $80,412.37
Therefore once sales exceed
$80,412.37, NerdHerd will begin
making a profit.
CASH FLOW ANALYSIS (Appendix IV)
PROJECTED MONTHLY CASH FLOW FOR “NERDHERD” ; YEAR ENDED AUGUST
Opening cash balance $73,550
Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Receip
ts $630 $630 $630 $120 $120 $120 $150 $150 $150 $150 $150 $1500
Sales 0 0 0 00 00 00 00 00 00 00 00 0
Total
receipt $630 $630 $630 $120 $120 $120 $150 $150 $150 $150 $150 $1500
s 0 0 0 00 00 00 00 00 00 00 00 0
Payme
nts $100 $100 $100 $100 $100 $100
Adverti 0 0 0 $800 0 0 0 $800
sing $200 $800 $200 $200 $200 $800 $200 $200
Electrici $200 $50 $200 $50 $200 $50 $200 $50 $200 $50 $200 $50
ty $50 $300 $50 $500 $50 $500 $50 $750 $50 $750 $50 $7500
Internet $300 0 $300 0 $500 0 $750 0 $750 0 $750
Servers 0 0 0 0 0 0
Staff
Total $425 $325 $505 $525 $625 $605 $875 $775 $955 $775 $875 $8550
payme 0 0 0 0 0 0 0 0 0 0 0
nts
Net $205 $305 $125 $675 $575 $595 $625 $725 $545 $725 $625 $6450
cash 0 0 0 0 0 0 0 0 0 0 0
movem
ent
Add
open $735 $756 $786 $799 $866 $924 $983 $104 $111 $117 $124 $1308
bank 50 00 50 00 50 00 50 600 850 300 550 00
balanc
e
Closin
g bank $756 $786 $799 $866 $924 $983 $104 $111 $117 $124 $130 $1372
balanc 00 50 00 50 00 50 600 850 300 550 800 50
e