The software and hardware will be the heart of our site. It will need to be user friendly, easy to maintain, and powerful enough to handle the behind-the-scenes work that will be needed. Many of the smaller association’s members may not have any or very little computer experience. Making the site visit as easy as possible for these members will be our most important task. If no one shows up for the online education that we will be offering, then the Associations affiliated with our site will not be happy and will cancel. We will need to buy, install, and maintain easy to use collaboration and education software. This will include pieces such as Microsoft’s NetMeeting software and Blackboard.com’s educational portal software, as well as e-mail, and instant messaging packages.
Behind the scenes we will need redundancy for our serves in the form of High Availability (HA) systems from Sun or other vendors. Uptime is the most important part of offering an online service. If you have bad uptime then people will refuse to revisit your site and you will fail.
Almost as important as uptime are backups. If one side of your HA system is going to crash, you need to be able to load a correct, up-to-date backup of the environment as soon as possible then synchronize your system such that users are never affected and notice as little interruption in service as possible.
Finally, we will need to have redundant network architecture based on IPv6 with systems in place to alert of us of any potential traffic problems. Additionally, both redundant network connections as well as backup switches, routers and hubs need to be in place to handle any potential network hardware issues. Concurrently we need to be assessing the health of the network at all times to forestall any problems with bandwidth either inside our own system or with our connection to Internet 2. Since we will be in the business of streaming real-time video and audio we can not afford for there to be either latency in the streaming packets or loss of packets due to faulty hardware.
2.3.4.4 Distance Education Summary
After the initial investment in hardware and software, the cost of the classes will be covered by the Association’s dues charged when they join the site. Tuition from students will also go towards class content creation. Once the classes have been created the first time, they will be edited, cleaned up and offered on the website for others to take at later dates. This will incur minimal expense (hard drive, backup tapes, etc) on our part and let us generated revenue in future periods. Association members will be charged tuition for classes they take online with either the student’s themselves paying or the Associations covering the cost for required classes.
3. Market Research and Analysis
3.1 Customers
Our customers are all the professional trade associations in the US. It is our believe that every association can benefit in some shape or form from having a Web presence. Our initial focus will be on those associations, regardless of whether they are currently on-line, that can benefit the most from our broadband offerings: eManufacturing, CRM, and Distance Education. Along these lines, we are targeting associations whose professional subject matter has one or more of the following characteristics: manufacturing based, customer based, dynamic and changing knowledge base. The associations that display these characteristics will have the most to gain from our offering: expediting the manufacturing process, maintaining a organized and dynamic customer approach, and keeping abreast of all the latest industry regulations through distance learning.
Adhering to the strategy of identifying associations that stand to gain the most from our broadband offerings, we have targeted the following association categories and sub-categories.
3.1.1 Computers & Internet
The machines, their connections, and their capabilities.
· Computer Hardware, Computer Science, Computer Software, Cyberculture, Internet, Platforms, Programming, System Administration, Computers & Internet News.
3.1.2 Education
Schooling and instruction; the provision of knowledge or training in a particular area or for a particular purpose.
· Early Childhood and Pre-school, K-12, Alternative, Special, Higher Education, Adult, Vocational, Teachers & Administrators, Education News.
3.1.3 Health & Medical Sciences
Dealing with the condition of an organism — its freedom from disease or the diagnosing and treating of disease or other damage to body or mind.
· Alcohol, Drugs & Tobacco, Alternative Medicine, Consumer Information | Disabilities | Diseases, Disorders & Syndromes | Donors and Transplants, Exercise & Fitness, First Aid, General Medicine, Geriatrics, Health Care Management & Policy, History of Medicine, Injuries, Medical Technology, Men’s Health, Mental Health, Medications & Pharmaceuticals, Nursing, Nutrition & Diet, Occupational Health & Safety, Oral Health & Dentistry, Pain Treatment & Management, Pediatrics, Preventive Medicine, Sexuality Specialization, Surgery, Veterinary Medicine, Women’s Health, Professional Resources, Health & Medical Sciences News.
3.1.4 Law, Government & Political Science
Rules and principles governing a community and enforced by a political authority; matters having to do with the control and administration of public policy in a political unit; the study of the processes, principles, and structure of government and of political institutions.
· Law, Law Enforcement, Government, Political Science.
3.1.5 Science & Technology
The natural and physical sciences and their practical applications.
· Agriculture, Astronomy, Chemical Sciences (Chemistry), Communications, Controversial, Earth Sciences, Electronics, Energy, Engineering, Environmental Sciences & Ecology, Horology (Time Measurement, Clocks, Calendars), Life Sciences, Mathematics, Paleontology, Physics, Transportation, Science & Technology News.
3.2 Market Size and Trends
There are approximately 200 US-based associations, both on and off line, that exist in our target areas outlined above.
As with everything in this ever increasing wired world, deliver your message 24 hours a day 7 days a week to anyone, anywhere is becoming key to success. An online portal allows such access and supports the following market trends:
3.2.1 Increase Revenues
Associations don’t want just a simple web site. Rather it is important to have a web site that create a multi-media presence that builds on itself – each component benefiting the other. Use web sites to build revenues for association meetings – using the meeting to create the essential web site. Association portals offer the following revenue enhancements:
· Member profiles – with pictures, reply forms, email and web links – searchable by name, location, product or key word. Offer expanded access to on-line registrations.
· Product listings – allow members to include images and free form text descriptions of their services or products.
· Banner Advertising – an additional way that members can attract attention to both their on-line displays.
· Sponsorships – of specific areas of the Internet community allowing members to tighten user identification between them and a product or service.
· Lead generation – with statistics on impressions and ‘click throughs’ – offer your members access to the database of Internet Community registrants.
3.2.2 Be your industry’s portal
Capitalize on your assets: name recognition, membership and your established lines of communication to create the essential presence on the web. These assets are the means and tools that insure that your web site will become the portal. One that all others will want to participate in – and benefit from.
3.2.3 Provide e-commerce sites
Offer your members complete e-commerce enabled storefronts.
For the member your Internet community can take the prospect from your site directly to their on-line storefront to close the deal. This can be another value-added member benefit – and an additional revenue source for your organization.
3.2.4 Create an Internet Community
Complete an on-line Internet Community presence with:
· Virtual Exhibit Hall
· New Products
· Classified Ads
· Community Discussion Forum
· Live Chat
· Current Features
· Industry Profiles
· Industry Events
· Featured Articles
· What’s New
· Member information and registration
· Program descriptions,
· Exhibit Hall registration
3.3 Competition
There are approximately 240 ISPs operating in the U.S. Of these, approximately 10% offer broadband capabilities and less than 5% offer the type of community and business building applications we provide. There are currently no broadband ISP dedicated to the creation of profession trade associations.
Clearly we have the opportunity to be the market leader by gaining, among other things, first mover advantage.
4. Marketing Plan
4.1 Overall Marketing Strategy
In order for TapNet to be successful it must generate a series of repeat users and establish its community. This is tremendously import for the success of TapNet. The TapNet site is targeting a very select group of users, the trade association community. The following features are designed to be offered as free or fee services to this community in return for generating interest, repeat use and loyalty to the site as active participants of this community.
4.2 Pricing
Pricing will be established based on leading Internet Pricing Models. TapNet will offer banner adds to all its trade association’s members. This will be based on a flat fee and a yearly contract.
4.3 Sales Tactics and Promotion
Sales tactics include only using on-line capability. No direct sales force will be deployed to assist in marketing activities. Major promotions include the following:
· Trade Show Site – On the TapNet.com front page, there is a series of links to microsites that provide information and services for the tradeshow visitor and exhibitors in the form of a virtual trade show. This virtual trade shows are a link to trade association websites that offer product and services to other trade associations. These microsites will be a great draw for TapNet site.
· Daily Trade Association Headlines – This feature is a daily e-mail posted and pushed automatically to all subscribers. The daily headlines are short: two to three sentence blurbs about events and issues affecting the trade association industry as they happen. The email newsletter is free and easily downloadable.
· Discussion Forums – This feature I a bulletin board style posted discussion.
· Stock Listing – This feature provides stocks traded in US. The delay is 15 minutes and is used as a draw.
· Calendar of Events – This feature provides a listing of the events of relevance to the trade association. Events are organized by the month in which they occur.
4.4 Advertising
Our goal is to advertise on the leading Internet portal and search engines. We will also participate in print ads of leading trade association magazines.
5. Design and Development Plans
The design of the system will have to include several factors. From the client’s point of view they will want security, responsiveness, cost and availability. Our needs will include maintainability, disaster recovery, and cost.
5.1 Development Status and Tasks
Current development status is in the planning stage. From this point on we need to address the following issues: network connectivity, server purchase, build and install, software install, security, and user testing.
Network connectivity depends on whether we decide to host our servers in our own facility or contract out with a hosting company to handle it. If we do it in-house we will need to budget for power, air conditioning, security, and connectivity. Hosting with another company will reduce our setup times but will lower our “sense of ownership”.
Purchasing the servers is actually the end-state of a process that will include requirement writing, application availability per platform, initial cost, setup cost, and maintenance costs, and performance over several different usability models. We need to have a good sense of how hard and in what way the servers will be used before we can make a final purchase decision.
There are only a limited number of software packages that will do what we need, so it should be fairly quick and easy to get representatives in to give us demonstrations of their products and make a final selection.
Security will be a major selling point for our customers. They will want to be able to see their data without too many hassles while at the same time not allow others access to it. We will need to plan for security that keeps unwanted internet hackers off our system as well as keep clients who are allowed on the system to see only the data that they are supposed to have access to.
5.2 Difficulties and Risks
The most difficult part of setting up the whole environment will be making sure that all the parts work together. Integrating all the various software components will require extensive testing in both functionality and performance. The system will have to be flexible enough to handle all the software we plan on plugging into it as well as be robust enough to handle the load of a large number of concurrent users hitting the system and straining available resources.
The biggest risk we face is having the hardware and software in place but disappointing our users through non-availability, slow response, or offering functionality that they either do not want or do not need. It should be possible to sing up clients because of the promise of user friendliness and innovative product offerings. Keeping them as clients will require that we keep them happy providing a level of service that we have promised.
5.3 Proprietary Issues
Propriety issues include the content that we will be providing to our clients, data about our clients that we store on our servers, and our business “best practices” that will allow us to server our clients.
Client issues can be handled through appropriate segregation of customer data. We will do this by setting up separate databases, Virtual Private Networks, and logins for each client. This should ease any fears of data contamination as well as allow us to better manage our proprietary data by marking it specific to each customer.
6. The Financial Plan
6.1 Actual Income Statements and Balance Sheets
6.1.1 Expenses
2001 2002 2003 2004
Staffing 494,992 791,339 2,302,619 6,227,837
Technology 729,523 904,251 1,198,932 1,620,195
Projects 1,920,000 71,533 60,000 136,023
Other 70,000 70,000 70,000 70,000
TOTAL $3,214,514 $1,837,124 $3,631,552 $8,054,056
6.1.2 Revenue
2001 2002 2003 2004
Revenue $689,456.06 $2,625,286.25 $11,202,679.85 $25,011,536.56
Expenses $3,349,089.19 $2,044,441.62 $4,241,547.64 $9,634,079.27
Net Profits/(loss) ($2,659,633.13) $580,844.63 $6,961,132.21 $15,377,457.28
Profit Margin -385.8% 22.1% 62.1% 61.5%
Earnings per Common Share -0.30 0.06 0.78 1.72
6.1.3 Staffing
2001 2002 2003 2004 Total
Exec. & Staff Salary 448,583 691,060 1,933,320 5,166,745 8,239,709
Office Space and Furniture 36,033 78,569 291,888 845,295 1,251,785
Travel and Expense 10,375 21,711 77,412 215,797 325,294
Number of staff 5 27 139 416 587
Cost of staff per quarter 40,604 42,253 43,968 45,754 43,145
Number of staff 5 27 139 416 587
Square feet per staff 900 900 900 900 900
Cost per square foot 123 128 133 139 131
Hours per quarter 2,000 2,000 2,000 2,000 2,000
Cost per hour 203 211 220 229 216
6.1.4 Technology
2001 2002 2003 2004
PCs $28,013 $58,620 $209,011 $582,652
Web Hosting includes Bandwidth $480,000 $600,000 $720,000 $720,000
Application Package Software $120,000 $140,000 $160,000 $160,000
Application Maintenance $101,510 $105,632 $109,921 $114,384
Telecommunication $2,075 $4,342 $15,482 $43,159
Number of staff 5 27 139 416
Cost of PCs per staff per quarter $5,400 $5,400 $5,400 $5,400
Hours per quarter $2,000 2,000 2,000 2,000
Cost per hour $203 $211 $220 $229
7. Proposed Company Offering
7.1 Proposed Company Offering
The objective of this section is to indicate the amount of money that is being sought for TapNet.
7.2 Desired Financing
Based on real-time cash flow projects we need $19,350,000.00 over the next three years.
The breakdown is: Shares IPO price
Secured from Offering 3,850,000 $5.00 19,250,000
Loans from Directors 100,000
Total Cash Flow from Offering 19,350,000
Offering Shares
Type of Stock Common
Percent of Company that investors will hold after Offering 50,000 5%
Securities sold through private placement Preferred
7.3 Capitalization
Current Outstanding Shares 0
Proposed Outstanding Shares 3,850,000
Available to Public 4,000,000 40%
Retained by Directors/Executives/Board 5,100,000 51%
Remained authorized but unissued 200,000 2%
Reserved for Stock Options for future employees 200,000 2%
Total Shares Authorized 10,000,000 100%
Use of Funds
The capital raised during this offering will be used in the following ways:
On-going Operations 12,288,701
Implement Technology Platform 2,187,556
Marketing Costs 260,000
Networks & Assets 4,474,800
Legal 20,000
Total Use of Funds 19,231,057
7.4 Investors Return
Rate of Return over 4 years 226%
7.5 Exit Strategy
Directors propose an outright sale of TapNet with in 48 months of launching offering. (1/2005)