Business Plan 

Contents



Business History

In June 1999 Dr. Peter Ross approached Michael Elkaim, President of the AI Society, with the idea that the society should set up a company that utilised the students and the facilities of the department and the University to write commercial software. Rikard Kjellqvist was then contacted with the intention of writing a feasibility plan and to help set up the business together with Michael and Julian George.
 
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The Founders

Michael Elkaim, currently 4th year Artificial Intelligence and Computer Science student at Edinburgh University. Winner of the Edinburgh University System Design Project Award, as team leader. President of the Edinburgh University Artificial Intelligence Society. 

Rikard Kjellqvist, currently 3rd year Computer Science and Management Science student at Edinburgh University. Previously Finance Director for Fresh Air FM where together with the Station Manager, Jay Feeney, he restructured the whole station and transformed it into a financially viable and independent organisation. 

Julian George, currently 4th year Artificial Intelligence and Computer Science student at Edinburgh University. Treasurer of the Edinburgh University Artificial Intelligence Society. 

Dr. Peter Ross, currently Director of the AI Applications Institute, at the University of Edinburgh. PhD from Imperial College London, 1976, in pure maths. Joined Edinburgh (the Department of AI) in 1978. 
 
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The Product

We intend to offer our customers a real alternative to expensive IT outsourcing companies. We are able to contact at least 600 Artificial Intelligence and Computer Science students many of whom will have a great interest in getting involved with our project. 

What are we offering our clients? 

  • A cheaper solution to their programming needs.
  • A chance for them to form a relationship with students and find potential employees.
  • The creativity and ingenuity along with the keen attentive minds not yet blunted by the working world.

What can we offer the students? 

  • A fantastic chance to get involved with companies they may seek to work for in the future, either full-time or as interns.
  • An opportunity to use their computing skills in a practical environment.
  • Financial compensation. With the abolition of grants and the sale of the Student Loans Company there has come a great increases in the number of students in part-time work. In taking part in our project they will earn more than doing menial work and at hours which suit their education better.
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The Market

In the early 90’s there was a trend for companies to create large IT departments in the hope that they would stay ahead of their competition. These IT departments became very expensive and, as they did not directly generate any profit for the companies, outsourcing their IT needs has become a more attractive option. 

Recently when British Airways started their budget flight company "Go!" they decided to outsource all of their ticketing operations to Digital, who received a percentage commission on every ticket transaction. 

Our project does not intend to take on such feats but where we do fit in is the smaller scale, which is where we can offer an effective alternative to established and expensive IT companies. 

We intend to target industrial firms, telecom companies, banks, law firms, accountancy firms and all other forms of professional institutions and all manner of small companies. We will even target large IT companies themselves who might well be willing to assign small projects to us. 

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The Competition

We believe that our competition falls into two main categories. The large IT specialist companies that will compete for the whole scalar range of projects, but are expensive to use. However, they offer a great field of expertise, will make a very reliable product and have a very experienced after-sales team to deal with any problems that arise. 
 
Secondly, the smaller more specialised IT companies, for example web page designers. The size and experience of these companies varies greatly as does their pricing. 
 
We are hoping to draw customers from both of these categories. From the large IT companies we hope to compete against their smaller projects by offering a cheaper solution. We are a part of the Artificial Intelligence Society and are strongly affiliated with the University of Edinburgh therefore they should have no doubts over the competence and skill that we have involved. Many of the larger companies are always looking to recruit talented students so our company is an ideal contact point for them. 
 
From the more specialised groups we intend to compete by pricing and new talent. With the University’s excellent resources at our disposal and the budding talent we hope to draw from the Edinburgh Art College, we should be able to compete at every level of web design and other projects. 
 
We hope that most of our competitors will welcome our entry into the market and perhaps work on projects with us. 
 
Should this project prove successful and other Universities decide that they would also like to enter this market then we will try to collaborate with them and merge them into our project.

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Marketing

Channels of distribution

There will be two stages of our marketing plan:
First we intend to approach companies that have previously employed students through the University, for full time or part time work, and any other companies involved with the department. Parallel to this we will be trying to get projects from other departments within the University itself and University clubs and societies.

Once we have established contacts through these links we might then move onto the second stage.

The second stage involves pamphletting local businesses and larger companies nationally not yet contacted. 

Pricing Strategy

When we are approached by a company we will use a pricing strategy based on how many people we use and how many hours we believe the project will take and an hourly rate per project member and a percentage going back into the company.

Promotional Concepts

We intend to produce a brochure which will give a description of the company, what services we can supply, a brief pricing policy and contact information.

We will also have a web page, which will contain the information from the brochure, list of projects under development and a portfolio of completed projects.

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Operations

We will operate within the University, using their resources. Our project groups will consist of students who have signed up to be involved and a project leader, who will have the responsibility to report to the company he is involved with and the directors. For projects involving graphical work we will bring in students from the Edinburgh Art College, whom have gained relevant experience.

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Management

We intend to keep a trim team of directors to run the project who will be appointed by the existing directors.

The positions we have already established are as follows:

Chairman of the Board of Directors : Michael Elkaim
Michael is the president of the AI Society and it is his responsibility to oversee the development of the project
Managing Director : Rikard Kjellqvist
Rikard’s first duty is to carry out the feasibility study into the project. Once it is established he will manage the organisation and make the initial contacts with potential clients. He will also be accountable for the turnover of the organisation.
Finance Director and Company Secretary : Julian George
Julian is currently Treasurer for the AI Society and it will be his responsibility to oversee the accounts and the financial decisions by the directors.

Positions to be filled:

Marketing Director 

We will need a committed and experienced student with a good general knowledge of computing. It will be their responsibility to come up with a brochure and to liase with the companies that we have already contacted. He/she will be working closely with our web site developer.

Web Site Developer 

A committed and experienced student with artistic talent. He/she will be responsible for our web page and its upkeep. He/she should also be available for consultation from any programmers working for us.

Other people who will be involved: 

  • Dr. Peter Ross Senior Lecturer in the school of Artificial Intelligence. He is our contact with the department and will be giving us consultation and some financial support. 
  • An Accountant We will need an accountant to help us with tax legislation, contracts and other legal issues. We intend to approach David Adams, who is an accountant for the Edinburgh University Settlement, when he returns from vacation. Another alternative would be to approach one of the accountants attached to the AI department. 
  • Graphic Design Consultant We need a company name and logo to go on all of our stationary etc. We intend to approach Jason Koxvold, who does freelance work for Cnet.
Profit generated that is not reinvested in the company will be distributed through dividends, financial compensation to the management and charitable donations.

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Costs

Start-up Costs

Registering with Company House, through an accountant £300. This may be cheaper if we use an accountant working for the University. 

VAT registration £200. It is not yet clear whether we will require VAT registration.

Company address: a room within the department. Alternatively a PO BOX at £100 pa..

Yearly auditing of accounts £200 pa. Approximate cost which may be reduced if we use a University accountant. 

Ongoing Costs

Initially the majority of ongoing costs will be minimal, as the AI department will supply computing facilities.

It could be possible for us to share a room within the School of AI with the AI Society, since private office space would cost at least £4800 pa. with telephone and faxing facilities connection of £120 and line rental of £140 pa.

There will be some stationary costs but most of which will be supplied by the department. It is our intention to buy professional stationary when we have raised the appropriate funds.

Marketing Costs

Initially marketing costs will be minimal, as we will be approaching an existing target client list. As and when our business expands we may allocate some more substantial costs towards marketing.

For legal reasons we will need a registered office, office address (non-residential) and a Company Secretary.

The three founding directors will be the shareholders in the company. Initial capital required, see start-up costs, will be financed through a loan/donation from the University.

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