SBA Business Plan for 2004

20 BUSINESS PLAN 2004 20 U.S. SMALL BUSINESS ADMINISTRATION 8(a) BUSINESS PLAN OMB Approval No.: 3245-0331 Expiration Date: 07/31/2004 CONTACT PERSON: Edwin Garcia TELEPHONE NO. (757) 722-6600 SBA STATEMENT ON REPRESENTATIVES AND FEES You are not required to use a representative to complete this business plan. If you chose to hire a representative for this purpose, the following information must be provided: Names of Representatives and Addresses Bernand Myrick Need Address Description of Services Hourly Amount Rate Paid Amount Due None Technical Writing $ Consulting, etc. Bernand Myrick is an on-call Technical Consultant, who Is regularly employed by GTech Networks for specific projects His time on this project was not exclusive _______________________________________ Signature of Principal _________________ Date _______________________________________ Signature of Representative _________________ Date SBA Form 1010C (7/01) Previous Edition is Obsolete TABLE OF CONTENTS SECTION PAGE I II III IV V VI VII VIII IX X XI EXECUTIVE SUMMARY BUSINESS HISTORY, BACKGROUND, AND OBJECTIVES BUSINESS ENVIRONMENT PRODUCTS AND/OR SERVICES PRESENT MARKET COMPETITION MARKETING PLAN MANAGEMENT AND ORGANIZATION BUSINESS RESOURCES FINANCIAL PLAN/DATA CONTRACT SUPPORT TARGETS 1 2 5 6 7 10 11 13 15 19 30 SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 2 SECTION I - EXECUTIVE SUMMARY Briefly describe the fundamental elements of your business. Describe what business you are in, why you are in it, and what you hope to accomplish. For example, describe your business in terms of where it has come from, where it is now, where you want it to go, and how you plan to get it there. This is a complete summary of your business plan and should be referred to on occasion by you and your assigned Business Opportunity Specialist to get a quick overview of your plan. You should prepare the summary after you have completed all other major components, which follow. GTech Networks LLC started in 1996 as CompuCare, a computer service company focused on providing basic PC repair and maintenance. Over the years, GTech Networks has been committed to service excellence, expansion of core competencies and realignment of services to become more competitive in the new emerging IT market. We have matured our technical capabilities to include network administration, help desk support, software installation and training, cable installation, reseller of computer and communications equipment, and IT solutions. GTech Networks have satisfied and reference-able customers from Maine to Florida and from Virginia to Los Angeles and business strategies in place that will enable us to provide services nation-wide. It is the goal of the founder and CEO (Eddie Garcia) that GTech Networks become the desired name brand of IT services for commercial and government IT consumers and replicable IT companies seeking teaming partners. GTech Networks continues to examine ways in which we can better position ourselves to grow our presence on the NMCI (Navy/marine Corp Intranet) contract. This is an extremely competitive market for us but will pay large short and long-term dividends in terms of revenue and partnering opportunities. While we have only supported 2 NMCI projects, we realize that there are many commercial and government contract opportunities nation-wide that GTech Networks could partner with EDS to support. This would provide a means of consistent/stable growth. SECTION II - BUSINESS HISTORY, BACKGROUND, AND OBJECTIVES 2. Briefly describe when, how, and why you formed the company and its development so far. Garcia CompuCare was established in September of 1996 after being awarded a small service contract by Wang and later a warranty work contract with General electric. In 1999 the CompuCare name was changed to GTech Networks, LLC that more appropriately identified with the company’s’ emerging capabilities in a growing networking and computer IT market place. The challenge and personal gratification of expanding IT services, valued customer service, company growth, realizing GTech Networks economic potential, and career enhancement possibilities for GTech Network employees continue to motivate Mr. Garcia. 3. List your short term (next 12 months) and long-term objectives. Short Term Objectives include:    Maximize use of our 8(A). Maximize use of HUB Zone status. Expand our participation in the US Small Business Administration 8(A) Business Development Program. Increase working capital and seed money to tap into new and larger opportunities. Page 3  SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc.  To become a reseller of satellite and high–end communications equipment to the U.S. Army. Obtain an SBA-guaranteed Line-of-credit for $180,000.00 to support planned projects. Continue to develop contract opportunities with EDS and ASC. 100 plus technicians in the field, with an office force of 10-20 people within I to 2 years. Expand contracts with the military through prime and 3rd party contractor. 600K to 1 million in revenue with in the next 12 months.      Long-Term Objectives include:  Teaming relationships with several other companies to include Rollouts Inc., Parallel Technologies and Seneca. Continue actively marketing and seeking to expand our service in Virginia, North Carolina and Puerto Rico where Equant is our upline customer. In addition to working with Equant, Qualxserv also considers us to be a quality service provider in much of the continental United States. Increase core competencies and skill mix/level of expertise. Emerge as a preferred provider of IT services and solutions 4-5 million in revenue within the next 2 years.     4. Describe your company's major successes or achievements to date including difficulties and/or Obstacles that your company has overcome. NMCI GTech Networks provided support to the Navy and Marine Corp Intranet (NMCI - $4.6+ billion) project. Support included the refresh of classified and unclassified computers and personnel to augment the programs data analyst staff in the tidewater area. Our major obstacle was to provide our service in such a way as to considered a preferred provider. Changes in NMCI contracting strategy has made more difficult for us to compete in recent time although our persistence has recently bore fruit… we have been added to the contractor database that site managers query to obtain qualified personnel. U.S. Navy Provided hardware and software installation and configuration for computers being installed by the Navy. Because of the poorly planned deployment schedule, GTech Networks profits would have been marginal and period of performance drawn out. After convincing the CTR to allow GTech to modify and manage the deployment schedule and logistics, GTech turned a relative unprofitable project into a very profitable one in half the time and with minimal disruption to the work place. Secret Clearance GTech Networks acquired a DOD secret clearance in 2003. We are currently working to establish a teaming relationship and classified project support with Seneca that has l enable us to seek after a Top Secret (TS) level clearance… TS clearance pending. SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 4 5. Describe how the company was initially capitalized, and how it has been funded since its founding. GTech Networks, LLC was originally founded as a sole source proprietorship under the trade name Garcia CompuCare in 1996. The company was small and all capitalization was provided by the owner Edwin Garcia. Occasionally, but infrequently, supplemental funds were obtained using personal loans obtained by Mr. Garcia. Some credit was used, but the business primarily operated on a cash basis. GTech Networks, LLC was incorporated on May 24, 1999 as a joint ownership between Edwin Garcia and Michael Garcia, a father-son corporation. Ownership of GTech Networks, LLC was transferred to sole ownership by Edwin Garcia in August 2000. This was done as business expediency, because Michael was still a minor and his ownership position complicated management of the business. GTech Networks continues to minimize capitalization costs by utilizing the office space and facilities provided by the Hampton University Incubator program. The cost is minimal and provides office space, conference and training room and other office capabilities. GTech also manage costs by keeping the number of full-time staff at a minimal tracking with the stability and growth of the company. All field engineers at GTech Networks, LLC are contracted as independent contractors. GTech Networks simply functions as the job broker and consolidates the field engineer’s invoices to be passed on to the primary contracting agency. Field engineers are paid by GTech networks, but only after their invoices are paid to GTech Networks by the primary contracting agency. There is little or no capitalization required for payroll or other employee-related expenses in the current business model. Further growth, and participation in government contracts will, however, require significant additional capitalization. 6. Describe any important changes in the structure, ownership, management, or key personnel which have taken place in the past year. GTech Network has been undergoing operational restructuring and realignment of it’s service offering. This was a necessary action to target and compete in a more technical and lucrative IT market. Operations, office administration, and new business development is currently performed by a small versatile team and select consultants. Business opportunities are carefully scrutinized and selected to ensure optimum opportunity and sustained growth. The owner and founder Eddie Garcia and Josh Frank are the primary full-time employees supporting day-to-day operations and business development. As required, consultants provide technical writing assist with business development and strategies. SECTION III - BUSINESS ENVIRONMENT 7. Describe how environmental factors such as the local or national economy, changes in population, interest rates, changes in levels of employment, climate for small disadvantaged businesses in your market, etc. may affect your business.  GTech Networks has a presence throughout the eastern United States and as a result many regional environmental factors may impact service delivery. NMCI is another obvious and immediate business environment in which GTech Networks desires to become a stronger player particularly since the company is included on the list Page 5  SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. of preferred sub contractors to support NMCI work.  As a result of corporate restructuring, downsizing has greatly reduced costs but has put a tremendous amount of work a few employees. The state of the economy does have some impact on GTech’s non-8a market, but not a direct impact. GTech has contracts (indirectly) with both Dell and IBM for field services in the markets from New York to Puerto Rico. We currently have a flat market in this sector, maintaining a sufficient job pool to keep the technician pool fully satisfied with the level of employment. The New York City and surrounding area market is growing slowly, adding 2-3 technicians per 6 months. There is a strong possibility of picking up a support contract, for 5-7 technicians, from an incumbent in the Washington DC and Northern Virginia area where we currently have limited presence. Puerto Rico market is flat, but the Owner will be visiting that area within the next month to see about stimulating some growth in that market. Miami Florida is a developing market with an expected growth of 5 or more technicians in the next year. Tidewater Virginia to Richmond Virginia is currently well served by GTech Networks but not much potential growth has been experienced in the non-8a market. The 8a market is wide open. GTech Networks has contracting opportunities that we cannot pursue until an SBA backed line of credit is acquired. The line-of-credit application is currently being circulated among local lending agencies.       SECTION IV - PRODUCTS AND/OR SERVICES 8. List and describe your present products/services. (This list is not necessarily the same products/services for which you are requesting SBA approval of SIC codes for 8(a) contract support in item #50.) GTech Networks provides the following technical services:  Skilled pool of Microsoft Certified System Administrators / Engineers / Trainers (MCSA/MCSE/MCT); ETA certified fiber optic installers; CompTIA certified Trainers, A+ computer technicians, N+ Network administrators; Dell Certified technicians in all Dell field service areas, IBM Certified technicians in all IBM field service areas; web and database developers, and cable techs. These personnel can be utilized as a nucleus for training/retraining for other customers and training additional GTech Networks technicians and providers in a diverse field of projects.    Microsoft, Dell computer, and Ingram Micro reseller. Software and applications installation and training. Excellent in filling the niche for providing technicians on-call in diverse areas of the United States and Puerto Rico. Cable and fiber installation. MS Action Partner   SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 6   Strengthen IT solutions capabilities and develop support. On-site warranty work. 9. Describe any planned changes or additions to your present line of products/services within the next year.   Voice/IP products and services. Scottie systems and related services.   NMCI system administrators and helpdesk support. Also plan to begin offering our services as a skills-builder organization offering on-the-job, hands-on training services for those organizations that are just venturing into the Windows 2000, Windows XP arena. We have a long list of skills in these operating systems. SECTION V - PRESENT MARKET 10. Describe your present market. Give geographic location of your customers and types of customers you serve. Our present market is completely non-8a business. GTech Networks has half-dozen larger companies (some who are also job brokers, between us and the ultimate vendor customer) who contract with us to provide services on their behalf in our places of presence. We in turn act as a job-broker and administrator to the end-technician who provides the desired services to the objects in the field. We have full-time presence in high-density market areas from Northern New York State, to Ohio, to Puerto Rico. We will sometimes do the one-time jobs in local, isolated areas, provided that the ultimate vendor-customer is willing to compensate our contractor for travel costs. We also provide point of sell and on-site warrant work in the Tidewater area. Commercial Customers:  Best Buy  Sears  Comp USA  Walmart  Foot Locker  Dress Barn Government Customers:  US. Army  US Air Force  Navy Marine Corp Intranet (NMCI) 11. What is the growth potential in your market? Our markets are two-fold: (1) our current non-8a service market and (2) related 8a services that have yet to be attained by GTech Networks. Growth potential for GTech Networks’ non-8a market is substantial, especially as long as we continue to provide superior service, bringing our results to the attention of the vendor-customer’s contracting representatives. There is always a churn in the low-end technician market, which we take advantage of, by: providing superior quality control and services; treating our vendorcustomer’s end customer as if it were our own, yet always associating our services with the SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 7 vendor-customer, instead of attempting to represent GTech Networks. These actions have the potential to continue to open new market areas to GTech Networks, to provide substantially the same field technician services. The nearing deadline for support for many of Microsoft’s existing OSs offers opportunities for exponential growth in the non-8a roll-out market. More and more small and medium businesses are finding themselves with an immediate requirement to begin migration to Windows 2000 and XP, without the technical know-how, or the personnel resources to accomplish that. Our growth potential in the 8a market is equally as full of opportunity, because of the many parallels between our non-8a and potential 8a markets. 12. Identify major customers and include a brief description and explanation of any special relationship between your company and its customers. Our primary up-line customer is QualxServ. They are our up-line customers in the Albany, NY, Long Island, NY, Queens, NY, Bronx, NY, Manhatten, NY, Brooklyn, NY, Staten Island, NY, New Rochelle, NY, White Plains, NY, Raleigh, NC, Durham, NC, Goldsboro, NC, Greensboro, NC, Jacksonville, NC, Newport, NC, Bogue, NC, Atlantic Beach, NC, Harkers Island, NC, Hertford, NC, Curituck, NC, Elizabeth City, NC, Manteo, NC, Plymouth, Tyner, NC, Jersey City, NJ, Hackensack, NJ, Freehold, NJ, South Plainfield, NJ, Trenton, NJ, Paterson, NJ, Newark, NJ, Montvale, NJ, Parkridge, NJ, Woodbridge, NJ, Hightsbrook Heights, NJ, Vineland, NJ, Atlantic City, NJ, Yorktown, VA, Glouster, VA, Newport News, VA, Hampton, Virginia Beach, VA, Norfolk, VA, Portsmouth, VA, Chesapeake, VA, Williamsburg, VA, Richmond, VA, and Charlottsville, VA markets. GTech Networks has provided end-customer services for QualxServ since 1996 in support of Dell, Hughes, Packard Bell, Hp, Compaq, IBM, Sun Microsystems, and Apple equipment. Within the last 6 months, QualxServ has given IBM equipment services contracts to GTech Networks in these same markets. QualxServ has been our up-line customer on a number of potential 8a rollout projects for Dell equipments. QualxServ has also offered to subcontract GTech Networks to provide 30 technicians for roll-out of some of the NMCI Dell hardware, but that subcontract has never materialized. Year-to-date, QualxServ has been the up-line customer for $337,024 in business for GTech Networks. In all of the QualxServ contracts, GTech Networks has provided services anonymously, as the agent for the top-end vendor-customer (e.g. Dell, etc). In addition to QualxServ, GTech Networks provides or has provided services for up-line customers: Ardent, ACR, Equant, Parallel Technologies, and others. 13. Describe your current marketing approach. How do you sell your products/services? (Attach company brochure used as a selling tool, if any.) Our current marketing approach has been telephone contacts and word-of-mouth. Since beginning the entry into the 8a program, we have attended several 8a contract fairs, such as the recent OSDBU Procurement Conference in Washington DC. Our approach has been exchange of business cards, followed by a follow-up telephone contact, and office visits. We currently maintain a web-based “business card” web site at www.gtechnetworks.com. Current plans are to expand that site into a more marketing-oriented site. We are currently redesigning our company brochure in conjunction to marketing is eyeball-toeyeball, telephone, or business card based. Before any contact, we develop a focused white paper, with information on how we fit the vendor’s needs and our capabilities. SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 8 14. Describe your pricing policy. GTech Networks does not have a fixed pricing policy. We negotiate each contract, sometimes actually negotiating specific sites independently. We try to avoid any opportunities, which do not have a potential to return 30% profit, unless that opportunity also represents a very real probability of opening up a new customer or a new market. 15. Describe your credit and collection policy. Since most of our business is under contract to up-line customers, there are no credit issues. We perform the work; sign off the jobs on-line at the up-line customer’s web site, in real-time; and invoice, typically weekly. Most of our up-line contracts are on a net-7 days basis, but sometimes we must take Terms & Conditions that specify net-30 and even, in one case, net-45. We try to avoid net-30 or higher contracts, because we don’t have the capital to carry on for longer collection periods. This is the primary reason that we are also seeking an SBAguaranteed line-of-credit, to be able to carry 30 technicians through a net-30 collection cycle, with an additional week of cash reserve. We never collect from the end customer, that is a function of a prior transaction, usually made between the end-customer and the top-end vendor-customer. Since we don’t need to extend credit, we don’t need a collection policy. Our accountant is continuously monitoring all outstanding invoices and usually a phone call will resolve any collection issues. 16. If your business is seasonal, explain how the company adjusts to seasonal factors. GTech Network’s business is not subject to critical seasonal factors. There is some seasonal variation, but this is more related to the purchasing cycles of businesses. SECTION VI – COMPETITION 17. List those firms you have identified as primary competitors in your market(s). Identify their strengths and weaknesses. Primary Competitors Competitors 1) EDO 2) Webster Data 3) Data-line Strength Strong presence/experience Presence Not determined Weakness Higher rates N/A Not determined 18. What advantages and disadvantages does your company have as compared with its primary competitors? GTech Networks Competitors 1) EDO GTech Disadvantages No presence Less experience in key positions No presence GTech Advantages Lower rates Flexible salary Low overhead Lower rates Page 9 2) Webster Data SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. 3) ManTech Less experience/opportunity at providing high-in tech services Up-line customers… don’t own cust. Relationships Low quality Lack cash flow for business development and project seed/implementation money. 4) Non 8a Flexible salary Low overhead Quality technicians Certified technicians Good customer skills Low overhead increases our competitiveness. Use of independent contractor technicians and service providers enable us to attract and hold a better grade, and more dedicated technical labor pool. SECTION VII - MARKETING PLAN 19. Describe the customers and geographic territory to be targeted for marketing efforts to generate non-8(a) revenue. Our website at www.gtechnetworks.com shows a pretty good view of where Gtech Networks markets are currently. We will continue to develop and maintain good relationships with both toplevel and up-line customers. As we develop momentum and ownership of customer relationships, we will displace some of the up-line pass-through vendors. It is our desire to increase our role as an up-line job broker, dealing directly with the top-end vendor-customers. Target customers include: Primarily: Tidewater, Richmond and DC areas. 20. Describe the federal agencies and geographic territory to be targeted for marketing efforts to generate 8(a) revenue. Our first priority for 8a targets will be those where our non-8a business overlaps with the 8a opportunities. EDS, and their NMCI (Dell) contract will be our first target, as soon as we can get the DoD Secret security clearance and the 8a guaranteed line-of-credit. Since our corporate headquarters is already in the major NMCI fleet area of Norfolk / Virginia Beach, that would be our first geographic territory, but our existing presences would make any geographic location a viable marketing target. 21. Describe the marketing techniques, strategies, and tools you will use in the future to promote your business. Address 8(a) market segments and non-8(a) market segments separately.  FedBizOps search tool to identify key markets, who is seeking contractors, who is bidding in those markets, and who is winning in those markets. EDS’ E-TIPS database in support of NMCI. 8a set-asides As we gain more experience and exposure as a qualified 8a, DoD Secret subcontractor, we seek to develop semi-permanent relationships with select trusted contractors as to Page 10    SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. become their 8a preferred provider.  Plans to gather documentable 8a performance experience, experience in proactive marketing, and proposal writing, we will begin competing against established 8a companies. For non-8a business, GTech Networks will continue developing the market that we currently have. We will apply the experience gained in our dealings with other FedBizOps bidders to begin identifying non-8a non-SBA opportunities where we have a service to offer, a chance to win, and an opportunity to make a profit. We will begin bidding for those selected contracts as we develop our experience in identifying win-win opportunities. We will utilize our 8a and non-8a customer base to identify business opportunities, BEFORE they appear in FedBizOps. We will then use our knowledge of those customer’s, their needs and limits, and their boundaries to pre-develop strawman proposals, which deal with all of that customer’s needs, and which have a very strong chance of winning against the general competition market. When the opportunity is published in FedBizOps, we will be ready to polish the strawman and be fully responsive to the actual RFP. We will also pursue state-sponsored business, by joining a small-business consortium and partnering with known winners.   SECTION VIII - MANAGEMENT AND ORGANIZATION 22. Describe your management team and list its strengths and weaknesses. The present management team consists of two full-time employees, and two consultants that are retained on an on-call, as-needed basis. The principal manager is the owner, who is active, full-time in managing the company, making policy decisions, and training other managers. His strengths include excellent customer service skills, problem solving, the ability to motivate, and inspire others, awareness of self-limitations, drive, and patience. His weakness is a lack of in-depth knowledge of business development and management. Recognizing this, he has networked and consulted with others to mitigate and overcome. Josh Frank is an active, full-time business and job manager. He is on a fast-track training program and capable of taking on a growing amount of business challenges. His strengths include being a quick learner, has an aptitude for business, motivated and committed to the health and growth of GTech Networks. His weakness… he will continue to require training and experience to become more effective. The overall weakness of this team is managing and acting on the increasing opportunities in a timely manner while conducting day to day operations. 23. Describe your plan to further develop your management team.  On the job training… business and management techniques, strategies and experiences provided by the founder and CEO. Management consultants will provide instruction and training that will include fundamentals of office and time management, best practices, technical writing assistance and business development strategies.   Seminars and contemporary IT management literature SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 11  When business and income levels are sustained, the first new hire will be for a “Marketing Manager” and proposal writer. 24. Describe your management succession plan. Who will take over in the event of the incapacity or continued absence of any owner or key employee? Primary management is by the President/CEO. Management succession will be from President/CEO, to CIO, to Field Operations Manager, to Owner, in the event of incapacity or continued absence of the primary manager. 25. Describe the need for, and how you will obtain, additional management personnel based on present and projected sales. There is currently no need for additional management staff. The underlying organization was designed to flex with accordion-like changes in business. Most changing needs will be met by employing the temporary/consulting staff more fully. When the need arises to hire additional managers, there is a very large pool of 8a and large contractor managers in the local area. Adding management staff will present no problems. SECTION IX - BUSINESS RESOURCES 26. List the major operating equipment that your company owns or leases: (Check One) Owned Leased Owned Owned Owned Owned Owned Owned Owned Owned Owned (If Owned) Cost 600.00 840.00 840.00 890.00 1494.00 731.00 1063.00 1063.00 400.00 Quantity 1 1 1 1 1 1 1 1 1 Description Age Condition Laptop Computer 2 year * Dell Computer Dell Computer Panasonic Phone System Sony Camcorder Olympus Digital Camcorder Dell Computer Dell Computer Brother Laser Printer * Everything here is within the last 6 months (except as noted) all in excellent condition 27. List major suppliers, location, and payment terms. Major suppliers include:  Parallel Technologies, St. Louis Park, MN, Line-of-credit with net 30 terms       Norfolk Wire and Electronics, Virginia Beach, VA, Line-of-credit with net-30 terms Office Max, Internet Transactions, Credit Purchase Graybar, nearest location, Cash DELL, central warehouse, net 30 Cisco Systems, dedicated Cisco distributors, Credit arranged per order Ingram Micro, central warehouse, net 30 SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 12 28. Identify other outside resources used/or needed to fulfill customer requirements. Independent contractors who provide end-user services are required to supply their own consumables, transportation, and tools. GTech, on occasion will supply highly specialized tools. In general, these tools are rented, for only the period needed. 29. Describe your quality control procedures. If you do not have quality control procedures, outline your plans to put them in place. GTech Networks has a strong quality control process in place. It begins with pre-training, using the most highly skilled and most trustworthy existing personnel. No person is assigned a job from the job pool, if they have not completed the vendor’s certification exams for that equipment. At least one person monitors ALL in-process and assigned jobs every day. If a job is (or is not) going to be serviced on the day it is scheduled, the technician updates all job ETAs prior to noon every day. Each technician is tasked with “completing” or “deferring” every assigned job before 5 PM each day. If a job is not progressing satisfactorily, the monitor has constant contact with the technician by cell phone. Technicians who habitually fail to follow the rules; who do not follow the prescribed (casual) dress code; or who habitually create customer complaints about their attitude or workmanship are simply not assigned any new jobs from the job pool. All of our up-line customers are VERY happy with GTech Network’s job delivery and quality of work. 30. Describe the availability of skilled labor necessary to meet your company needs. This is a variable, depending upon the geographical area. In our corporate area of Tidewater Virginia, there is a vast pool of skilled technical labor, in all levels and strata of skills. Many of them are more than willing to travel in performance of their work. In some areas, for instance, New York City, there is slightly more difficulty in obtaining skilled labor, but skilled labor additions or replacements have always been solvable in all of our geographic areas of presence. 31. Describe the type and extent of necessary training that will be required to upgrade the skills of labor and administrative employees and the estimated cost. (You may be eligible to receive financial assistance for skills training from SBA. Your BOS can explain.) All new employees and independent contractors who are employed by GTech Networks are trained extensively at GTech’s expense before they are allowed to perform work for a customer. This usually involves about a week of textbook training and certification test taking, followed by another week of progress on the job training. Day 1 New hire observes the trainer the first day on the job Day 2 and 3 Trainer guides the new hire through all of the required tasks (such as updating ETA, Picking up needed parts, reshipping removed parts, and closing out jobs on line). Day 4 Trainer observes and evaluates the new hire’s performance. The training signifies in writing that the new hire has successfully completed training and accomplished training objectives. Day 5 Conclude in-the-field training. The new hire is terminated if he/she is not performing satisfactorily, demonstrate poor customers skills or otherwise not fully functional. Estimated cost per subcontractor: $1000.00 Administrative employees each require a different skill set for their basic training. Since everyone SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 13 is cross-trained, they must learn at least some of each task. This is usually accomplished using on-the-job training with a paid consultant, a contracted agency, or by bringing an independent contractor out of the field and paying him/her per day, in lieu of their normal (per job) compensation plan. Estimated cost for remaining Michael Garcia training:$1280.00. Estimated cost for replacement office/business manager training:$3,300. Estimated cost for 8a accounting practices upgrade training: $7280.00. 32. Number of Employees: Full-Time __3______________; Part-Time ____1_________ Number of Independent Subcontractors: 44 Number of Consultants: 3 SECTION X - FINANCIAL PLAN/DATA 33. Describe the company's sales and profit trends. The sales and profit trends are fairly flat, with periodic “step” increases, as new markets and/or additional technicians are added. Year-to-year, the profit trend has been steadily upward (except for one year, with extraordinary expenses being written off). Typically, each year has seen about $100,000 increase in gross sales, with a 10%, or slightly less, increase in net profits. 34. Outline your strategy and timing for obtaining additional capital for expansion and/or to meet current needs. GTech Networks has reached a no-growth plateau because of current funding needs. Since the company is privately funded, there is no room for growth, especially in the typical government contracting environment where net-30, to net-90 are typical payment patterns. The owner of GTech Networks, being a small, Hispanic-owned business has been unable to obtain a line of credit on his own, in spite of a clear credit record and virtually no short term or long term debt. 35. Explain the assumptions used in the development of your two year projected operating statement and cash flow projection in items 45 and 46. We are assuming that our current projected growth to add 30 technicians for the NMCI project will tax our ability to manage growth, for the first year. This assumption leads to a projection of flat th growth to that level for the first year. It is assumed that by the end of the 4 quarter of government contracting we will be ready to begin a measured growth pattern, adding at least 4 more geographic locations (in each of the major military complex areas), with staffing increasing to support those four additional locations. Since this year is projected to be a growth year, profit is projected to be kept flat. 36. If you have a bank line of credit, provide name of bank, about of line, amount owed, amount available, and how secured. This item is in progress, with no successes to report at this time. GTech Networks is currently actively seeking an SBA-guaranteed line-of-credit of $180,000. 37. Explain any debt and its purpose that the company and/or the owner has guaranteed on behalf of others, and include a copy of the documents creating the guarantee. The owner has guaranteed no debt, other than that reported directly for GTech Networks. SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 14 GTech networks currently has no long-term debt. GTech networks currently has the following short-term, business-related debt: John Caldwell / Joyce Riggins-Schaffer - $18,981.42. This was a recent operating capitol loan. 38. Describe your method of financial accounting (cash or accrual); how quarterly and annual financial statements are prepared (in-house or outside independent accountant). Note if accounting system is manual or computerized. GTech Networks currently uses cash accounting. Quarterly statements are generated in-house. Annual statements are generated in house, but audited by our contracted year-round accounting firm. 39. Explain all abnormal, nonrecurring, and unusual items on the most recent fiscal yearend financial statement. Nothing to report as abnormal, nonrecurring, or unusual. 40. Provide details on all outstanding company loans to officers, directors, stockholders, and employees (name, purpose, original loan amount, current balance, terms and conditions, collateral, interest rate, and date of loan(s). Nothing. GTech Networks has no outstanding loans to any officer, director, stockholder, or employee. 41. Describe any outstanding contingent liabilities, warranties, litigation, claims, etc. Nothing. GTech Networks has no outstanding contingent liabilities, warranties, litigation, claims, etc 42. Describe any delinquent company state or federal payroll and income taxes (amount due, period of delinquency, and payment agreements). Nothing 43. If construction or other type of company requiring bonding, describe your company's current bonding capacity (single job or aggregate) and source. Indicate if source is corporate or individual surety. If individual surety, indicate if surety has ever been accepted by a federal agency on a government contract. Indicate if you are required to have third party indemnification on corporate bonds or an SBA guarantee. GTech Networks is currently not bonded. If future government projects, obtained under the 8a program require bonding, GTech Networks will probably require the assistance of the 8a program to obtain the needed bonding. 44. Schedule of Compensation of Officers & Directors. Name Edwin Garcia Title President % Ownership 100% Annual Salary * * On an average Mr. Garcia gets roughly 4000.00 per month in distributions But he doesn’t always get this. He doesn’t receive a salary, his income is the net income for the company (LLC corporation). SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 15 45. Provide below a projected operating statement for the next two company fiscal years. Projected Operating Statement Calendar Year 2004 Net Sales 8(a) non-8(a) Gov't Commercial TOTAL SALES 0 0 750,000 750,000 250,000 100,000 850,000 1,200,000 GTech Networks, LLC Calendar Year 2005 Cost of Goods Sold Material Purchases Direct Labor Subcontractors Other Direct Costs GROSS PROFIT n/a None (See Variable Expenses) 23,000 6000 721,000 n/a None 20,000 12,000 1,168,000 Variable Expenses Salaries-Officers Gross Wages Welfare & Pension Repairs and Maintenance Auto and Truck Bad Debts Administrative Advertising Operating, Supplies, & Other TOTAL VARIABLE EXPENSES 48,000 72,000 0 2,000 1,800 0 70,720 500.00 6,000 65,000 180,000 50,000 10,000 10,000 5,000 101,920 5,000 12,000 201,020 438,920 Fixed Expenses Rent Utilities Insurance Taxes & Licenses Interest Depreciation TOTAL FIXED EXPENSES NET PROFIT (before income taxes) 15,840 6,000 1680 1,500 180.00 1,920 3800.00 708,390.00 17,424 7,000 1,848 2,000 ???? 5,000 ???? ???? SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 16 46. Estimate below cash flow projections for a twelve-month period for the applicant's next full fiscal year. Indicate the year and the beginning month. Cash Flow Projection GTech Networks, LLC (Name of Business) Year _August 2004/2005__ Months 3 4 5 Receipts Cash on hand (Beginning) Receipts-Sales Other Receipts Total Disbursement Purchases Gross Wages Payroll Exp. (taxes, ect.) Outside Svcs. Accounting & Legal Rent Utilities & Telephone Insurance Taxes (real est.) (etc.) Interest Repairs & Maint. Auto, Trucks & Travel Equipment Purchases Loan Repayments Other Cash Payments Specify Total Paid Out Cash Balance (end of month) 1 6891 29779 0 36670 2 6 7 8 9 10 0 6000 0 70 1500 1320 2000 0 0 0 0 0 500 2197 0 13587 23083 47. Report of Jobs in Progress GTech Networks, LLC (Name of Business) SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 17 Job # Ongoing Ongoing Rollout GTY2K10047 GTY2K10048 GTY2K10049 Project (Over/Under) Name Equant Qualxserv McDonalds Pizza Hut Sprint US Army Server Reconfiguration Effective Date: Total Payments Contract Amt. 300,000 800,000 10,790 1,755 1,668 2,720 July 2002 % Amount Amount Amount Est. Compl. Completed Earned Billed 50% 50% 50% 100% 100% 100% 164,000 337,024 10,790 1755 1668.00 1360.00 164,000 337,024 8580 1,755 1,668 2,720 Billed 0 0 0 0 0 0 Received 164,000 337,024 2210 1,112 0 0 Du 0 0 6,3 64 1,6 2,7 GTY2K10050 US Transportation 480 Security Administration Bayer Diagnostic 540 100% 480.00 0 0 0 0 GTY2K10051 0% 0 0 0 0 0 *Equant and Qualxserv are ongoing projects and are reported per the annual expected contract amount, with 50% of the year’s expected income realized. This project will continue in 2002, and the out-years. 48. Schedule of Notes and Loans Payable To Whom Payable Original Amount Balance Interest Maturity Rate Date 10% 4/26/03 Monthly Payment 2197.90 Secu John Caldwell / Joyce Riggins / Schaffer 25,000.00 18,981 Date of this Schedule ______5/26/02________ Signa SECTION XI - CONTRACT SUPPORT TARGETS 49. Forcast the aggregate dollar value of contracts to be sought under the 8(a) program and non-8(a) competitive basis for the next program year and the succeeding program year. The forcast should be realistic and based on your management, technical, and financial capability. Keep in mind that your company cannot rely totally on 8(a) contract support . Program Year 8(a) Support Non 8(a) Support Total Support Program Year 50. Identify the type of 8(a) contract opportunities being sought by description and corresponding Standard Industrial Classification (SIC) Code. This will constitute your request for approval of SIC codes in which you are seeking 8(a) contract support. You should request approval of only those SIC codes for which you have current capability and which are a logical progression of your primary industry classification. As you SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 18 develop new capability, you may request approval of additional SIC codes. Your BOS may question or require documentation of capability in certain SIC codes outside of your primary industry classification. Description of Products/Services Computer Repair and Maintenance Description of Products/Services Network Systems Integration, Computer Computer Repair and Maintenance Computer Consulting Computer Repair Computer Programming Services Primary SIC Code 7378 Secondary SIC Codes 7373 7378 7379 8243 7371 51. Describe any assistance your company may need from SBA during the next 12 months, other than 8(a) contract support, to help achieve its business development objectives, i.e., 8(a) business loan, advance payments to perform on 8(a) contracts, surety bond exemption, counseling in specific areas, loan packaging, training in specific areas, etc. We are currently attempting to obtain an $180,000 line of credit, which we feel we’ll need to field 30 techs in a government environment. The owner has already attempted pre 8a to obtain a line of credit, and will be revisiting the SBA approved lending institutions in this area. We may need direct assistance. We need a minimum of two seats for training in 8a and SBA procedures and in marketing and proposal writing and management. We will need additional marketing and proposal writing training, sometime prior to graduation from the 8a program. 52. Describe any other information which you feel is pertinent to understanding your company's past, present, and projected operations. GTech Networks has been successfully operating in the lowest labor and lowest profit margin business in the technical field. We have grown, maintained financial stability, and have a large number of satisfied customers. This will be Mr. Garcia’s first venture into the government procurement arena. We feel that we have what it takes to be a superior player in any technical field, but we lack the “prior credentials” that are normally expected as a ticket of entry. ____________________________________________________________________________ 1. Signature of preparer if other than 8(a) Firm Print or type name of preparer 2. If 8(a) Firm is Sole Proprietor, Sign Below ________________________________________________________________ By: Date 3. If 8(a) Firm is partnership, all Partners Sign Below SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 19 (n/a) By: Date 4. If 8(a) Firm is Corporation, Affix Seal Corporate Seal By:______________________________________________________________ President's Signature Please Note: The estimated burden for completing this form is 10 hours per response. You are not required to respond any collection of information unless it displays a currently valid OMB approval number. Comments on the burden should be sent to U.S. Small Business Administration, Chief, AIB, 409 3RD St., S.W., Washington D.C. 20416 and Desk Officer for the Small Business Administration, Office of Management and Budget, New Executive Office Building, Room 10202, Washington, D.C. 20503. OMB Approval (3245-0015) PLEASE DO NOT SEND FORMS TO OMB. For SBA's use in determining burden, please state amount of time necessary to complete this business plan. ______40__Hour __0_______minutes SBA Form 1010C (7/01) Previous Edition is Obsolete This form was electronically produced by Elite Federal Forms, Inc. Page 20