1. HomeschoolCatalyst
BusinessPlan
January2012
Homeschool Catalyst
7230 Cedarwood Place
Highland, CA 92346
Email: info@homeschoolcatalyst.com
Website: www.homeschoolcatlayst.com
Telephone: 909-907-1772
CONFIDENTIAL
This document is confidential and may not be revealed, reproduced or disclosed in any
way without prior written consent from Homeschool Catalyst.

2. Table of Contents
Executive Summary………………………………………………………….......... 3
Business Description…………………………………………………………...…... 4
Overview………………………………………………………………………
Mission………………………………………………………………………..
Goals and Objectives………………………………………………………….
4
4
5
Industry Analysis………………………………………………………………....... 6
Overview…………………….………………………………...………………
Opportunities ……………………………………………...………….………
Threats…………………………………………….…………….……….……
Summary………………………………………………………………………
6
7
8
8
Marketing Strategy…………………………………………………………............ 9
Overview…………………….………………………………...………………
Target Market…………………..……………………………………………..
Products Offered………………………………………………………………
Promotional Tools………………………………………………………….…
Budget Details………………………………………………...………………
Key Competitors………………………………………………………………
Summary………………………………………………………………………
9
9
10
12
13
14
16
Organization Plan……………………………………………………………...…... 17
Owners’ Background………………………………………………………….
Key Mentors..…………………………………………………………….…...
Outside Resources...………………………...………………………………...
17
18
18
Financial Projections…………………………………………………………..…... 19
Key Assumptions……………………………………………………………...
Financial Projections………...(See Excel Spreadsheet HSC Financial Projections.xls)
19
Appendix A……………………………………………………………………..…... 20
Survey Results………………………………………………………………... 20
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3. - 3 -

4. Executive Summary
Homeschool Catalyst (HSC) is a home-based family-run company currently in start-up
phase and is the brain-child of Jamil and Jonell Alvi. Homeschool Catalyst is a premium
online subscription service that provides tools to home educators for automating the
organization of homeschool activities and resources. It’s a digital day-planner, automated
lesson organizer, record keeper, and resource database customized specifically for
homeschoolers.
HSC will give homeschooling parents the confidence to succeed in the difficult and time-
consuming task of educating their children outside of the traditional school system.
Consider that for each student, a homeschool parent must schedule a minimum of six
subjects across a 36-week year, record attendance and grades for each subject, and track
field trips, co-ops, sports practice, music lessons, park days and more. Add the fact that
over 60% of homeschool families have three or more children, and the magnitude of the
organization required becomes apparent. HSC will guide its subscribers through the
planning and scheduling process, and use the benefits of computing to automate lesson
scheduling, record keeping, and resource tracking, saving homeschoolers time and
helping to ensure organizational and educational success.
HSC will create brand recognition for its target market—homeschooling mothers—using
Google AdWords and Facebook Ads, as well as print ads in popular homeschooling
magazines. By creating a pervasive online presence through its website, blog, Facebook
page, and Twitter account, HSC will foster open communication with customers,
maintain a responsive customer support system, and use customer feedback to drive
future product development.
Jamil Alvi is an application architect and project manager at Esri, where he has worked
for more than twenty years. His experience in areas as diverse as technical support,
software development, user interface design, and IT, will provide a solid foundation for
the technical side of HSC. Jonell Alvi has more than five years experience as a software
technical support analyst and technical writer, and over seven years of homeschooling
experience. She previously owned and ran a successful MLM business, and is currently
enrolled in the IYT business program through the Inland Empire Women’s Business
Center (IEWBC). The combined experiences of the owners create a powerful foundation
for establishing and growing a profitable business that fills an important need in the
homeschooling community.
HSC will be self-financed by the owners who will inject $11,000 divided as follows:
Legal and Accounting Fees ($1500), Ads and Promotions ($6000) and Working Capital
($3500). HSC is forecast to break even in the first six months following product launch
(May 2012) and to generate $68,303 in revenue and $37,724 in profit by the end of the
first year after launch (May, 2013).
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5. Business Description
Overview
Homeschool Catalyst (HSC) is a a home-based Micro-ISV1
that will be established in
2012 by the owners, Jonell and Jamil Alvi, as a Limited Liability Company (taxed as an S
Corporation). HSC is located at 7230 Cedarwood Place, Highland, CA 92346.
Product
Homeschool Catalyst is an online software product currently being designed and
developed by the owners using the Software as a Service (SaaS) business model.2
Customers will pay a monthly subscription to access the product online from any
Internet-enabled platform (desktop, laptop, tablet, mobile phone). The product will
provide several tools in a set of modules that homeschoolers can use to plan and schedule
lessons, record grades and credit hours, and track activities and resources for multiple
students across different grade levels and school years.
The product is currently under development and is being shaped by feedback from
homeschoolers, the owners’ personal experience, and research on existing offerings in the
homeschooling market. While user needs and functional requirements have been
determined and the basic groundwork of the product has been created, HSC is currently
working on specific details of implementation and developing use cases.3
A more detailed
description of product features is available in the Marketing Strategy section.
Mission:
HSC values openness and transparency with those who may use its work, driving
development through customer feedback and nurturing relationships through responsive
customer service. HSC exists to delight customers, create innovative products, and build
a sustainable business.
1
An Independent Software Vendor with fewer than 10 software developers. en.wikipedia.org/wiki/Micro_ISV
2
A software delivery model in which software and its associated data are hosted centrally (typically in the (Internet)
cloud) and are accessed through a web browser over the Internet. en.wikipedia.org/wiki/Software_as_a_service
3
A list of steps defining interactions between a role or actor and a system to achieve a goal.
www.en.wikipedia.org/wiki/Use_case
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6. Goals and Objectives
Goal #1: To launch Homeschool Catalyst successfully on May 15th, 2012
Objectives:
1. To build a beta group through HSC’s website, blog, and Facebook page.
2. To create a count-down campaign on Facebook, Twitter, & Google Adwords.
3. To have a beta version available for testing by February 29, 2012
4. To optimize the product by rapidly implementing user requests.
Goal #2: Increase income to $7K / month to allow full-time work on the product.
Objectives:
1. To continue promotions with Facebook Ads and Google Adwords.
2. To post regularly on the HSC blog (bi-monthly), Twitter (daily), and
Facebook page (bi-weekly), driving traffic to the HSC product website.
3. To add features based on user feedback to incrementally improve the product.
4. To retain these customers with excellent customer service.
5. To have at least 400 consistent subscribers by the end of the first year.
Goal #3: To expand on first year success and grow to $30K net income / month.
Objectives:
1. To promote HSC as a vendor and speaker at homeschooling conferences.
2. To create relationships with homeschool curriculum vendors to create
templates that will save even more time planning.
3. To become a vendor for charter schools.
4. To become the standard for reporting to school and state authorities.
5. To reach a global audience by expanding into homeschool-friendly countries.
Goal #4: To develop HSC to be sold to or managed by a third party in 7 to 10 years.
Objectives:
1. To create an online community where customers can support each other.
2. To create a document outlining how the systems in the business work
3. To keep accurate and complete financial documents.
4. To create systems and process flows that are easily understood.
5. To outsource customer support, marketing, feature updates, etc. as needed.
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7. Industry Analysis
Overview
Homeschool Catalyst is part of the Software-as-a-Service industry (an outgrowth of the
Application Service Provider Industry, NAICS: 518210). SaaS is a recent development
in the software industry, having been around for just over 10 years.4
In the SaaS business
model, Web-based software is owned, hosted, delivered, and managed on the Internet in
the cloud 5
by the provider (in this case, HSC), rather than by the subscriber, who pays a
subscription fee to “rent” access to the application.
According to Gartner, Inc.6
worldwide SaaS revenue reached $12.1 billion in 2011, a
20.7 percent increase from 2010 revenue of $10 billion.7
The US share of revenues in
2011 is $7.7-billion. International Data Corporation (IDC)8
claims the industry will jump
from $13.1 billion in global revenues in 2009 to $40.5 billion by 2014, a compound
annual growth rate of 25.3 percent.9
HSC belongs to a much smaller segment of the SaaS industry: companies offering
homeschool planning software. The oldest companies in this industry were established
less than ten years ago, so there are few statistics available. However, HSC has done
extensive independent research to grasp the opportunities and threats it faces as it
prepares to launch into this industry.
Validating HSC’s Assumptions
HSC turned to many sources to determine the viability of its proposed product, including
industry data and research, census data, and primary research based on questionnaires.
Below are some of the findings:
Homeschoolers are pressed for time.
HSC conducted a survey of homeschoolers and determined that of the respondents, only
3% use an all-in-one curriculum which covers all subjects and scheduling, while 97% use
different curricula for each subject or create their own plans and schedules. (Table 1,
Appendix A). The U.S. Census Bureau reports that 58% of homeschooling families have
two parents in the workforce, and 60% have three or more children.10
Based on these
findings, HSC assumes that a majority of homeschooling families create their own
schedules and are pressed for time.
4
SaaS Coming of Age www.peer1.com/resources/questions/56/
5
Cloud computing: www.en.wikipedia.org/wiki/Cloud_computing
6
Gartner, Inc. (NYSE: IT) is the world's leading IT research and advisory company. gartner.com/technology/about.jsp
7
gartner.com/it/page.jsp?id=1739214&M=6e0e6b7e-2439-4289-b697-863578323245
8
IDC is a global provider of market intelligence for the IT market. idc.com/about/about.jsp?t=1321997469278
9
www.flexerasoftware.com/solutions/challenge/growing-saas-revenues.htm
10
U.S. Census Bureau, Students Who Are Homeschooled by Selected Characteristics: 2007
www.census.gov/compendia/statab/2012/tables/12s0240.pdf
- 7 -

8. Homeschool Catalyst will actually save homeschoolers time.
HSC’s initial research found that for many homeschoolers, entering lesson data was a
barrier to adopting a software system for planning because it took too much time. HSC
will mitigate this concern with pre-loaded lesson lists and tables of contents from popular
curricula. Customers can use these templates to create a rough schedule with little or no
data entry required. When HSC asked homeschoolers if they would like the option to
have Homeschool Catalyst suggest a schedule, 80% said such a feature would make
planning easier and would save them time. (Table 2, Appendix A)
Homeschoolers plan out their schedules at least a few weeks in advance.
HSC’s survey revealed that more than 60% of respondents who are willing to use
software plan several weeks to a year in advance: 41% reported that they plan the whole
school year at a time; 20% reported they plan one term at a time; and 20% reported that
they plan a month at a time. (Table 3, Appendix A)
Opportunities
The SaaS business model.
There are few homeschool planning software programs that take full advantage of the
SaaS business model (see the Key Competitors section). An existing company that
wanted to switch from the software download model to SaaS would have to design,
program, beta test, and launch a new product, making it easier for new entrants to the
industry like HSC to compete with established companies.
Access.
HSC’s customers will be able to access their data from any Internet enabled device;
desktop, laptop, tablet, or phone. They will be able to share educational experiences with
loved ones who live far away, a parent who travels for business or is in the military. HSC
will be able to communicate daily and weekly tasks (and reminders) to older students via
their mobile devices. A downloaded program cannot offer these benefits.
Unique product feature—modeling schedules.
At present, it appears no existing homeschool planning application offers the ability to
model a schedule. HSC will use the power of the computer to automatically assign dates
to individual lessons, chapters, music classes, sports, and other activities according
specific criteria chosen by the user. Start dates, vacations, and end dates can be entered
and changed, allowing customers to experiment with different scheduling scenarios. HSC
sees an opportunity to offer the homeschool market a unique productivity tool that isn’t
currently available. See the Products Offered section for more information about the
Scheduling Module.
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9. Threats
Free SaaS planners.
HSC’s research unveiled two free online homeschool planning websites that use the SaaS
business model.11
Because they are free, they could pose a threat by attracting potential
HSC customers. Both sites use an advertising business model to generate revenue, selling
advertising spots on the pages of their websites. Free sites must commit resources to
selling advertising to turn a profit, resources which could be used to improve the product
or increase customer loyalty. HSC’s subscription model, in which revenue flows from
monthly subscription dues, rather than from third-party advertisers, will allow HSC to
focus on creating a positive customer experience. And while some customers will never
pay for what they can get for free, others will pay to avoid advertising.
New entrants to the industry.
New competitors can enter the industry at any time. However, developing a SaaS
application takes months of designing, developing, and testing before launch and before
income is generated. Any competitor would need to rely on a second income or venture
capital for financial support during this phase. HSC is relying on income from a day job
during its development phase. Venture-backed startups require vast numbers of users to
justify a good return on investment, and while the homeschool industry is expanding and
becoming more main stream, it is likely too obscure for such large-scale investors. At the
current time, the industry is large enough for a small start-up like HSC to create value,
but not yet large enough to be the target of venture-funded startups.
Security concerns.
As SaaS applications become mainstream, consumers are becoming increasingly
comfortable storing their data online (consider the popularity of Gmail and Flickr).
HSC will provide security through data encryption and frequent backups to mitigate
customer concerns. Information about data security will be provided on the sign-up page
as well as security badges such as VeriSign and McAfee.
Summary
Based on extensive industry research and customer surveys, HSC believes there is
opportunity in the homeschool planning application industry. Through careful planning,
progress tracking, and results analysis, HSC has the capability to overcome potential
threats, penetrate the market, obtain and maintain subscribers, and become profitable.
11
Homeschool Skedtrack www.homeschoolskedtrack.com and HomeSchool Inc. www.home-school-inc.com
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10. Marketing Strategy
Overview
Homeschool Catalyst (HSC) will concentrate on building brand recognition to attract new
customers to the website, and will work to convert those visitors into subscribers by
developing a strong image of openness and a shared journey. HSC recognizes the effect
of the economy and competition on customer acquisition so will focus on differentiation,
customer relations, brand recognition, and continuous product improvement based on
customer feedback to attract and maintain subscribers.
Target Market
The general market for Homeschool Catalyst consists of parents who educate their
school-aged children outside the traditional public school setting. The size of the
homeschool market is estimated to be between 1.5 and 2.35 million students, and
growing at a rate of 2% to 8 % per year. 12
According to census data, homeschool families
are typically married (89%); more than half have a median income greater than 50K
(60%); and just over half of homeschool parents have a Bachelor’s degree or higher
(50.9%).13
The National Center for Education Statistics describes the “typical”
homeschooling family “….with a stay-at-home mom, or mother-educator. It consists of a
two-parent household with three or more children, in which the parents are highly
educated and the father is the breadwinner.” 14
Based on this data, HSC’s target market is stay-at-home and work-at-home married
mothers between the ages of 25 and 55 who are homeschooling their children and who
have a degree or higher education and may have once worked in a professional field and
would be familiar with digital productivity and organizing software.
HSC is an online product, so potential reach is limited only by Internet availability.
However, because the majority of homeschoolers reside in the US, initial online and print
marketing efforts will concentrate on homeschoolers in the United States. After the initial
start-up phase, HSC will consider focusing on broader markets in various countries with
large populations of homeschoolers—namely Australia, Canada, New Zealand, and the
United Kingdom.15
HSC plans to concentrate real-world marketing efforts in the Southern
California area—this is where the company is based and the area has a relatively high
concentration of homeschoolers.
12
www.census.gov/compendia/statab/cats/education.html
13
www.census.gov/compendia/statab/cats/education.html
14
Homeschooling in the United States: 1999 nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2001033
15
en.wikipedia.org/wiki/Homeschooling_international_status_and_statistics#Homeschooling_status_tables
- 10 -

11. Product Offered
The software program Homeschool Catalyst will be offered online as a monthly
subscription service. The Scheduling Module will be the heart of the program and
homeschoolers will use it to automate their lesson scheduling. First they will enter the
number and/or names of lessons or chapters from their curriculum; a start date; an end
date; the number of lessons per week; holidays; and vacations. The module will then
calculate the schedule, assigning each lesson to a date based on the criteria provided. For
example, if a curriculum with 100 lessons is begun on September 1st
, can it be completed
by June 1st
if lessons are held four days per week, allowing for traditional holidays and
two weeks of vacation? To find out how the end date would be effected by three weeks of
vacation is a simple matter of changing the vacation dates and running the module again
to compare. Tables of contents and lesson lists from popular homeschool curricula will be
available in the system, saving the customer time that would otherwise be spent on data
entry. The Scheduling Module will also automatically schedule recurring activities such
as classes, sports practices, field trips, tutoring sessions, co-op meetings and more. As the
school year progresses, the Scheduling Module will automatically move lessons to a
later date if a lesson is missed, or move subsequent lessons forward if a lesson is skipped.
The Visualization Module will display the daily, weekly, biweekly, monthly, term, or
yearly schedule, allowing colors to be assigned to different subjects and students, and
will display the daily number of lessons to avoid over-scheduling. The Recording
Module will track accomplishments by providing a place to record lessons completed,
books read, grades or marks earned, credit hours completed, etc. Finally, the Resource
Module will be a customer-created database for tracking resources such as books, texts,
science equipment, craft supplies, school supplies, as well as digital resources such as e-
books, audiobooks, podcasts, websites, videos, photographs, and software.
Pricing
Homeschool Catalyst will be offered as a subscription service at $27.97 per month. At
present the market offers no high-end products focusing on customer service,
functionality, development driven by customer feedback, and marketing to the educated
professional homeschooler. HSC intends to fill this niche.
HSC chose to use a value-based pricing strategy, as cost-based pricing is difficult in a
SaaS business model and competitive pricing depends on many competitors offering
similar products, which is not the case for HSC. Putting a value on time saved by
homeschoolers using HSC is difficult, as it is difficult to monetize homeschoolers’ time.
However, there are several non-competing homeschooling services (magazines,
worksheets, online lessons) that charge a similar monthly fee; this is taken as evidence
that homeschoolers are willing to purchase subscription style homeschool products and
services in this price range.
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12. As more features are added to the product, HSC will consider moving to a tiered pricing
system, offering more functionality at higher tiers, but with a basic tier for those to whom
cost is prohibitive. HSC is also considering different payment time frames—monthly,
quarterly, or yearly. Feedback from customers will drive any changes to the pricing.
However, in the beginning, HSC plans to offer a single price.
Benefits to the Customer
Homeschooling parents who are tight for time will be able to use Homeschool Catalyst to
schedule their homeschooling lessons, record their homeschooling activities, and
organize their homeschooling resources. In a survey sent to potential customers, HSC
found that 56% spend up to two hours per week planning, and 31% spend between two
and six hours per week on planning. This amounts to 87% of respondents spending
between 4 and 24 hours per month planning and scheduling their homeschool time.
(Table 4, Appendix A). HSC reduces this planning time by automating the scheduling
and re-scheduling of lessons; by visualizing progress through the curriculum to ensure the
lessons are on track; by organizing all materials in a searchable database; and by
providing a one-stop place to keep track of all records required, including attendance,
credit hours, grades, field trips, books read, classes attended, etc.
By providing a planning and organizing framework for the large endeavor that is
homeschooling, HSC helps homeschooling parents feel confident and professional. By
coming across as competent at this monumental task, customers are more likely to obtain
support and respect from family and the community at large, which in turn leads to a
more successful outcome for the student.
If homeschooling “fails”, the best-case scenario is the student simply returns to school.
In the worst case scenario, the student fails to obtain the education they deserve, and is
unable to reach their potential as they grow older. Homeschooling involves a huge
amount of organization, planning, scheduling, record-keeping, and time. Homeschool
Catalyst will provide a one-stop place to plan, schedule, record, and keep track of
homeschooling activities and resources, saving time otherwise lost by disorganization,
lost books, etc. No parent wishes to give their child a sub-par education. Homeschool
Catalyst will help to prevent a negative homeschooling outcome.
- 12 -

13. Promotional Tools
Online and Real World Marketing Channels
HSC will be an online product, and will focus initial marketing on Facebook Ads and
Google Ads. HSC will use social media marketing tools to help reach customers. HSC
currently has a website (www.homeschoolcatalyst.com), Facebook page
(www.facebook.com/HomeschoolCatalyst), blog (www.homeschoolcatalyst.com/blog),
and Twitter account (www.twitter.com/HSCatalyst). Potential customers can sign-up for
the Homeschool Catalyst e-newsletter via the website or Facebook page. HSC will also
be promoted by the owners with comments on blogs, on Yahoo groups, and on
homeschool forums, to create a visible, online, and approachable presence.
HSC’s real world marketing presence will include a vendor presence at the California
Homeschool Network (CHN) Family Expo in Ontario, CA July 19-22, 2012 and at the
Homeschool Association of California 2012 conference in Sacramento on August 2nd
–
5th
. No information as to costs is available at this time. In addition to conferences, HSC
plans to attend various weekly homeschool park days across Southern California,
bringing laptop and promotional materials along to demonstrate the product.
Print Media
HSC will place print ads in two of the top homeschooling magazines:
Practical Homeschooling Magazine http://www.home-school.com/advertising/phs/ , and
The Old Schoolhouse http://thehomeschoolmagazine.com/. These ads will run in the late-
summer and early fall issues to coincide with the start of the school year.
Homeschool Catalyst Budget Overview
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14. Homeschool Catalyst Budget Details
The advertising budget can be divided into two phases, pre-launch and post-launch.
Launch date is May 15th
, 2012, when Homeschool Catalyst will become available to the
public.
Pre-launch budget
The owners have budgeted $6000 for pre-launch advertising. HSC is planning to release a
beta version of the program for testing on February 29, 2012. Prior to February, HSC will
use $2300 of the budget for logo creation, graphic design, branding consultation fees, and
promotional materials such as business cards and brochures.
Starting in February, HSC will begin advertising with Google Adwords, spending $300
per month ($10 per day) through the end of May. HSC will do the same with Facebook
Ads, again spending $10 per day and $300 per month. This leaves approximately $500
for increased Facebook and Google Adwords marketing in May when HSC launches.
HSC plans to advertise in two of the most popular homeschooling magazines: Practical
Homeschooler, and The Old Schoolhouse Magazine. HSC has a budget of $700 to
advertise in the issues leading up to the start of the 2012-2013 school year.
Post launch Budget
Homeschool Catalyst is scheduled to launch to the public on May 15, 2012. Once
launched, HSC has a monthly budget of $400 for advertising, sales, and marketing, to be
spent based on results of the pre-launch marketing campaigns. Some of these funds will
be added to the $480 per year budgeted for attending conferences. HSC may decide to
inject more cash come August and September to coincide with the beginning of the
school year. This will be determined by the initial subscription rates during the first two
months of business.
Advertising Budget Breakdown
Advertising Calendar and Budget
Pre-Launch Post Launch
Medium Jan Feb Mar Apr May Jun Jul Aug Sep
Logo & Graphic Design $1000
Branding $1000
Promotional Materials $300
Google AdWords $300 $300 $300 $600 $200 $200 $200 $200
Facebook Ads $300 $300 $300 $600 $200 $200 $200 $200
Magazine Ads $600
Conferences $240 $240
Totals $2300 $600 $600 $600 $1100 $400 $640 $640 $400
- 14 -

15. Key Competitors
HSC has identified three key competitors: Homeschool Tracker, Homeschool Skedtrack,
and MyHomeschoolPlan.
1. Homeschool Tracker (parent company: TGHomeSoft)16
Homeschool Tracker is a downloadable software product that costs $49. Based out of
Orlando Florida, Homeschool Tracker is one of the “oldest” homeschool planning
offerings, having been founded in 2003, and is therefore the best known. Homeschool
Tracker has current annual revenues of $340,000 with 20,000 customers worldwide.17
According to Compete.com, Homeschooltracker.com had 1342 unique visitors in the
month of October, 2011.
Strengths
Visibility. Homeschool Tracker is probably the best known, with wide-ranging
advertising and brand awareness both online and in the real world. Its greatest strength is
in its relative longevity in the market. HSC will need to have an aggressive marketing
strategy to gain visibility in the market.
One-time fee. Some customers prefer to pay once for a software product that they can run
locally on their computers. HSC’s subscription model won’t suit everyone, but if there is
demand, HSC has the flexibility to offer a yearly fee in its pricing structure.
Weaknesses
Customer service and access. Homeschool Tracker offers no refunds for its product. It
has no version for the Mac computer, nor a mobile version. HSC can be accessed from all
internet enabled devices, including Macs and mobile phones.
Outdated business model. Homeschool Tracker is sold as a software download, a
business model that is being rapidly overtaken by SaaS. HSC offers a product built with
newer technologies and modern interface design, providing customers with a more
appealing alternative. As the SaaS business model becomes more prevalent in the
homeschooling consumer market, its will slowly shift the market away from the more
traditional software model. HSC’s newer technology and modern interface will provide
customers a more appealing alternative.
16
www.homeschooltracker.com
17
www.anta.com/c/mr0dxxb/tghomesoft-llc
- 15 -

16. 2. Homeschool Skedtrack (Parent company: iRT Web Solutions (sic))18
Unlike Homeschool Tracker, Homeschool Skedtrack is online and uses the SaaS business
model. Based out of Frederick, MD, it was launched in 2007. Unlike HSC, it uses a
revenue model based on donations and advertising; use of the product is free. As of
January 11, 2011, they had 286 followers on Facebook.
Strengths
Access. Because Homeschool Skedtrack uses the SaaS business model, it will run on any
internet enabled device.
Price. Many homeschoolers who use Homeschool Skedtrack love that it is offered for
free.19
Homeschool Catalyst will be offered at $27.97 per month and will focus on
attracting a different market segment—those who prefer less advertising and better
customer service.
Weaknesses
Market share. Homeschool Skedtrack is offered online at their website,
www.homeschoolskedtrack.com. Because the product is accessed through that website,
HSC assumes that the number of unique visitors per month to be an indication of the
number of “customers” using the free product. According to compete.com,
www.homeschoolskedtrack.com had 3657 unique visitors in October of 2011, with an
average of 2325 unique visitors per month for the last calendar year.20
This is a relatively
small market share.
Customer service. Because they must rely on advertising, there is less incentive to offer
quality customer service to those who use their site. Their focus and resources are
diverted from customers to selling advertising.
3. MyHomeschoolPlan21
MyHomeschoolPlan is based in St. Paul Minneapolis, and is more similar to Homeschool
Catalyst than the other two competitors listed. MyHomeSchoolPlan uses the SaaS
business model, offering a paid subscription with three tier choices: $30 annually, $10
quarterly, or $4 monthly. They also offer a 30-day free trial. MyHomeschoolPlan was
launched in July 2009 as a “soft launch”, meaning it was not widely publicized by the
developers, who appear to view their product as a hobby. However, if they decide to
focus on commercializing their product, they have the potential to become a major
competitor.
18
www.homeschoolskedtrack.com
19
According to comments in forums and Yahoo groups.
20
www.siteanalytics.compete.com/homeschoolskedtrack.com/
21
www.myhomeschoolplan.com
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17. Strengths
Price. MyHomeschoolPlan is comparatively cheap. Many homeschoolers will be
attracted by this low cost. HSC decided to price their product at a premium level to
differentiate themselves from MyHomeschoolPlan, and to offer continual upgrades and
better customer service.
Experience. Judging by their websites and blogs, the developers of HomeschoolPlan
appear to be well experienced in web technologies and social media marketing. They use
UserVoice to communicate with users, and Techrigy (now called Alterian SM2) to track
what customers are saying about their product across the Internet. HSC is currently
researching these tools to determine how these might fit into HSC’s marketing strategy.
Weaknesses
Development.. MyHomeschoolPlan’s greatest weakness is that it isn’t being promoted in
any way, and is more of a hobby created for use with the developer’s own children, by
the owners admission.22
MyHomeschoolPlan is not being actively developed, though
customers can pay the inexpensive monthly fee to access the tool. It appears there are no
new features being offered or planned.
Functionality. Because MyHomeschoolPlan is not being actively developed, the
functionality will be limited. Despite these weaknesses, this competitor has the potential
to be a major competitor and HSC will need to watch them closely. HSC will need to
differentiate itself by offering a better interface design, functionality, and customer
service, and to institute a strong advertising push to inform consumers of their choices.
Marketing Summary
To become the market leader in homeschool planning software, HSC will focus on
building brand recognition with online advertisements and social media marketing. HSC
will differentiate itself by using personal experience as homeschoolers to identify with
potential customers and provide excellent customer service.
HSC’s lead developer has more than 23 years of software and web development
experience. HSC’s marketing lead has more than 7 years experience as a homeschooler in
and with the homeschooling community. This potent combination means HSC is in a
unique position to offer the homeschool market a product well-suited to their needs.
However, strong communication with customers is required to obtain feedback that will
drive HSC’s development. Between the owner’s experience and strong customer
relations, HSC is in a position to provide a top-notch product and create a sustainable and
profitable business.
22
www.blog.myhomeschoolplan.com/2009/06/myhomeschoolplan-update/
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18. Organization Plan
Jamil Alvi, Co-Founder
Jamil Alvi is currently working as an Application Architect and Project Manager at Esri
located in Redlands, CA. He has 23 years of experience in many areas of software
development and management, including technical support, customer service, software
design and engineering, user interface design, benchmarking, management, and IT. For
the last two years he has been studying entrepreneurship in his off hours, reading books
and blogs, watching videos, researching technologies, and learning all he can.
Jamil Alvi will be responsible for overseeing all development and technical operations of
the company, including writing code, developing and maintaining the website,
researching new technologies, and implementing new features.
Jonell Alvi, Co-Founder
Jonell Alvi is currently enrolled in the “It’s Your Time” program offered by Citibank
through the Inland Empire Women’s Business Association. She is receiving training in
managing finances, customer relations, business plan writing, marketing, and general
entrepreneurial topics.
Jonell Alvi is currently homeschooling her two children. She has seven years of
experience in homeschooling, and has been involved in running a successful homeschool
co-op and an online homeschool group. Because she belongs to HSC’s target market, she
has a direct and personal understanding of the needs of potential and actual customers,
and legitimate means for developing strong communications with homeschoolers and
potential customers. Her experience aids in establishing HSC’s credibility with the
homeschool market.
From 2007 - 2008, Jonell ran a Pampered Chef home-based business. Pampered Chef is a
multi-level marketing company that helps Consultants sell kitchen products through in-
home cooking shows. As a Pampered Chef Consultant, Jonell gained experience running
her own business—cold calling, sales, customer relations, marketing, and time
management. In 2008, Jonell attended the Pampered Chef National Conference in
Chicago, where she learned even more about running a business. She quit Pampered Chef
to start HSC.
Jonell Alvi will be responsible for overseeing the accounting, sales and marketing, and
customer service aspects of HSC.
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19. Key Mentors
At this time, HSC is obtaining mentoring and guidance from experts through the Inland
Empire Women’s Business Center. HSC has consulted with Kim Rohn, (Legal Issues),
Barry Davis (Marketing, Ecommerce, SEO Optimization), Eydie Stumpf (Social Media
Marketing) and Nicole Kinney (General Business and Entrepreneurship). HSC has
continued to meet with Barry Davis and will likely continue to consult with him in future.
HSC’s owners follow several blogs to find encouragement and knowledge in the areas of
entrepreneurship, technical issues, industry news, and small business ownership. These
include: Software by Rob (Lessons Learned by a Solo Entrepreneur – Rob Walling),23
Michelle Shaeffer (Social Media Marketing and Homeschooler),24
Unicorn Free
(thoroughly non-magical advice for creating & selling your own products—Amy Hoy),25
Startup Lessons Learned (The Lean Startup – How Today’s Entrepreneurs Use
Continuous Innovation to Create Radically Successful Businesses—Eric Reis).26
Outside Resources
Accounting: HSC will outsource accounting needs to a CPA firm and is currently on the
hunt for a CPA experienced with SaaS businesses.
Attorney: HSC will use Jeremy Aber of Aber Law Firm, an attorney specializing in
Software, SaaS, and IT Companies.27
Branding consulting: HSC will consult with Liz Goodgold for advice on branding.
Logo Design: HSC is consulting with Wendy Sue Hunt.
Strategic Partners: After launch, HSC is planning to partner with curriculum vendors to
develop a database of pre-loaded tables of contents from popular curricula. Once
established in the marketplace, HSC will apply to become a vendor for charter schools
with homeschool programs, so that parents who homeschool through the charter school
would have HSC available to use at no cost, while HSC will get paid by the charter
school.
23
www.softwarebyrob.com
24
www.michelleshaeffer.com
25
www.unicornfree.com
26
www.startuplessonslearned.com
27
www.aberlawfirm.com
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20. Financial Projections
The financial projections for Homeschool Catalyst are included in the Excel spreadsheet
HSC – Financial Projections.xls.
Total Project Cost: $11,000
Owner’s Contribution: $11,000
Amount Financed: 0
Key Assumptions:
When researching the financial projections, HSC learned that the accounting for SaaS
projects is quite different than that of traditional software products.
“A traditional software vendor makes and sells perpetual license copies,
whereas a SaaS business makes and sells ongoing service subscriptions.
Each new SaaS customer brings a new thread of recurring revenue and
cost which are woven into the larger tapestry of customers to create the
total SaaS recurring revenue stream and associated SaaS cost of service.
This fundamental shift in the unit of value from copies to customers
turns the economics of licensed software upside down, and is still an
elusive financial concept for the industry when evaluating SaaS costs,
profitability, business valuation and capital efficiency.” 28
Bearing this in mind, HSC makes the following points and assumptions:
Salaries and Wages (Sheet 2):
Salaries: Once HSC breaks even, the owners will take a salary that is 10% of net income.
The Salaries and Wages sheet does not reflect this due to the way it does calculations, so
HSC assumed a $400 per month salary split between the owners as a starting point.
Fixed Operating Expenses (Sheet 3)
1. Hosting Fees are fixed until HSC has more than 2000 customers, or more than
200 customers accessing the servers simultaneously (as per Amazon Web
Services Cloud fees).
2. Legal and Professional Fees includes attorney and accounting costs.
3. Online payment processing is a variable cost accounted for on sheet 4 as part of
the Variable Cost Per Unit.
28
SaaS Business Model: On the Cloud, The Customer is King chaotic-flow.com/saas-business-model-on-the-cloud-
the-customer-is-king/
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21. Projected Sales Forecast assumptions (Sheet 4):
1. The number of “sales” for each month represents a combination of new
subscriptions and recurring subscriptions. For example, in the first month of
business (May), HSC assumes four subscriptions will be sold, and these will all
be new subscriptions. In June, the sheet indicates 8 subscriptions; however, four
of these are new and the other four represent recurring income from the four
subscriptions acquired in May. Thus the difference between the number of “sales”
in one month and the number of sales in the previous month represents the new
subscribers, and the remaining are recurring payments from existing subscribers.
2. The Variable Cost per Unit is assumed to be the Cost of Goods Sold (COGS) also
called direct costs. HSC’s research shows average Gross Margin for SaaS
businesses fall in the region of 95% - 97%.29
HSC assumed an average variable
cost of 5%, based on a Gross Margin of 95%.
3. The Overhead Exp. Allocation was automatically set to 50% by the sheet. HSC
used the following formula to calculate an appropriate percentage (17%):30
Overhead Expense Allocation = monthly direct costs / average monthly sales * 100
Overhead Expense Allocation = $985 / $5692 * 100
Overhead Expense Allocation = 17%
Average Monthly Sales were determined by taking the total income from sales in
the first year ($68,303) and dividing by 12 to get $5692
This percentage (17%) is used in cell E22 to calculate Overhead Expenses by
multiplying .17 by the yearly total indirect costs plus the yearly total salaries.
Note: this formula came with the spreadsheet.
This works out to: $11,820 + $5909 * .17 = $3,014
4. HSC assumed an increased rate of subscriptions in July, August, and September
as homeschoolers prepare for the upcoming school year, and a similar, smaller
jump in April and May.
5. HSC does not show unsubscribes—the total number of subscription payments for
each month is assumed to represent the net number of subscription payments.
6. HSC conservatively estimated 2000 subscribers by the end of our third year based
on data from HSC’s closest competitor (MyHomeschoolPlan) which was able to
obtain more than 330 customers in 6 months with no marketing, and Homeschool
Tracker which has over 20,000 customers. See the competitors section of the
Marketing Strategy section for more information.
Appendix A: Survey Results
29
Gross Margin and SaaS www.startvi.com/2010/08/gross-margin-and-saas/
30
How Do I Calculate Overhead Costs? www.smallbusiness.chron.com/calculate-overhead-costs-3481.html
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22. HSC used Wufoo to create several online questionnaires which were sent out to members
of its e-newsletter group. Below are some of the responses.
Table 1: Types of curricula preferred by homeschoolers.
Table 2: Levels of automation preferred by homeschoolers.
Table 3: Time frame preferences for homeschoolers planning their school year.
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23. Table 4: Amount of time homeschoolers spend planning their schedules.
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