Computer Hardware Reseller Business Plan

The home offices in Tintown are an important growing market segment. Nationally, there are approximately 30 million home offices, and the number is growing at 10% per year. Our estimate in this plan for the home offices in our market service area is based on an analysis published four months ago in the local newspaper.

Home offices include several types. The most important, for our plan’s focus, are the home offices that are the only offices of real businesses, from which people make their primary living. These are likely to be professional services such as graphic artists, writers, and consultants, some accountants and the occasional lawyer, doctor, or dentist. There are also part-time home offices with people who are employed during the day but work at home at night, people who work at home to provide themselves with a part-time income, or people who maintain home offices relating to their hobbies; we will not be focusing on this segment.

Small business within our market includes virtually any business with a retail, office, professional, or industrial location outside of someone’s home, and fewer than 30 employees. We estimate 45,000 such businesses in our market area.

The 30-employee cutoff is arbitrary. We find that the larger companies turn to other vendors, but we can sell to departments of larger companies, and we shouldn’t be giving up leads when we get them.

5.1 Strategy Pyramid

For placing emphasis on service and support, our main tactics are networking expertise, excellent training, and developing our own proprietary software/network administrative system. Our specific programs for networking include mailers and internal training. Specific programs for training include direct mail promotion, and train-the-trainers programs. For developing our own proprietary systems, our programs are company direct mail marketing, and working with VARs.

Our second strategy is emphasizing relationships. The tactics are marketing the company (instead of the products), more regular contacts with the customer, and increasing sales per customer. Programs for marketing the company include new sales literature, revised ad strategy, and direct mail. Programs for more regular contacts include call-backs after installation, direct mail, and sales management. Programs for increasing sales per customer include upgrade mailings and sales training.

5.2 Value Proposition

Our value proposition has to be different from the standard box-oriented retail chain. We offer our target customer, who is service seeking and not self reliant, a vendor who acts as a strategic ally, at a premium price that reflects the value of reassurance that systems will work.

5.3 Competitive Edge

Our competitive edge is our positioning as strategic ally with our clients, who are clients more than customers. By building a business based on long-standing relationships with satisfied clients, we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer them and why they need it.

5.4 Sales Strategy

1. We need to sell the company, not the product. We sell AMT, not Apple, IBM, Hewlett-Packard, or Compaq, or any of our software brand names.
2. We have to sell our service and support. The hardware is like the razor, and the support, service, software services, training, and seminars are the razor blades. We need to serve our customers with what they really need.
3. The Yearly Total Sales chart summarizes our ambitious sales forecast. We expect sales to increase from $5.3 million last year to more than $6 million next year and to more than $9 million in the last year of this plan.

5.4.1 Sales Forecast

The important elements of the sales forecast are shown in the Total Sales by Month in Year 1 table. The non-hardware sales increase to over $2 million total in the third year.

5.4.2 Sales Programs

1. Direct mail: Use great detail to describe your company’s programs here.
2. Seminars: Use great detail to describe your company’s programs here.

5.4.3 Distribution Strategy

Our most important marketing program is [specifics omitted]. Leslie Doe will be responsible, with budget of $XX,XXX and milestone date of the 15th of May. This program is intended to [objectives omitted]. Achievement should be measured by [specific concrete measurement].

Another key marketing program is [specifics omitted]. [Name] will be responsible, with budget of $XX,XXX and milestone date of [date]. This program is intended to [objectives omitted]. Achievement should be measured by [specific concrete measurement].

5.5 Marketing Strategy

The marketing strategy is the core of the main strategy:

1. Emphasize service and support.
2. Build a relationship business.
3. Focus on small business and high-end home office as key target markets.

5.5.1 Promotion Strategy

We depend on newspaper advertising as our main way to reach new buyers. As we change strategies, however, we need to change the way we promote ourselves:

Advertising
We’ll be developing our core positioning message: “24 Hour On-Site Service – 365 Days a Year With No Extra Charges” to differentiate our service from the competition. We will be using local newspaper advertising, radio, and cable TV to launch the initial campaign.

Sales Brochure
Our collaterals have to sell the store, and visiting the store, not the specific book or discount pricing.

Direct Mail
We must radically improve our direct mail efforts, reaching our established customers with training, support services, upgrades, and seminars.

Local Media
It’s time to work more closely with the local media. We could offer the local radio a regular talk show on technology for small business, as one example.

5.5.2 Pricing Strategy

We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge.

We cannot build the service and support revenue into the price of products. The market can’t bear the higher prices and the buyer feels ill-used when they see the same product priced lower at the chains. Despite the logic behind this, the market doesn’t support this concept.

Therefore, we must make sure that we deliver and charge for service and support. Training, service, installation, networking support–all of this must be readily available and priced to sell and deliver revenue.

5.5.3 Positioning Statement

For businesspeople who want to be sure their computer systems are always working reliably, AMT is a vendor and trusted strategic ally who makes sure their systems work, their people are trained, and their down time is minimal. Unlike the chain retail stores, it knows the customer and goes to his or her site when needed, and offers proactive support, service, training, and installation.

5.6 Milestones

Our important milestones are shown on the following table. Row by row, they track the need to follow up on strategy with specific activities. Most of the activities on the list can be easily tied to our strategic goals of selling more service and enhancing the relationship with the customer.