Business Plan

FOCUS
Our focus is our customers’ focus

Executive Summary ...........................................................................................................3
The opportunity...............................................................................................................3
The difference ................................................................................................................3
Partnership......................................................................................................................3
Revenue sources .............................................................................................................3
The Team........................................................................................................................3
The Offering ...................................................................................................................4
1 Business Description.........................................................................................................5
1.1 The Entrepreneur environment .................................................................................5
1.2 Industry overview......................................................................................................6
1.3 Company Description................................................................................................7
1.4 Mission Statement .....................................................................................................7
1.5 Goals and Objectives.................................................................................................8
1.6 Critical Success Factors.............................................................................................8
2 Products and Services.......................................................................................................8
2.1 Products and Services Description.............................................................................8
2.1.1 Products and Services Description......................................................................8
2.1.2 Unique Features..................................................................................................9
2.1.3 New and Follow on Products and Services.........................................................9
3 The Market .......................................................................................................................9
3.1.1 Market Analysis .................................................................................................9
3.1.2 Competitor Analysis ........................................................................................10
4 Marketing Strategies and Sales.......................................................................................11
4.1.1 Introduction.......................................................................................................11
4.1.2 Pricing Strategy ................................................................................................11
4.1.3 Sales Strategy ...................................................................................................12
4.1.4 Sales Forecast ...................................................................................................12
5 Financials .......................................................................................................................13
5.1.1 Income Statement .............................................................................................14
5.1.2 Balance Sheet ...................................................................................................15
5.1.3 Cash Flow statement ........................................................................................16
5.1.4 Fund..................................................................................................................17
5.1.5 Valuation...........................................................................................................18
6 Appendices and references.............................................................................................19
6.1.1 Salaries Calculations Sheet .............................................................................19
6.1.1 Working Capital ...............................................................................................20
6.2 References................................................................................................................21

Executive Summary
The opportunity
Ministry of Information Technology in Egypt is leading aggressive projects to increase
export revenues for Egyptian IT services companies to achieve $280 million. More over
A.T Kearney estimated IT market size in GCC countries worth of $2 billion and growing
fast. According to the same survey, IT system integrators in the GCC countries are
looking forward to partner with Arab IT services partners who can run a cost effective
resource development and project delivery teams to support this demand.

The difference
-

Different positioning and market penetration through partnering with system
integrators not competing with them.
Proximity to the target markets through sales team in the region.
Different project management and delivery model that is built on core teams
available on site and pool of professional offshore.
Cost effective skill development and training models.

Partnership
-

Partnership with Oracle, EMC and Microsoft for technology.
Partnership with Injazat (UAE), Eljeraisy (KSA), Omnix (Qatar) and more in
GCC area.

Revenue sources
-

Long term projects to focus on relation.
Fast revenue source through outsourcing.
Annual guaranteed revenue through support contracts.
License and license referral revenues.

The Team
-

All Focus management team members have 7+ years experience in GCC and 15+
years experience in ERP projects.
CEO worked for IBM and Oracle for the last 15 years establishing partner
network on channel management capacity.
Sales Director worked for Oracle and Raya in GCC, closing deals worth $10
millions.
Operations director, an MBA and PMP professional who headed implementation
teams for 20+ ERP implementation projects in SAP and Oracle eBusiness Suite in
different business lines including government, banking and telecom.

The Offering
-

Focus is raising $750,000 for its first round of financing and $500,000 in second
round. Focus projects a return of 60% IRR after 5 years of operations with 77%
share worth $13 millions.

-

1

Business Description
FOCUS Company will be founded to provide IT consulting services. With a Head
office in Cairo, Egypt and offices in Qatar, Kuwait and UAE, FOCUS will cover
GCC (Corporation Council for the Arab States of the Gulf) region.
FOCUS will be founded as a Limited Liability Company in Cairo.

1.1 The Entrepreneur environment
Through many initiatives undertaken by Ministry of Communication and Information
technology, Egypt has demonstrated an attractive strategies and action plans to promote
IT industry in general.
These strategies included:


To leverage public-private partnerships as an implementation mechanism
whenever possible.
To support the development of the skills required by the ICT industry.
To support research and innovation in the field of ICT.1

These initiatives led to the foundation of Technology Development Fund
http://www.techdevfund.com/ and Social Fund for Development
http://www.sfdegypt.org/ as government organizations dedicated to help start-up business
in general and Information Technology start-up in specific.

Moreover, Egyptian government already put in place required laws and procedures to
promote Venture Capital business in Egypt.2
The mentioned strategies and actions encouraged both Ideavelopers
http://www.ideavelopers.com/ and Actis Capital LLP http://www.act.is/ to setup venture
capital and private equity organizations in Egypt.

1.2 Industry overview
The Market for IT services in GCC in 2007 exceeds $2 billion and is growing fast;
government is the largest segment comprising 20% to 25% on average.3

2007 IT services spend (1)
-$M178

132
704

397

65
213

KSA

UAE

Egypt

31
112

16
56

15
54

15
53

Kuwait

Oman

Bahrain

Qatar

Highlights
-

-

IT services comprises 25% to 30% of the total IT market size in the GCC
states overall.
Government is a major spending on IT services through
o Centrally managed federal eGov initiatives
o Local ministry/agency level initiatives that are not always coordinated
centrally.
Kuwait (15%) and UAE (11%) are projected to be the fastest growing IT
services markets; others will experience 5-10% growth (2006-2010).4
Non Government Spend
Government Spend

1.3 Company Description
FOCUS will be registered in Cairo as well as in Dubai Internet City, UAE as a
Limited Liability Company.
Why Cairo and Why Dubai?
Smart Village Cairo, Smart Village Cairo launched in 2003 as the first fully
operational Technology and Business Park in Egypt, accommodates Multinational
and Local Telecommunications and Information Technology Companies, Financial
Institutions and Banks, together with Governmental Authorities on three Million
square meters in the west of Cairo. The efficient mix of business services boosts the
competitiveness and profitability of enterprises taking advantage of Fiber Optic
Network, multi-source power supply, District cooling and Heating redundant network
plant. Evenly, organizations in Smart Village Cairo, profits from world class
standards amenities including Property Management & Maintenance, Event’s
Management, Transportation Services on 24/ 7 basis. Complementary Community &
Business Services are available in Smart Village Conference Hall, Smart Village
Club, Smart Nursery, Smart School, Postal and Parcel services, Travel Agency,
Signboards Production, Copy Center, Graphic and Printing Agency, plants & flowers
and First Aid Assistance and the upcoming Smart Village Business Hotel. Currently,
12,000 professionals run the operations of more than 100 Companies and expected to
reach 80,000 by the end of 2014. 5
Dubai has emerged as a leading regional commercial hub with state-of-art
infrastructure and a world class business environment. It has now become the logical
place to do business in the Middle East, providing investors with a unique and
comprehensive value added platform.
With its strategic location, tax-free living and consistently strong economic outlook,
Dubai is the ideal base for multinationals targeting markets in Central Asia, the
Middle East, Africa, the Asian Subcontinent and the Eastern Mediterranean. These
regions have a population of over 2 billion people and a combined GDP of US$ 6.7
trillion. Accessible through its ultra modern airport, that offers connections to over
140 destinations, Its robust economic cluster of technology, media, finance and
healthcare hubs makes Dubai a viable and attractive proposition for any business. 6

1.4 Mission Statement
Is to be regionally recognized as a reliable IT consulting services partner and consistently
shares success with our customers, employees and partners.

1.5 Goals and Objectives
FOCUS will position itself lf as an implementation partner for government IT projects in
Egypt and Gulf region.
Capitalizing on Egyptian government initiatives, through ITIDA (Information
Technology Industry Development Agency), and pool of talents that are available in
Egypt FOCUS will be able to acquire startup resources.
Through partnership with multinational solution providers and local system integrators in
the GCC countries, FOCUS will be able to address a fast growing customer segment.
In first two years, FOCUS will start the operations in Cairo as a resource development
center and opening sales offices in Saudi and UAE to avail partner and customer
proximity, with a focus on delivering onsite Oracle eBusiness Suite implementation
services. In the third year, operations in GCC will be extended to cover additional
services including IT enabling services, as well as bespoke application development.

1.6 Critical Success Factors
FOCUS critical success factors are:7
- Customer focused strategy that allows consistent growth from products and
services and introducing new services within two to three years.
- Flawless operations execution that enables cost effective operations model
with a cost reduction target of 5-7% every year.
- Building an achievement oriented culture through different systems.
- Constantly building and acquiring human capital.

2

Products and Services

2.1 Products and Services Description
2.1.1 Products and Services Description
Understanding the nature of government projects as well as the nature of Enterprise
Resource Planning projects, and recognizing its long sales and delivery cycle, FOCUS
products and services will cater for various revenue sources.
- Long term projects like Oracle eBusiness Suite implementation us will
maintain customer relation and provide persistent existence, however will be a
major cash flow burden.
- Short term projects like IT enabling services and training services on the other
hand are easier to sell and deliver and a fast revenue and cash source.
- Onsite and on-call support services will contribute as a constant and revenue
source.
- Software licenses will as well contribute to FOCUS revenue and cash flow.
- Improving resource utilization through outsourcing.
Accordingly, the following services will be considered in first two to three years.

-

Oracle eBusiness Suite Implementation Services with a focus on government
financials and human resources.
IT enabling services including single sign-on, database installation services,
and Identity management implementations.
Projects required training services for IT professionals and business users.
Resources outsourcing.

2.1.2 Unique Features
Addressing GCC market, FOCUS will have the following features:
- Strong Technical skills
- Arabic Language skills
- Good culture fit.

2.1.3 New and Follow on Products and Services
In two to three years, FOCUS will introduce new service which is implementation of
Document management and workflow management systems. A service will complete the
business process chain of enterprises.
In addition to this services related to Portal development will be considered.

3

The Market
3.1.1 Market Analysis
In 2007, IT companies working in Egypt and exporting IT services reported revenues
exceeding $190 million, with more than $75 million from export.
Vast majority of export revenues are generated in the GCC. 8
Total reported export revenues
Geographies targeted
(28 firms responding)
(32 firms responding)
KSA

20

Qatar

MENA &
Other(1)
14%

14

Egypt

11

UAE

10

MENA

USA/Europe
18%
Kuwait
1%
Qatar
2%
Bahrain
5%

KSA
47%

UAE
13%

2007 Total Exports = $77M

9

Kuwait

8

Bahrain

5

USA/Europe

5

Rest Africa

5

Other

5

Oman

1

More over, GCC market size in terms of IT spending will continue to surge. According to
a recent IDC study and preliminary IDC data, spending on information technology
expanded by just over 19% to more than $6.8 billion in 2006 and will grow by 15% on
2007.9
Those market trends have been discussed with sales and channel management of Oracle s
in Egypt and GCC market as well as major local system integrators in GCC countries.

3.1.2 Competitor Analysis
Number of Egyptian companies targeting GCC market in government sector and other
major sectors was about 40 companies. Based on ITIDA project initiative to support
achieves $280 million export target, and A.T. Kearney survey of current companies
strength and weaknesses the following key challenges were identified:
-

Quality assurance
Better Customer Relationship management
Marketing plans
Emphasize on project management
Better value proposition
High cost structure
Small size causing inconsistency in quality of resources and inability to cope
with long life cycle government tendering and delivery process.

Number of Egyptian firms targeting
major verticals
25

Government
14

Financial Services
Education

9

Telecom & Utilities

9
8

Healthcare

7

Oil & Gas
Manufacturing
Retail

4

5
3

Marketing Strategies and Sales
4.1.1 Introduction
Partnership with multinational technology provider and local system integrators will be
the major marketing and sales channel deployed to promote FOCUS.
Pillars to promote FOCUS:
- Participation in government events conducted by ITIDA and technology
providers.
- Attending road shows and industry exhibitions.
- Website

4.1.2 Pricing Strategy
Different major factors will accumulate to affect pricing of services:
1- Skill set required.
2- Industry/Country average accepted daily consulting rate considering competition
pricing.
3- Engagement total cost of ownership and duration.
4- FOCUS Cost structure and breakeven point analysis.

Table below illustrates pricing model per skill set:
Country/Skill
Project
Senior
Junior/Support
set
Manager
Consultant Consultant
Egypt
$700
$550
$300
Qatar
$1000
$800
$400
Kuwait
$900
$700
$400
Bahrain
$900
$700
$400
KSA
$800
$650
$400
Oman
$800
$700
$400
UAE
$1000
$800
$400

Senior
Developer
$400
$600
$500
$500
$500
$500
$500

Junior
Develop
$200
$300
$300
$300
$300
$300
$300

Given that both Qatar and UAE cost of living is around 20% more than KSA, Kuwait and
Bahrain, selling prices for UAE and Qatar will be set more than in other GCC countries.10
Average selling price for consulting man/day will be around $550 in 2008.

4.1.3 Sales Strategy
In general sales strategy will be based on a mix of channel management and direct
account management.
In Egypt, FOCUS will tend to go into direct sales model and account management model
however in GCC FOCUS will capitalize on synergy with large system integrators to
approach the market.

4.1.4 Sales Forecast
Sales forecasts will be governed by “best case scenario and “Probable case scenario”
models.
Best case scenario assumptions:
- All billable resources will be utilized 75% of their billable time (180
man/days).
- Revenue will be increased by 1.3 every year (incline in both average daily rate
and number of resources).
- License and License referrals revenues will be achieved.
Accordingly the below table illustrates Best Case Scenario sales forecast.
Revenue Source
Headcount
buddy shopping
License referral
License Revenue
License Support
Total Revenue

2008
15
$1,620,000
$50,000
$0
$0
$1,670,000

2009
20
$2,808,000
$84,500
$0
$0
$2,892,500

2010
30
$4,212,000
$109,850
$500,000
$0
$4,821,850

2011
35
$4,914,000
$142,805
$1,000,000
$110,000
$6,166,805

2012
40
$5,616,000
$185,647
$2,000,000
$220,000
$8,021,647

Probable Case Scenario
Probable case scenario assumes the following:
- Revenue sources will contain outsourcing, projects implementations, IT
enabling, support services as well as license revenues (License sales, S.W
support and License Referral fees).
- Projects implementation will go into long sales and delivery cycles.
- Average annual growth will vary from 10% to 25% according to type of
service.
The below table illustrates revenue forecast assuming Probable Case Scenario.
Revenue Source
Outsourcing
projects implementation
Support
IT enabling
Consulting Revenue
License Revenue
Total Revenue

2008
$724,680
$50,000
$66,000
$100,000
$940,680
$50,000
$990,680

2009
$942,084
$700,000
$132,000
$130,000
$1,904,084
$65,000
$1,969,084

2010
$1,224,709
$910,000
$198,000
$338,000
$2,670,709
$584,500
$3,255,209

2011
$1,592,122
$1,183,000
$264,000
$439,400
$3,478,522
$1,219,850
$4,698,372

In both scenarios, license prices were calculated based on license prices for Oracle
Applications price lists.11

5

Financials 12

To following pro-forma financial statements were based on “Probable Case Scenario”
revenue forecast model and adopted a conservative approach in terms of operations
expenses, employee salaries and benefits and credit policy for receivables aging.
The following inputs were assumed for calculations:
- 1% of revenue was allocated for marketing and sales commissions.
- Another 3% of Revenue was allocated to training expenses.
- Another 1% of revenue was allocated to other expenses
- Average monthly salary was set to $4500 first year with increase to $7000 in
year 5 (Although industry average is $2750.13
- Employees’ benefits were set to 15% of salaries first year to be increased to
25% in year 5.
- 90 days was set for receivables outstanding balance
- 30 days was set for payables outstanding balance.

2012
$2,069,759
$1,537,900
$330,000
$527,280
$4,464,939
$2,362,805
$6,827,744

5.1.1 Income Statement
The below table illustrates the projected income statement for FOCUS for 5 years.
Year 1
Year 2
Year 3
Year 4

Year 5

NET REVENUES

992,000

1,990,300

3,256,940

4,701,272

6,831,514

COST OF REVENUE
% of Revenues

1,002,08
0
101.0%

1,338,112
67.2%

1,901,496
58.4%

2,312,067
49.2%

3,186,276
46.6%

GROSS PROFIT
% of Revenues

(10,080)
-1.0%

652,188
32.8%

1,355,444
41.6%

2,389,205
50.8%

3,645,238
53.4%

OPERATING EXPENSES
Sales & Marketing
Research & Development
General and Administration
Total Operating Expenses
% of Revenues

211,840
59,920
171,587
443,347
45%

372,806
79,903
297,386
750,095
38%

528,789
132,569
336,526
997,884
31%

704,025
297,013
422,279
1,423,318
30%

866,630
368,315
529,782
1,764,727
26%

(453,427)

(97,907)

357,560

965,887

1,880,511

EXTRAORDINARY INCOME / (EXPENSE)

(45,000)

0

0

0

0

EARNINGS BEFORE INTEREST & TAXES

(498,427)

(97,907)

357,560

965,887

1,880,511

INTEREST INCOME / (EXPENSE)

0

0

0

0

0

NET EARNINGS BEFORE TAXES

(498,427)

(97,907)

357,560

965,887

1,880,511

0

0

0

(290,845)

(752,204)

(498,427)
-50.2%

(97,907)
-4.9%

357,560
11.0%

675,042
14.4%

1,128,307
16.5%

EARNINGS FROM OPERATIONS

TAXES
NET EARNINGS
% of Revenues

See Appendix 1 for Salaries Calculations

5.1.2 Balance Sheet
Table below will demonstrate balance sheet projections for 5 years.
Begin
Year 1
ASSETS
CURRENT ASSETS
Cash
Accounts Receivable
Inventories
Other Current Assets
Total Current Assets
PROPERTY & EQUIPMENT
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Debt
Accounts Payable & Accrued Expen
Other Current Liab
Current portion of long term debt
Total Current Liabilities
LONG TERM DEBT (less current portion)
STOCKHOLDERS' EQUITY
CommonStock
Preferred Stock
Retained Earnings
Total Equity
TOTAL LIABILITIES & EQUITY

Year 2

Year 3

Year 4

Year 5

1,000,000
0

347,533
275,181
0
17,856
640,570
33,333

650,115
472,895
0
28,660
1,151,671
30,000

389,893
1,815,000
0
110,000
2,314,893
13,333

447,601
3,135,000
0
190,000
3,772,601
6,667

563,574
5,280,000
0
320,000
6,163,574
5,000

1,000,000

673,903

1,181,671

2,328,226

3,779,268

6,168,574

0

0
0

0
154,474
17,856
0
172,330

0
249,345
28,660
0
278,005

0
957,000
110,000
0
1,067,000

0
1,653,000
190,000
0
1,843,000

0
2,784,000
320,000
0
3,104,000

0

0

0

0

0

0

250,000
750,000
1,000,000

250,000
750,000
(498,427)
501,573

250,000
1,250,000
(596,334)
903,666

250,000
1,250,000
(238,774)
1,261,226

250,000
1,250,000
436,268
1,936,268

250,000
1,250,000
1,564,574
3,064,574

1,000,000

673,903

1,181,671

2,328,226

3,779,268

6,168,574

1,000,000

5.1.3 Cash Flow statement
OPERATING ACTIVITIES
Net Earnings
Depreciation
Working Capital Changes
(Increase)/Decrease Accounts Receivable
(Increase)/Decrease Inventories
(Increase)/Decrease Other Current Assets
Increase/(Decrease) Accts Pay & Accrd Expenses
Increase/(Decrease) Other Current Liab
Net Cash Provided/(Used) by Operating Activities
INVESTING ACTIVITIES
Property & Equipment
Other
Net Cash Used in Investing Activities
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt
Increase/(Decrease) Curr. Portion LTD
Increase/(Decrease) Long Term Debt
Increase/(Decrease) Common Stock
Increase/(Decrease) Preferred Stock
Dividends Declared
Net Cash Provided / (Used) by Financing
INCREASE/(DECREASE) IN CASH
CASH AT BEGINNING OF YEAR
CASH AT END OF YEAR

1,000,000

Year 1

Year 2

Year 3

Year 4

Year 5

(498,427)
16,667

(97,907)
23,333

357,560
26,667

675,042
11,667

1,128,307
6,667

(275,181)
0
(17,856)
154,474
17,856
(602,467)

(197,714)
0
(10,804)
94,871
10,804
(177,418)

(1,342,105)
0
(81,340)
707,655
81,340
(250,223)

(1,320,000)
0
(80,000)
696,000
80,000
62,709

(2,145,000)
0
(130,000)
1,131,000
130,000
120,973

(50,000)

(20,000)

(10,000)

(5,000)

(5,000)

(50,000)

(20,000)

(10,000)

(5,000)

(5,000)

0
0
0
0
0
0
0

0
0
0
0
500,000
0
500,000

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

(652,467)

302,582

(260,223)

57,709

115,973

1,000,000
347,533

347,533
650,115

650,115
389,893

389,893
447,601

447,601
563,574

5.1.4 Fund
Begin
Beginning Cash
1,000,000
Equity
Common
250,000
Increase / (Decrease) Previous Period
Preferred
A Round
750,000
B Round
Total Preferred
750,000
Increase / (Decrease) Previous Period
Total Equity
1,000,000
Debt
Short Term Debt
Increase / (Decrease) Previous Period
Long Term Debt
Current Portion
Long Term Portion
Total Long Term Debt
Increase / (Decrease) Previous Period
Current Portion
Long Term Protion
Total Long Term Debt
Total Equity & Debt

1,000,000

Retained Earnings
Net Income
Dividends
Increase / (Decrease) Retained Earnings
Beginning Retained Earnings
Ending Retained Earnings

Year 1

Year 2

Year 3

Year 4

Year 5

250,000
0

250,000
0

250,000
0

250,000
0

250,000
0

750,000
750,000
0
1,000,000

750,000
500,000
1,250,000
500,000
1,500,000

750,000
500,000
1,250,000
0
1,500,000

750,000
500,000
1,250,000
0
1,500,000

750,000
500,000
1,250,000
0
1,500,000

0

0

0

0
0

0

0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0

1,000,000

1,500,000

1,500,000

1,500,000

1,500,000

(498,427)

(97,907)

357,560

675,042

1,128,307

(498,427)
0
(498,427)

(97,907)
(498,427)
(596,334)

357,560
(596,334)
(238,774)

675,042
(238,774)
436,268

1,128,307
436,268
1,564,574

5.1.5 Valuation
Assumptions
Month of IPO
Forecast annualized earnings at
IPO
P/E ratio at IPO

$1,128,307
15

Investment Round
Month of Investment
Investor required IRR
Amount of Investment
Required Monthly IRR
Duration of Investment

First
0
60%
$1,000,000
5.00%
60

Calculations
Market Capitalization at IPO

$16,924,598

60

Second
24
50%
$500,000
4.17%
36

Required FV for Investor at IPO
Individual Investor's Share
Individual Investor's ROI
Individual Investor's IRR

First
$10,485,760
62.0%
1049%
60%

Second
$1,687,500
10.0%
338%
50%

Cumulative Investors' Share
Cumulative Founders' Share

62.0%
38.0%

71.9%
28.1%

6

Appendices and references

6.1.1 Salaries Calculations Sheet

Net Revenues

Year 1

Year 2

Year 3

Year 4

Year 5

992,000

1,990,300

3,256,940

4,701,272

6,831,514

80,000

80,000

100,000
80,000
40,000
220,000

125,000
100,000
120,000
345,000

150,000
125,000
200,000
475,000

175,000
150,000
250,000
575,000

15%
12,000
92,000
9.3%

15%
33,000
253,000
12.7%

17%
58,650
403,650
12.4%

20%
95,000
570,000
12.1%

20%
115,000
690,000
10.1%

80,000
40,000
25,000
145,000

100,000
50,000
45,000
26,000
221,000

125,000
60,000
25,000
27,000
237,000

150,000
75,000
50,000
28,000
303,000

175,000
100,000
75,000
29,000
379,000

15%
0
145,000
14.6%

15%
33,150
254,150
12.8%

17%
40,290
277,290
8.5%

20%
60,600
363,600
7.7%

20%
75,800
454,800
6.7%

Sales & Marketing
Sales Manager
Marketing Manager
Customer service
Total Salary
Benefits
Percent (%)
Total benefit costs
Total S & M Compensation
% of Revenue
General & Administration
Chief Executive Officer
Chief Financial Officer
Accounting
Secretarial
Total Salary
Benefits
Percent (%)
Total benefit costs
Total G & A Compensation
% of Revenue
Service Personnel
Number of employees
Salary per employee
Total salaries
Benefits
Percent (%)
Total benefit costs

14
54,000
756,000

15
66,000
990,000

18
72,000
1,296,000

20
78,000
1,560,000

25
84,000
2,100,000

15%
113,400

20%
259,200

20%
312,000

25%
525,000

Total Salary Costs

869,400

15%
148,500
1,138,50
0

1,555,200

869,400
87.6%

1,138,500
57.2%

1,555,200
47.8%

1,872,000
39.8%

2,625,000
38.4%

225,000
12,000
1,106,400
111.5%

441,000
66,150
1,645,650
82.7%

582,000
98,940
2,236,140
68.7%

778,000
155,600
2,805,600
59.7%

954,000
190,800
3,769,800
55.2%

Total COR's Compensation
% of Revenue
Total Salary & Wages
Total Benefits
Total Compensation
% of Revenue

1,872,000

2,625,000

6.1.1 Working Capital
Net Revenues

Accounts Receivable
% of Revenue
Days Outstanding
Accounts Receivable
(Increase)/Decrease from Prev.
Period
Inventory
% of Revenue
Inventory Turns
Inventory Days
Inventory
(Increase)/Decrease from Prev.
Period
Other Current Assets
% of Revenue
Days
Other CA Value
(Increase)/Decrease from Prev.
Period
Accounts Payable & Accrued
Expenses
% of Revenue
Days
AP & Accrued Value
Increase/(Decrease) from Prev.
Period
Other Current Liabilites
% of Revenue
Days
Other Current Liabilities
Increase/(Decrease) from Prev.
Period

Year 1
992,000

Year 2
1,990,300

Year 3
3,256,940

Year 4
Year 5
4,701,272 6,831,514

16.5%
59
275,181

16.5%
59
472,895

16.5%
59
1,815,000

16.5%
59
3,135,000

16.5%
59
5,280,000

(275,181)

(197,714)

(1,342,105)

(1,320,000)

(2,145,000)

0.0%
0
0
0

0.0%
0
0
0

0.0%
0
0
0

0.0%
0
0
0

0.0%
0
0
0

0

0

0

0

0

1.0%
4
17,856

1.0%
4
28,660

1.0%
4
110,000

1.0%
4
190,000

1.0%
4
320,000

(17,856)

(10,804)

(81,340)

(80,000)

(130,000)

8.7%
31
154,474

8.7%
31
249,345

8.7%
31
957,000

8.7%
31
1,653,000

8.7%
31
2,784,000

154,474

94,871

707,655

696,000

1,131,000

1.0%
4
17,856

1.0%
4
28,660

1.0%
4
110,000

1.0%
4
190,000

1.0%
4
320,000

17,856

10,804

81,340

80,000

130,000

6.2 References

1

http://www.mcit.gov.eg/ICT_Strategy_Intro.aspx
Promoting Venture Capital Business in Egypt, FSVC July 2006
3
IDC Business Monitor Index – A.T. Kearney analysis
4
ICT Highlights and A.T. Kearney analysis report – Marketing IT Firms to Government Clients in the Gulf.
5
http://www.smart-villages.com/docs/about.aspx
6
http://www.dubaiinternetcity.com/why_dubai/
7
What really works – 4+2 formula for sustained business by William Joyce and Nitin Nohria
8
Source based on A.T. Kearney survey responses from 28 companies.
9
IDC report IDC#ZV02N on GCC IT spending http://www.idc-cema.com/?showproduct=30243
10
GCC Human Resources overview released Feb 2007 by www.bayt.com
11
http://www.oracle.com/corporate/pricing/pricelists.html
12
Financial model is based on Financial Projection model developed by Frank Moyes and Stephen Lawrence, Leeds school
of Business, University of Colorado.
13
GCC Human Resources overview released Feb 2007 by www.bayt.com
2

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