Technical Data Corporation Business Plan Essay

1104 Words Sep 24th, 2010 5 Pages
Technical Data Corporation Business Plan

1. Technical Data Corporation is in the computer hardware and software business. TDC is in the business of providing liable data in regards to the fixed income market. TDC is going to provide a web based service that will relay historical price data, price analysis, and market commentary on the day to day price variances. Currently the purchases of this information are not willing to pay high amounts to access this information. Additionally, the purchases are not willing to buy any equipment to get this information. The purchases expect to get this information from their current equipment. Many of the competitors in this industry provide some of the same information, but all of them are not
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Additional expense assumptions include allowance for travel and entertainment in relation to marketing the product to potential clients and premium payments on a life insurance policy on the President of the company. The main assumptions TDC makes are based on revenue expectations. These assumptions are very important because they drive the other assumptions. First, the company makes assumptions concerning customer numbers and how they will grow over time. These numbers start with an initial base of 100 customers in April, 1981 and increase to 530 as of year end 1983. Additionally, TDC assumes initial monthly rental fees of $150 which will increase to $200 as the customer base increases which in turn increases expenses. Finally the company assumes excess cash will receive 9% interest a year.

The assumptions that TDC has made in regards to their Pro-Forma Financials seem reasonable. It appears that the company has done extensive research in regards to the expenses it will incur as their customer base increases. Additionally, it is not unreasonable to assume 9% yearly return on excess cash. The most difficult assumptions, however, are in regards to projected revenues. It is difficult to forecast revenues on a new product and will be difficult to determine how many customers this product will attract. However, the company seems to have developed an attractive product offering that will be useful to investors. Also, TDC has
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