Information TechnologyFinancial plan, business plan, financial model and financial analysis templates in Excel related to financial modeling and business models in the Information Technology (IT) sector such as Software as a Service (SaaS), Mobile Apps, eCommerce, etc.
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Information Technology Industry
In this generation where the internet and technology are on top of the list of demands, starting a business or having a business in Information Technology Industry is a very attractive opportunity. Especially now that computers and information systems are essential parts of every business today, it is no wonder the information technology industry is booming. The necessity of these businesses is one of its proof of potential profitability.
The IT industry, as we know, usually includes businesses or entities which either develop, maintain, or operate the information technology systems. To have a better look in a broad sense, it is categorized in the following segments:
- Product Companies – Under this segment are businesses that work on products which provides a specific use for the customers. E.g. software, hardware, or hybrid.
- Services Companies – These companies are ones who provide IT services to their customers, from composite services to product development services. They usually offer a wide range of services such as network maintenance, system support, application development, business process outsourcing (BPO)
- In-house IT Departments – The core business of this segment is wholly focused on providing IT services which are more complex. As its name implies, all services are done in-house, thus, this is a special segment. E.g. IT department or section of a company.
Information technology (IT) industry has become one of the most robust industries all over the world. Increasing productivity, development, and also helping the economy grow even more. There is a wide variety of services under the range of information technology industry. These services are such as follows:
- Systems Architecture
- Database design and development
- Application Development
- Maintenance and hosting
- Operational support
- Security services
Serving as a medium of e-governance and medium of skill formation, assuring the accessibility to information, just like how the media industry works, improving operational efficiency and adds to transparency. Hence, helping the economy achieve a rapid pace of economic growth.
But, it is undeniable that the IT industry is one of the youngest industries that exists, thus it couldn’t be helped that there are several challenges the businesses in this industry are facing, such as:
- Global Competition: With today’s technology, it is no longer that challenging to connect across the globe, but this also means that the competition range is bigger and wider than the usual local competition. Thus, if you’re planning to start your own IT business, there are many things to consider first before you get drowned in the middle of the tough competition.
- Rate of Obsolescence: With the rate on how fast technology is advancing, it is no wonder why the rate of obsolescence goes fast too. Especially in the IT industry, where it constantly re-invents itself and its technical infrastructure. E.g. new software systems or hardware specifications always gets developed every year.
- Disruption of Business Models: Along with the dependence of the convenience the IT industry has brought to every user, it couldn’t be helped that there are many business models, especially the traditional ones, has been disrupted greatly. E.g. physical bookstores replaced by Amazon eBooks, transportation services like taxis replaced by ride-sharing using Uber.
- Quality and Security: As more people are using the internet and other online operations, the issue of quality and security have become even more prominent. It is critical to ensure that both aren’t compromised, otherwise, there will be a huge consequence. E.g. virus attacks, hacking problems, software malfunctions, and bugs, etc.
There are still many more challenges that the IT industry businesses are facing and are trying to resolve. That’s why before starting a business in the IT industry, proper preparation is needed as well as a good working plan.
How to Start a Business in Information Technology
If you’re thinking of starting your very own business in the information technology sector, there are certain things that you need to do beforehand. A successful Information Technology company requires you to look for an underserved market or creating a new technology product which could be useful to users. It is a fact that the competition is very high, so it is critical that you have a sturdy foundation built such as credentials, good business plan, enough funding, and an innovative or useful product and services. Of course, the deciding factor is how passionate you are in achieving your goals.
The following are some basic steps that one can do when starting a business in Information Technology.
- Research and Analyze the Market
It is very important that you conduct research about the available IT services or products that existed and which ones that have more demand and less supply. Also, ensure to include the online ones too as part of the range in your analysis, you want to be as accurate as you can to plan out a more definite answer. You don’t want to lose the opportunity of grabbing potential leads, especially in the online community.
- Ensure the Quality of your Services and Products
It is always the best to perfect your own niche as to build your own reputation. Hone your skills to the max, be on top of the trends, and even grab certificates or educational credentials; these things boost the potential of attracting even more customers and make connections or a network that will help grow your range of market even more.
- Build a Business Plan
The most critical thing to do is to build a business plan. With a business plan to back you up in managing your business, you’ll be at a better position as you start your business. The business plan will serve as your guide and preparation for different circumstances that are either good or bad for the business. Aside from managing the business in a structured way, the business plan will also serve as a tool to get an overview on how your business will do in the future, what you can do to improve areas that need improvement and quit those that needs to be stopped.
- Get Funding
If you don’t plan to fund the business yourself, prepare a proposal for investors, venture capitalists, or bank loans. To run any business, proper funding is needed. Depending on what kind of business model you chose for your business in information technology, the funds needed will vary a lot. Some doesn’t really need high capital needed which makes it easier for others to fund it themselves, while some need a huge amount of capital due to the technology needed is too advanced and other factors that need funding to start the operations. Creating a financial model will be greatly beneficial for you, as you can use it as a tool to represent your business and its potential to potential investors.
- Network and Legal Framework
Before you start launching your business, it is best to incorporate or set up an alternative legal framework to give your business credibility as well as protect your assets and limiting your liabilities.
Once you’ve managed to settle your business’ foundation, you can then get your business running, create new products or services, and find more customers. Satisfy the demands of your customers as you slowly build up your foundation for IT success.
Computer Networking and Information Technology
Since the use of computer and networking plays a critical role in running businesses especially in the information technology sector, there are certain networking trends that play a key role in IT such as:
- Network Capacity and Performance – Ever since the rise of popularity towards online videos, the demand for network became higher on both the internet and IT networks. It also started a trend of new software applications that got developed and other tools which utilize even more demand for better performance and bandwidth such as high-resolution games, realistic graphics, and immersion, etc. Due to this, the information technology businesses must plan appropriately to take advantage of this opportunity for future growth.
- Mobile and Wireless Usages – The convenience and entertainment that Mobile phones and wireless devices brought another trend which demands the IT networks to support an even wider range of application. Not only the traditional PC’s and workstations but now there are countless smartphones and tablets that need technical support from a large number of users. It has been a trend to have available high-performance wireless hotspots to access connection to the internet too, especially for businesses in the information technology sector.
- Cloud Services – As technology keeps on developing and advancing, so does the storage system. Now, a new trend such as cloud hosting services is available for everyone to use. Some still prefer to use their own server farms for hosting different databases but mostly others migrated to cloud computing environments where they can just use a third-party to provide hosting services to maintain their large amount of data. This also brought about a huge change in the patterns of traffic within the business network, which is a good thing. But, since this application varies depending on the process, proper training is needed before using.
There are even more trends that are continuously developing and are being utilized by IT businesses and other business in different industries which requires the help and assistance of new technology. And it will still keep on changing as time goes by. Trend after trend, in the end, some will get phased out, especially if something better came along. Thus, for those who are taking advantage of the current trends at the moment, they also must prepare ahead of time to avoid losses and continue business operations with no hitches. So, if you have a business plan, you must update it accordingly.
Information Technology Business Models – Financial Planning
Just like in any business, starting a business in the information technology industry needs a proper business plan and financial planning to foresee and ensure its financial feasibility. Creating from scratch would take a lot of time so the convenience of acquiring Information technology industry business models or financial model templates for businesses in the Information technology sector is a more efficient way and preferable choice nowadays.
So, if you plan to start a business in the information technology industry and in need of help with creating a working business plan and a financial plan that will determine your business’s financial feasibility or valuation for a potential investment, check our list of financial model templates specifically designed in Information technology industry above.
These templates are Information technology industry business models – Financial plans, business plans, financial models and financial analysis templates in Excel related to financial modeling and business models in the Information Technology (IT) sector such as Software as a Service (SaaS), Mobile Apps, eCommerce, etc. Included are visuals and charts in Excel which will serve a better projection of your business, and also with assumptions for certain circumstances that might affect your business.
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