e-Commute Consultants

March 26, 2001

Presented by:

Gita Ravindran

Asokan Thurairajah

Executive Summary

e-commute has been formed to provide telework solutions to businesses. Teleworking is rapidly on the rise as companies struggle to find available and affordable office space and strive to find ways to improve employee productivity. e-commute proposes to provide consulting services to its clients to determine the feasibility of a telework program at their office, develop an implementation plan, put that plan into action by installing workstations equipped with features such as video communications and a high-speed connection to the company's intranet, and provide on-going technical support and training. Such programs would allow employees to work at part, if not all, of the time with the option of hotelling teleworkers to minimize isolation.

The target market for the business is centered around the high-tech sector which is growing at a rapid pace, but also includes the general corporate sector and public sector. Based on the adoption rates of teleworking in Europe and the United States, the number of teleworkers in Canada can be expected to rise significantly in the future.

The company will be Ottawa-based, owned by its principal investors and operators, with a management team consisting of a President, Chief Financial Officer and Chief Operations Officer. e-commute will position itself in the market as the leader in teleworking services in Canada by first securing the Ottawa region, then by expanding its sales offices to include additional major business centers in Canada.

Start-up will require an initial investment or loan of $25000, with the business delivering an average annual return on equity of 94%. Net profits of over $1.1 million are expected by year 5.

e-commute will deliver unrivaled services which are in demand but currently unavailable to most businesses due to lack of comparable service providers.

1.0 Objective

1. Sales of 160 seats by April 2002 and sales of 500 seats by April 2003.

2. Gross margin higher than 40%.

3. Maintain a net income more than 15% of sales.

1.1 Mission

e-Commute Consultants' mission is to offer clients reliable and practical solutions to increase employee productivity and therefore increasing its clients' profitability. The company's main priority is customer satisfaction.

1.2 Keys to Success

1. Excellence in fulfilling the promise- completely reliable, user friendly, office-compatible home systems and expert client evaluation and customer support.

2. Developing visibility to generate new business leads.

2.0 Company Summary

e-Commute Consultants is a new start-up company based in Ottawa that is owned by its principle operators and investors.

2.1 Company Ownership

e-Commute Consultants will be created as a corporation based in Ottawa, owned by its principal investors and principal operators. As of this writing, it has not been chartered and is still considering alternatives of legal formation.

2.2 Start‑up Summary

The start-up costs come to $5100, which is mostly stationery, legal costs, and expenses associated with purchasing the first company home office system. The start-up costs are to be financed by direct owner investment. The company have assumed a short term loan of $25000 for operating cost for the first year. The assumptions are shown in the following table and chart.

Start-up Plan

Start-up Expenses

Legal

$600

Stationery etc.

$100

Brochures

$200

Consultants

$0

Insurance

$200

Rent

$0

Research and development

$0

Expensed equipment

$3,500

Other

$500

Total Start-up Expense

$5,100

Start-up Assets Needed

Cash Requirements

$2,000

Other Short-term Assets

$0

Total Short-term Assets

$2,000

Long-term Assets

$0

Total Assets

$2,000

Total Start-up Requirements:

$7,100

Left to finance:

$0

Start-up Funding Plan

Investment

Owner

$5,000

Owner

$0

Other

$0

Total investment

$5,000

Short-term Liabilities

Unpaid Expenses

$0

Short-term Loans

$25,000

Interest-free Short-term Loans

$0

Subtotal Short-term Liabilities

$25,000

Long-term Liabilities

$0

Total Liabilities

$25,000

Loss at Start-up

($28,000)

Total Capital

($23,000)

Total Capital and Liabilities

$2,000

Checkline

$0

2.3 Company Locations and Facilities

e-Commute Consultants' initial office will be established in the personal homes of the owners in the Ottawa "Silicon Valley North" area of Ontario, the heart of the Canadian high tech industry.

3.0 Services

e-Commute Consultants offers consultation, implementation and support of home office systems and office network adaptation.

3.1 Service Description

1. Consultation: the company offers office and home evaluation, feasibility, system design and cost estimate.

2. Implementation: the company offers complete implementation of home office systems and compatible office network connectivity and capability.

3. Support and Maintenance: the company will provide complete 30 day free support and maintenance with an option of extended support contracts.

3.2 Competitive Comparison

There are no visible competitors that offer complete telework solution to businesses in the local Ottawa area. The most similar company that could be considered as competition is 'InnoVision'.

InnoVision provides training and education to telework employees.

3.3 Fulfillment

1. The key fulfillment of the business will be valuable, expert consulting, providing quality home office systems and maintaining excellent performance of office systems by support and maintenance.

2. The company will turn to qualified professionals for large implementation contracts, which will not risk the core value provided to the clients.

3.4 Technology

e-Commute Consultants will move forward with leading edge technology and provide their clients the best quality systems that fulfill their needs.

3.5 Future Services

In the future, e-Commute Consultants will provide many other telecommuting related services such as, e-Conferencing, e-Meeting and e-Training.

4.0 Market Analysis Summary

e-Commute Consultants has been formed to provide telework solutions to businesses. In order to increase employee productivity and business profitability, employees need to be given the opportunity to contribute to their organization at their optimal time. Most of the best creative hours occur when the employee is at home. In addition teleworking is rapidly on the rise, particularly within Canada, as employees experience increasing commuting costs and time and as company's struggle to find available and affordable office space.

e-Commute Consultants proposes to provide consulting services to its clients to determine the feasibility of a home-office program at their organization, develop an implementation plan, put that plan into action by installing workstations equipped with features such as video communications and a high-speed connection to the company's intranet, and provide on-going technical support and training. Such programs would allow employees to work remotely at part, if not all of the time, with the option of hotelling teleworkers to minimize isolation.

4.1 Market Segmentation

The market is divided into three relatively distinct segments: the high-tech corporate (mainly mid to large sized companies) segment, the general corporate segment, and the public (government) sector segment.

Market Analysis
Potential Customers
Growth	2001	2002	2003	2004	2005	CAGR
Hi Tech Corporate Segment
10%	63,000	69,300	76,230	83,853	92,238	10.00%
General Corporate Segment
10%	70,000	77,000	84,700	93,170	102,487	10.00%
Public Sector Segment
-1%	71,000	70,290	69,587	68,891	68,202	-1.00%
Total
6.55%	204,000	216,590	230,517	245,914	262,927	6.55%

4.1.1 Target Market Segment Strategy

1. High-tech Corporate Segment: This segment includes our target industry, the high-tech sector, including contracting and consulting firms. Within this market, our initial geographic target areas include major high-tech centers within Canada (i.e., Toronto, Ottawa, Vancouver, Montreal). The core services aimed at this segment are the very similar to those aimed at the other two segments, but are driven mainly by functionality. However, the service packages are more expensive because they offer more flexibility in terms of workstation customization and supplementary service options and because of the increased complexity of implementing systems with higher technology requirements.

2. General Corporate Segment: Customers in this segment will be offered the same core services as the other segments, but with the available service packages being based on a compromise between functionality and cost.

3. Public Sector Segment: This segment is driven by lower price, but would likely be interested in investing in feasibility study services before investing in the technology. Implementation of the workstations themselves would be highly dependent on cost and ease of use, with the technical requirements (in terms of software/applications and their supporting hardware) generally being less than those for high-tech workers.

4.2 Target Market Analysis

In order to address the market effectively, e-Commute Consultants must analyse the market needs, trends, growth and external factors which might affect the business.

4.2.1 Market Needs

The target group of clients for e-Commute Consultants services are companies that wish to integrate telework programs into their existing infrastructure in order to reduce absenteeism and office-space costs, increase employee job satisfaction and productivity, and improve employee retention.

They do not want to spend time conducting feasibility studies or developing telework programs in-house. They are interested in having customer-oriented consultants assess the feasibility of such programs, create and implement a plan, and provide on-going training and technical support to their employees.

Members of the target group may have existing telework programs that they are interested in restructuring or ones that they want to enhance using additional distance communication technologies (i.e., video conferencing) or by adding hotelling facilities for teleworkers who wish to come into the office to avoid feeling isolated.

Often the employees of the target group will have jobs that have a high level of autonomy or ones in which they are not highly dependent on others in order to complete their daily tasks. Training, on-going technical support, ease of integration and functionality are all important factors to the target group. The group is most likely to be sold by word of mouth and/or testimonials.

Members of the group read a major metro newspaper, while members of the private business segment read high-tech and/or business publications. All members have an interest in employee wellness.

4.2.2 Market Trends

Over one million people in Canada are currently estimated to be teleworking from their homes, which represents approximately 7.1% of the Canadian workforce. The number of teleworker is expected to grow in number to 1.5 million by the end of 2001.

4.2.3 Market Growth

The majority of the target market is growing at a rate of 10%. This ensures that the demand for the company's services will continue to grow.

4.2.4 External Factors

The following external factors may have an effect on e-commute services and market penetration:

Economic Factors

· Growth or decline in the high-tech sector: market fluctuations may cause clients to be hesitant about implementing telework programs or affect the demand for service

· State of the Canadian economy: general predictor of employment rates and company spending. A low dollar value may prompt companies to take competitive measures in order to prevent losing employees to American companies

· Rising energy prices: could increase demand for telework from employees wishing to commute less

· Rising real-estate costs and shortages may lead companies to look for alternatives

Legal Factors

· On-line security issues: proprietary information is less secure when made accessible from places other than the office

Environmental Factors which cannot be controlled

· Power outages

· Network disruptions

Technological Factors

· Improvements in network technology: will lead to increased connectivity and bandwidth

· Computer hardware advances: speed and performance gains

· Decreasing technology costs

· Improvements in broadband communications software packages

Social and Cultural Factors

· Telecommuting is becoming more widespread and accepted throughout Canada. In Europe, some countries have as much as 15% of their total workforce teleworking and North America is expected to follow suit

· Increasing environmental concern has lead to efforts to reduce car emissions which could increase the demand for teleworking by providing a viable alternative to commuting for employees

4.3 Competitive Analysis

e-Commute Consultants starts with a critical competitive edge: there is no competitor they know of offering as wide a range of services and solutions related to the problems and opportunities in the area of distance working.

4.3.1 Product Features and Benefits

e-Commute Consultants' main distinctive features will be its superior customer service, which will include technical support and on-site assistance. Flexible service plans, ease of integration of systems and compatibility with competitors products are also benefits to the customer. The workstations themselves will utilize leading edge technologies, including videoconferencing capabilities, high speed connection to the intranet and a variety of customizable features available .

4.3.2 Strengths

· Commitment to customer service: the portfolio of planned services to e-Commute Consultants' clients will give it a strong competitive edge.

· Range of technology: e-Commute Consultants expects to offer a wide range of technology options to meet the changing demands of its target consumers. Current competitors in Canada only deal with the planning side of teleworking (counseling, coaching, evaluations, and consulting), not with implementation issues.

· Experience in target industry: all of the key employees of e-Commute Consultants have worked in the high-tech sector and have kept in touch with a network of industry professionals.

4.3.3 Weaknesses

· No Market Presence: e-Commute Consultants currently has no other services on the market and therefore lacks name recognition. It has not developed any relationships with technology suppliers. This contrasts with several foreign competitors, who have formed partnerships with large technological corporations.

· Lack of personnel and resources: the existing staff at e-Commute Consultants have little experience in the service industry or in the business world. They are also lack the capital to successfully launch the company and the personnel to implement its services.

4.3.4 Opportunities

Rising telecommuting trend in Canada: teleworking is on the rise in Canada with an increasing number of companies wanting to implement work at home programs to decrease real-estate costs and employee stress, improve worker productivity and morale, reduce absenteeism, and increase job flexibility.

4.3.5 Threats

Competitors: e-Commute Consultants main competitor, InnoVisions Canada, is located in the same geographic region and has the reputation of being the premiere telework consulting organization in Canada.

4.4 Marketing Strategy

e-Commute Consultants will market its services based on strategic positioning in the market, promotion of services and pricing of services.

4.4.1 Positioning Statement

e-Commute Consultants is entering the Canadian market as the first to provide technical telecommuting services to Canadians. e-Commute Consultants will strive to maintain the uniqueness of their services and leadership among the Canadian telecomuting service providers.

4.4.2 Promotion Strategy

Since e-Commute Consultants budget it currently very limited, it must rely on personal contacts in order to get customers. When its available capital increases, e-Commute Consultants will advertise in local business publications, as well as attending trade shows and giving corporate presentations/demos. e-Commute Consultants customer-oriented nature and flexible service packages will be emphasized.

Press releases will first highlight the company's key benefits, but will also act to increase awareness of telework advantages and options to the core target market.

4.4.3 Pricing Strategy

As e-Commute Consultants is a new company, its initial consulting price will be set based on market consulting rates. Prices will be reset based on costs shortly after entry into the market. Sales/credit terms will include home-office systems and renewable technical support contracts.

5.0 Exit Strategy

e-Commute Consultants will have two exit strategies: