Lillicotch.com Business Plan
By Jim Lillicotch &
Melissa Aird (Duquesne University Chrysler Corporation Small Business Development Center)
1. Executive Summary
Lillicotch.com currently is a sole proprietorship, but will be structured as a one-person LLC owned and operated by James Lillicotch. Established in January 2006, we offer custom designs, promotion and optimization for small business websites. We also offer template solutions including training for clients who prefer to maintain their own site. With 10 years of experience in the industry, Jim has studied search engine optimization extensively. Using this technique, he has been able to increase clients' overall website traffic and functionality.
While Lillicotch.com targets small businesses with up to nine employees located within the Pittsburgh region, we have also assisted clients in numerous parts of the country with their website efforts. Because we compete in a highly competitive industry, we understand the importance of providing effective solutions but also tailoring those solutions to the needs of the individual client. We work with the client's budget in mind, first seeking open-source solutions that can provide the same quality and functionality of proprietary packages, yielding significant savings to the client. We believe in a Just-In-Time approach to services as well as products. When it comes to computer services, "If it works, SIMPLE IS GOOD."
2. Company Analysis
Lillicotch.com is a web development company that was started in February 2006 by Jim Lillicotch. The company will be structured as a limited liability company. While the company's first official customer was acquired in February of 2006, we have been helping small businesses with their websites for over ten years. The owner's extensive experience in website design, e-commerce solutions, and search engine optimization (SEO) will surely contribute to the success of the business. In short, Lillicotch.com will provide economical, but still effective business websites by providing as much or as little help as my customer requires.
Following is a list of the products and services that are available from Lillicotch.com:
- Selling custom web design services
- Having the customer define exactly what they want from their website and then to design a site that meets most, if not all, of their expectations.
- Reselling web hosting
- Web hosting is where a company lets you have your website on their servers that are connected to the Internet. They also sell bigger blocks of space to companies like Lillicotch.com who can then resell the space to the end user.
- Selling of information
- I believe information is the perfect product. Storage is available at very little cost, there is no need for a warehouse. Shipping is virtually free via the Internet. Even though that may not always be the case it should still be very economical. Information can be created or purchased and then sold over and over again. Types of information Lillicotch.com can sell:
- Templates of websites.
Basic designs of websites can be sold as templates that the customer can copy and plug their own information into
- Software and instructions.
- There are many free open source programs that will do almost any application. I will recommend the best of these programs to my customer to download for free and help them install, set up, and run them for an hourly fee. Save that help as an e-book and after that sell it to anyone else who needs help with that program.
- I plan to save all of my help and publish them into e-books that can be sold.
- Google AdSense is a fast and easy way for website publishers of all sizes to display relevant Google ads on their website's content pages and earn money when visitors click on the ads.
3. Management Personnel
Lillicotch.com will be structured as a limited liability company (LLC) and will choose to be taxed as an S-corporation. This structure was chosen for two primary reasons - liability protection and tax advantages. Being taxed as an S-corporation will ultimately reduce the amount of self-employment taxes owed by the owner.
As a one-person operation would imply, the majority of business roles will be filled by the owner. Legal and accounting services, however, will be outsourced. The owner's resume is here.
4. Industry Analysis
Lillicotch.com has chosen to target small businesses within the Pittsburgh Metropolitan Statistical Area (MSA) that have nine or fewer employees that have something to sell on the Internet. This market was chosen because they likely do not have an in-house Information Technology department and are most likely to outsource this type of work. According to the U.S. Census Bureau's 2002 County Business Patterns report, there are 42,346 small businesses with nine or fewer employees within the Pittsburgh MSA.
The fact that the Internet and Internet business are going to continue to grow exponentially is pretty much unquestioned. According to analysts Netcraft, a total of 17.5 million sites were added to the Internet in the first three quarters of 2005 making 2005 the strongest year ever for Internet growth and surpassing the previous yearly high of 16 million, recorded during the dot-com boom in 2000. Furthermore, the Hewlett Packard 2005 Small Business Survey revealed some encouraging trends. According to the survey, 81% of businesses plan to increase technology spending in a variety of ways (company website, online services, weblogs, and technology overall) over the next two to three years. Additionally, 85% of businesses who use a local company for technology service support said their number one reason for doing so was because they prefer supporting local businesses.
It is now necessary for all small businesses to have a website. A website has to be used as a selling tool, with as much importance as any other tool. With the sheer number of websites on the Internet, though, simply having a website is not enough. Utilizing Search Engine Optimization (SEO), a recent trend in web design, anyone can have the power of the search engines work toward or away from his or her site. If the site is designed to be friendly to the search engines, they will send traffic. On the Internet, traffic is everything. Employing a company like Lillicotch.com, who specializes in SEO gives the small guy a good advantage.
An online search of "web site developer" on the Yellow Pages (Superpages.com) returned seventy company listings. Of these, twenty-five were not actually in the Pittsburgh area, six were just web hosting companies that offered "free packaged sites" or software to write it and one company actually had no site. This leaves thirty-eight that are potential direct competitors. They fall into two distinct categories - big budget, multi-departmental companies with many employees versus one- or two-man operations, more similar structurally to Lillicotch.com. Following are examples of each:
Nauticom (pittsburghwebdesign.net) - Having been in business since 1989, Nauticom spends a considerable amount on advertising and, in doing so, have developed significant brand name recognition. In the Internet business that is the Old Guard. While Lillicotch.com cannot match Nauticom's advertising budget, we have considerably less overhead, thereby allowing us to compete by providing our clients with everything they need, but not more. Large companies like Nauticom typically sell their services in pre-defined packages, which may or may not be in the customer's best interest.
Based on the services listed on the company website, Lillicotch.com can provide everything that Nauticom offers.
Computers Made Easy (www. janescomputersmadeeasy.com) - Computers Made Easy appears to be more similar to Lillicotch.com. Computers Made Easy is a web design firm based near Greensburg, PA - just east of Pittsburgh. Samples of their work show simple, clean designs. The fact that they came up third during a search for "Custom Web Design Pittsburgh" suggests that they know how to optimize their site to be search-engine friendly. They have since dropped to seventh, but that's still very good for a small company.
In addition to web designers, there are a number of pre-packaged website templates as well as web design software like Microsoft FrontPage and Macromedia Dreamweaver. For the do-it-yourselfer, these are viable options, however, many will still seek outside help for troubleshooting, maintenance and hosting. And, finally, everyone has a niece, nephew or friend who "knows how to design websites". The question is, does a company want their site to look like someone's niece or nephew designed it. Even if it is aesthetically pleasing, it might not function well or be attractive to search engines.
5. Analysis of Customers
Lillicotch.com's primary target is small businesses with nine or fewer employees located within the Pittsburgh Metropolitan Statistical Area (MSA). According to the 2002 U.S. Census County Business Patterns report, there are 42,346 such businesses. Initially, we will not target any particular industry as potential clients. Our focus may, however, evolve as our customer base and portfolio evolves. It may trend toward one or two particular industries as we gain experience and an actual track record of success in working with clients of any particular industry.
In addition, Lillicotch.com will focus on developing websites for companies who have a product or service to sell. Even if it is simply used as a promotional tool to get the visitor to act - to email, to call, to buy, etc. - a website can be considered a business's front porch. It can be friendly and approachable or cluttered and uninviting. Many small businesses either have no site or one that is stagnant and costing them money. They know they should be making money for the business and they don't know what to do.
Company websites for the Internet are increasingly popular for businesses of all sizes. The cost of designing and establishing a website is a manageable expense for most businesses. The question, however, is the use that the website will serve. A site might be used for public relations, advertising, or direct sales. Each of these objectives has different implications for the business in terms of impact and cost.
Public Relations websites are designed to improve the image or reputation of the business. New businesses or new products need exposure to develop name/brand recognition prior to a strong marketing campaign.
Advertising websites are aimed at attracting new business. The company listing may be part of a collective regional or specialized-category website in an attempt to attract the attention of potential new customers. The focus is on contact information, location maps, and current offers designed to lure customers to the place of business. Sites also offer e-mail communication, in which case the site must be serviced daily to insure prompt responses.
E-commerce (Direct Sale) Websites offer customers the opportunity to buy online. Expert assistance in setting up the site is essential. An effective sales site offers credit card charge options with security provisions. (Mail-in payment provisions expand the offering to a mail order business enterprise.) Extensive graphic representations of the items for sale are necessary. The ease of shopping electronically is very important for the customer. Although a good website design can be expensive, an amateurish site will probably be a total waste of money.
Not all technological investments, even when smart, will enhance the bottom line. The goal is to keep up without overextending the customer's business resources.
Lillicotch.com can build these customers a new site or rebuild their old one into a site that is more search engine friendly. That way the search engines will start sending them traffic. Getting traffic to their site should be a company's main goal, because on the Internet traffic is everything.
Then what they have is a site that makes them money instead of costing them money. Lillicotch.com anticipates assisting businesses that want to do nothing and the ones that want to do everything in terms of maintenance. Customers who want to do some of the work themselves will be more likely to be interested in automated solutions.
Custom Web Design Services
The prices for website design and SEO vary tremendously based on experience and success. I believe that my price will depend on my success. Personal research suggests that an average complete small website is about $2,000. The final price would depend on how much useable information the customer is able to provide (pictures, video, text, etc.). Every job will be quoted individually.
There will be customers who will want me to do everything. Web hosting is sold to resellers. I can just buy what I need and resell for $6.95 per month which research suggests seems to be about the average.
Lillicotch.com designs and makes available do-it-yourself website templates. These will be available to download at no charge. If needed, manual technical assistance (set-up, maintenance, promotion, etc.) will be available for a fee. It is likely that manual assistance (most likely via our website, email or phone) will be offered at the lowest level as automated assistance and at $75/hour for advanced help. We also intend to offer basic, automated assistance. At this time, it is undetermined whether we will charge a fee for automated assistance.
Software and Instructions
There are some software products that can be purchased and resold, but we intend to concentrate on the Open Source community. There are many exceptional software products that are available for free. You are permitted to charge for them, but we plan to give the software away and charge for help and customization.
We have written an e-book which is posted at Lillicotch.com as the "Start your own website business" section. It is expected that this e-book will be given away as a promotional tool as an incentive for people to sign up for our newsletter and blog. We plan to write others as well to sell or give away, including the instructions to the software that will be given away.
7. Alternative Revenue Streams
Google AdSense is a way for website publishers of all sizes to display relevant Google ads on their website's content pages and earn money. Because the ads are related to what visitors are looking for on that site - or matched to the characteristics and interests of the visitors that content attracts - That can earn money and enhance content pages.
We also provide Google web and site search to our visitors, and earn money by displaying Google ads on our search results pages.
8. Marketing Plan
Lillicotch.com's desired strategic positioning
Initially, Lillicotch.com plans to design and develop websites for people and to help people work their own sites. We intend, however, to move into selling information on an automated basis. We believe that information is the perfect item to sell - there is no shipping or warehousing and storage is very inexpensive.
Lillicotch.com's desired image and branding strategy
My brand is my name. For now the logo is a purple cursive capital .
Our current web colors, purple and tan, will be our main color theme. The purple (font color 800080) is intentionally a "web safe" color. That is, there are several colors that were designated right from the beginning as the "colors of the web". You can be assured this color will look the same in any browser.
We strive to be known as an honest and reliable source of quality information.
Lillicotch.com's promotional strategies
We will utilize search engine optimization to drive traffic to our website. MSN and some others have already begun to read Lillicotch.com. The biggest search engine, Google, has about a 6-month waiting period for most any new sites.
We plan to release for syndication articles about web design, promotion, and search engine optimization. These articles are distributed for free through several sources. They are then published on other websites with a link to our site through our signature file (with a link to Lillicotch.com) at the end of the article. This can also drive traffic to our site through the search engines, as some of these sites can be rated much higher than ours may be.
Word of mouth will play a large role in promotion. I have already compiled a e-mailing list of all of my friends and family. I plan to send a newsletter to an opt-in e-mail list as well as provide an RSS feed on my blog.
We will develop a news release program that extends your reach and generates inquiries at a fraction of the cost of advertising.
I plan to take advantage of networking opportunities by joining any number of organizations. At this time, it is uncertain as to which will be the most beneficial to my business.
Current and potential strategic marketing partnerships/ alliances
Google ad sense for advertising revenue
ezinehub.com for advertising
goarticles.com for advertising
I also plan to use articles by others on my site to enhance content, provide more information for the search engines, and to have more pages on which to sell advertising.
9. Management Team
Lillicotch.com will be structured as a one-person LLC. I am passionate about what I do. This way for every business decision, I get to decide. A newfound freedom will unleash my creative talents. I am passionate about this business idea.
I do, however, have working relationships other professionals including photographers, software developers and others with whom I can collaborate and in that way improve all of our businesses. Additionally, Lillicotch.com will consult professional advisors including a lawyer and an accountant.