ASP Software Developer Business Plan Leave a comment

Despite the continuing slide in this industry, the US housing sector saw its record-breaking $550.14Billion gain last year. The sector will continue to grow steadily over the next two years. Among the top revenue generating sectors in the segment is new single family housing construction, which comprised 67% of total residential construction in the US.

Over the years, the business model in the industry had shifted toward greater more cost efficiency. Low entry barriers (other than the need to obtain state-based licenses and registration) in the industry had spawned more service providers in the industry. It is difficult for new competitors to quickly establish themselves in the market because of this high level of competition.

Existing businesses have many advantages over new entrants. They:

• Have access to a pool of skilled subcontractors.
• Make ongoing arrangements with material suppliers.
• Maintain good relationships with property developers and financial institutions.
• Can display completed examples of their work in a local market and leverage off “word-of-mouth” referrals.

KnaelHaed ASPware (KnaelHaed) is a provider of Web-based vertical market software applications. KnaelHaed ASPware offers the digitalSuspenders as an online solution to support the building construction process.

The Problem

In terms of R&D investment, the construction sector is behind other industries. R&D investment for mature US businesses is typically 3.5% of sales. This number may be as high as 7% to 14% for some industries, such aerospace. Construction only reinvests 0.5%. While the reasons for this low reinvestment can vary, they are often due to cost and complexity. The majority of construction firms have less than 10 workers and are limited in their profit margins. So, technology spending is often seen as an unaffordable luxury.

The Solution

DigitalSuspenders is a family of Web-based software programs that will support all phases of the building lifecycle, from conception to construction to management. The suite provides online collaboration, digital takingoff, estimating, project management, and other capabilities to small contractors. All of this is presented in an easy-to-understand and use format.

The market size

According to the most current Economic Census, the home construction industry has 163,703 establishments. It employs 796.880 workers. According to the latest Economic Census, there has been a significant increase in this industry to 175,000 establishments. The commercial and institutional buildings industry in the US is 34,588. Construction accounts for around 8% US GDP.

Start-up Costs

KnaelHaed ASPware anticipates initially requiring $120,000 to complete the beta prototype of the DigitalSuspenders, provide for legal and infrastructure expenses related to start up and to cultivate potential customers. We will seek out initial capital from angel investors as well corporate partners to finance the start up.

KnaelHaed ASPware anticipates break-even within two years. We expect to generate royalty revenue through licensing our position sensing software and product sales. KnaelHaed ASPware plans to launch or sell the company within three to 5 years to stimulate further growth, and to provide liquidity for investors.

Management Team

Paul Peen, currently President & Chief executive officer, has over 20 year experience in commercial software development. This includes stints at Microsoft, Expedia.com, and Microsoft.

KnaelHaed ASPware combines speed, connectivity and interactivity to provide a unique opportunity for subcontractors and builders to save money and be more efficient. KnaelHaed offers outsourcing solutions at competitive prices. KnaelHaed ASPware will continue to develop new ideas and models that help clients accomplish their objectives. Together, the owners’ passion and accumulated field work has made KnaelHaed ASPware more than “just-another-outsourcing-hub”, but a catalyst for the next e-commerce re-invention.

1.1 Objectives

The mission of KnaelHaed ASPware is to provide a medium for custom builders, general contractors, design builders, engineer-contractors, joint-venture contractors, and turnkey contractors to outsource their works with greater cost saving efficiency.

This model is designed to be disruptive against construction software companies that charge thousands of dollars per copy. KnaelHaed ASPware’s model is to offer a subset of these capabilities for free. KnaelHaed ASPware is an open-source business model. Its goal is to provide better solutions that benefit all stakeholders.

1.2 Mission

Our target market is builders and subcontractors who want to profit from outsourcing. Software companies provide software products that are very expensive for small and mid-sized users. Considering that the typical home builders construct only about a dozen homes per year, there are only a few companies that may then be considered large enough, with sufficient financial resources to pay for premium licensing of a software package.

Our estimates are that 60% of the US market would be covered by small and medium builders. This would translate to approximately 118,980 businesses. Our attention will be on establishments that place emphasis on cost efficiency, and produce precise results.

1.3 Keys to Success

We are targeting the construction market because of several reasons. This $787 billion industry offers tremendous growth potential. The annual unit growth of the number of establishments in the housing sector averaged 6.45% and commercial/institutional sector 0.46% last year.

Despite the lackluster growth in the construction sector, it is still a highly fragmented industry. Within the US alone there are over 200,000 establishments (both housing and commercial/institutional) on record.

These are the keys to our success:

• • Establishing and maintaining strategic alliances between our software vendors, and other industry-related business partners
  • Adopting a customer- and market-focused sales and marketing paradigm
  • Implementing, measuring, and continually adjusting the fundamentals for a Balanced scorecard is a way to manage the business.

• • Employee Learning and Growth Goals Vs. Results
  • Financial Goals Vs. Results
  • Goals for internal business processes Vs. Results
  • Customer Satisfaction Goals Vs. Results