Note: This is the text from the body of a business plan submitted to the SBA, and reviewed by the Harvard Sq. Business Association (01/03/94).
Today’s computing services are built around the needs of users in specific situations. Businesses provide employees with business applications to do their job. In education, software for classes is available for students in public computer centers or “learning labs.” People have computers at home so they can do the things they do not do at work or school including games and hobbies. Many user’s computing needs appear to be filled already. But upon closer examination, this is not necessarily so! There are many computing needs that are not addressed through fragmented computing environments designed to meet specific goals. There are few individuals, businesses, or schools that possess
a full complement of hardware and software for business, education, entertainment and multimedia production all at the same time! No matter where people fill their common computer service needs, there are often some unavailable services. Cost is often the reason. Even when cost is not prohibitive, time, space or expertise can prevent the acquisition and maintenance of equipment and software. Studio E specializes in providing commercial computer services to the general public that are not otherwise
always accessible under equally desirable conditions (e.g., time, cost, quality support, atmosphere).
Formula for Success
There are risks associated with any venture into commercial computing services
at this time. The following pages highlight the risks and strategies designed
to mitigate them.
Market, Competition and Risk There is a risk in any business that there will be a lack of demand. To address this risk at a general level, Studio E is locating in the Cambridge/ Boston area where a high demand for computing is found in tandem with an education oriented population.
The Boston / Cambridge area is home to 65 major colleges, universities,
as well as other smaller educational institutions. These demographics
contribute to Studio E’s chances of success. Studio E’s success will
also be a function of its breadth of service. A wide spectrum of services
should attract a large and diverse group of customers. The challenge will
be to attract diverse customers who have different needs created by different
limitations of typically available computing resources, level of disposable income, location and mobility. A further challenge is to carefully attract target markets to produce utilization evenly distributed across time of day and year.
The above challenges are framed within service areas based upon four key needs
filled by computers. The chart below illustrates the relationship between
these needs, computer software and services used to fill them, and the types
of computer service centers frequently used as resources.
|Need||Service & Software||Public / Commercial Source|
|Empowerment||Productivity and Business||Work and Commercial Centers|
|Entertainment||Games and Hobbies||Arcades, Organizations and Home|
|Education||Instruction Learning||Labs at Schools or Home|
|Expression||Multimedia Production||Commercial Mastering Facilities|
In each of these service areas, there are organizations offering related services to a segment of Studio E’s market. A selling basis for Studio E is that these services are all always available in a single location on a walk-in basis.
Customers will be assured that when they occasionally have computing “needs”
that fall outside the capabilities of their present situations, there is a
single place to go whenever they want! Studio E will also adapt to customer’s
individual needs, continuously craft its services to fit the niches left by others, and move rapidly to adapt to emerging local opportunities. Studio E’s rule of survival will be that if there is not an aspect to its service that is different from what is offered elsewhere, then the service should be enhanced.
Price There are well-acknowledged adverse economic conditions prevailing at this time.
There is a risk that this will affect the amount customers invest in computing services.
This risk will be addressed through the use of competitive pricing, in addition to enhanced services. Studio E pricing will be highly competitive! During a recession such as the one we are in, customers are at their most price-conscious. This will turn economic disadvantage to advantage for Studio E. This competitive pricing strategy will reduce the profit margin per sale, but a small shift downwards in the cost of computing services at this time will result in higher sales due to the pressure for computing to become essential in an economic climate prohibitive to this reality.
Location, Facilities and Environment Studio E will be centrally located to reach both local markets and wider markets in the Boston area.
It will be on a major street so that heavy flow of automobile and pedestrian
traffic will contribute to visibility and general public awareness.
Easy accessibility of the location from the red and green “T” lines will be useful.
There are currently no competing computing services in the immediate area,
while there is a copy shop with no on-site computer rental. The exterior of the
location will look like a business, be on a first floor that is easily visible
and immediately accessible from the street. Large display windows will be an
important feature. They will allow displays and activities inside the store
to be observed from outside. This will help establish an image in customer’s minds.
Customer support will be one of their major concerns for all types of computing services offered at Studio E. Most services will be available on an appointment or walk-in basis, and then will be supported by a manager at all times. A referral service will also add value, and allow Studio E to be perceived as a resource for a much wider variety of services and products than available on site. To adapt to the individual needs of as many customers as possible, Studio E will use surveys to identify new services people want, what conditions they prefer, how much they will pay, and how far they will travel.
Research and Development
The computing industry upon which Studio E is founded is volatile, so an inherent risk is failure to cope with rapid shifts in state of the art technology. This risk will be addressed through a significant reinvestment of profits in research and development to keep abreast of developments in the field. The initial investment in computers will provide a complete range of computing capabilities instead of a large number of stations.
These initial facilities will be enhanced on a daily basis. The level and number of computers will be upgraded often, with at least one of the most powerful computers available in each platform available soon after it is released. Beyond basic computing stations, emphasis will be placed on acquiring interesting and powerful peripherals for input and output. Investments in research and development will also include finding unique applications and combinations of technology, rather than only acquiring equipment and software.
Advertising and Promotion
Adequate target market selection, pricing strategy, location and customer support still won’t guarantee Studio E’s success.
A fundamental thrust of Studio E’s strategy is convincing customers that there is a comprehensive environment that will fill the needs created by the gaps in the computing environments they currently use. One key to the success of this strategy is making sure that the message is successfully communicated to the public through advertising and promotion. Simple advertising efforts will begin with a sign and interesting exhibits set up in the store clearly visible from the street to portray an innovative and forefront image. Studio E business cards, letter head and specialty items will be distributed liberally in dealings with the public to raise public awareness.
When people come into the store, they will be given a few minutes to explore for free in return for providing their name and address. This will generate a mailing list for periodic direct mailings of a Studio E update/newsletter. General adds will be placed in widely distributed media like “The Globe,” local newspapers and the yellow pages.
Information about each type of service will be also be placed in publications that maximize exposure to specific markets.