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Internet Office

Description

Production plan

Marketing

Presentation

Prospect

Investment

 

To implement the project, we are going to set up a new company by the authors of the project and the investor in the country chosen by the investor. This project requires $612,000 which should be gradually invested. About $323,000 should be invested during 12 months and then $289,000 during the next 4 months.

The project will begin to bring the net profit from the 17th month and then in 6 months it will bring $2,000,000 a year on the assumption of minimum revenues and maximum expenses (for example, taxes at the rate of 30 % from receipts). The amount of profit will dynamically grow and exceed significantly the figures mentioned here.

It should be noted that this result will be achieved using the minimum possible marketing expenses (about $200,000). If additional investments in the promotion of the project will speed up the process of profit earning and increase its amount. According to preliminary estimates, the additional investment of $1,400,000 ($2,000,000 in total) will make it possible to increase the number of user up to 500,000 and the profit up to $6,000,000 a year ($500,000 a month).

In case of project failure, it is possible to license patented technologies and know-how up to sell exclusive rights to their use, which will compensate at the best the investment in the project.

The joint implementation of Internet Office project and project "Rental Center" will increase profit each of projects.

Joint implementation Internet Office and Rental Center

This will allow us to increase the amount of profit got from each project. This description is based on the assumption that $2,000,000 will be invested in each project ($4,000,000 in total), because the success of the joint  implementation of the projects will depend on the following two factors:

- the attraction of a greater number of users (500,000), which is achieved due to a greater amount of investment ($2,000,000);

- the implementation of the project in Western Europe or North America, which require $2,000,000. 

As a result, the Internet Office project will bring $500,000 of profit a month. $250,000 of this sum will be received from ad-sponsored versions of Internet Office and Internet services, i.e. from ads. Moreover, the promotion of these versions is carried out in cooperation with third-party banner advertising agencies.

In case of the joint implementation of these two projects, all ad-sponsored versions of Internet Office will be promoted through the rental center. The logic of work of the rental center involves paying 50 % of all money to developers of rented software products or services. Thus, the total amount of money received from the rental of ad-sponsored products (implemented within the framework of the Internet Office project) by 500,000 users will be $500,000 ($250,000*2) a month. The rental center charges a 30% commission on all money received from the rental of software product, which makes $150,000 from $500,000 a month.

A part of users of the rental center (their total number will amount to 500,000 by this time) may want to rent one of products implemented within the framework of the Internet Office project and this project will bring at least $100,000 a month.

Let's consider the profit and benefits of the joint promotion of Internet-oriented projects.

Benefits to the Internet Office project

The joint implementation of Internet-oriented projects will increase the profit of the Internet Office project at least by $100,000 a month: from $500,000 (in case of independent implementation) to $600,000 in case of the promotion through the rental center (the most pessimistic forecast).

Benefits to the Rental center project

Besides of the profit of $650,000 a month that the rental center will bring by the 12th month after the start of financing, in addition it will bring a $150,000 commission (per month) on promotion of all products implemented within the framework of the Internet Office project. The total profit of the rental center will be $800,000 a month. Besides, the rental center has additional benefits. It will attract 500,000 users of products implemented with the Internet Office project. This will interest big advertisers, because the total number of users of the rental center will increase two times (from 500,000 to 1,000,000) in case of the joint implementation of the projects. As a result we will be able to have high ad rates and, accordingly, this will increase the profitability of the rental center.

Conclusion

The profitability of the joint implementation of the Internet-oriented projects will increase. The table below shows the profit of the projects in case of different investment strategies:

 

Projects

 Investments

Profit (per month)

Internet Office

$612,000

$170,000

Internet Office

$2,000,000

$500,000

Rental center

$2,000,000

$650,000

Joint implementation of two Internet-oriented projects

$4,000,000

$1,400,000

 

It should be noted that in our calculations of the profit from the joint implementation of the Internet-oriented projects, we only took account of sums that can be obviously calculated. We do not consider an additional profit that the projects may bring if the number of users of the rental center amount to 1,000,000.

 


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