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Do you want to start data entry business?
If you want to start a data entry business, you have made the right choice as there are many benefits of starting this business. First, you can start it with a very low initial investment from a small office or even your home and you can later increase its magnitude to any size depending on your requirements. Moreover, it gives an incredibly high return on investment as compared to other businesses started from similar amounts of investments group for business plan.
However, before you start this business, you will have to prepare a comprehensive data entry business plan to serve as the basis of your company’s future decisions. If you are wondering how to write one, here we are providing you a data entry business plan sample of a startup named ‘Liz Data Entry Services’.
Executive Summary
2.1 The Business
Liz Data Entry Services will be a licensed and insured data entry business start up located in downtown Boston. The business will provide a variety of services in the Data Processing and Hosting Services industry.
2.2 Management
The company will be owned by Liz Gyda who has degrees in Computer Science and Business Administration from Harvard University. Liz has been associated with several tech companies across the US including software giants and has all the experience needed for starting a data entry business plan.
2.3 Customers
Our customers will be business businesses, government agencies, banks, and non-business organizations located across the globe.
2.4 Business Target
Our target is to balance the initial cost of the startup with earned profits by the end of the first year and to achieve the net profit margin of $10k per month by the end of the first year.
Company Summary
3.1 Company Owner
The company will be owned by Liz Gyda who did her Bachelors in Computer Science from Harvard University before pursuing her Masters in Business Administration. After that, she has been associated with several tech companies across the US including software giants like Microsoft and Oracle for more than seven years.
3.2 Why the Business is being started
Ever since Liz started her business classes, starting her own business became her sole passion. But she didn’t want to start a business without gaining all the experience required to do so, that’s why she opted to serve in other companies after graduation. However, after seven years of service, she is now all ready to start her own venture.
3.3 How the Business will be started
It’s very easy to start a data entry home business as one doesn’t need lots of investment but Liz wanted to go a step ahead. So, Liz Data Entry Services will be a licensed and insured data entry company located in downtown Boston.
For the startup, the company will procure the latest computers, servers, laptops, anti-malware software, intrusion detection and prevention systems, data management software, besides the usual inventory. The company will undertake all the required measures to make sure our data is secured from unnecessary threats. The startup summary is as follows:
The detailed startup requirements are given below:
| Start-up Expenses | ||
| Legal | $55 300 | |
| Consultants | $0 | |
| Insurance | $32 750 | |
| Rent | $32 500 | |
| Research and Development | $32 750 | |
| Expensed Equipment | $32 750 | |
| Signs | $1 250 | |
| TOTAL START-UP EXPENSES | $187 300 | |
| Start-up Assets | $220 875 | |
| Cash Required | $332 500 | |
| Start-up Inventory | $32 625 | |
| Other Current Assets | $232 500 | |
| Long-term Assets | $235 000 | |
| TOTAL ASSETS | $121 875 | |
| Total Requirements | $245 000 | |
| START-UP FUNDING | ||
| START-UP FUNDING | $273 125 | |
| Start-up Expenses to Fund | $151 875 | |
| Start-up Assets to Fund | $123 000 | |
| TOTAL FUNDING REQUIRED | $0 | |
| Assets | $23 125 | |
| Non-cash Assets from Start-up | $18 750 | |
| Cash Requirements from Start-up | $0 | |
| Additional Cash Raised | $18 750 | |
| Cash Balance on Starting Date | $21 875 | |
| TOTAL ASSETS | $373 125 | |
| Liabilities and Capital | $0 | |
| Liabilities | $0 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $0 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $0 | |
| Capital | $620 125 | |
| Planned Investment | $620 125 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $620 125 | |
| Loss at Start-up (Start-up Expenses) | $313 125 | |
| TOTAL CAPITAL | $251 875 | |
| TOTAL CAPITAL AND LIABILITIES | $251 875 | |
| Total Funding | $255 000 | |
Products
Before you dig into details of how to start data entry business plan, you must decide the services you will provide to your customers as it will help you with several subsequent steps. Liz Data Entry Services will provide a variety of services in the Data Processing and Hosting Services industry aimed to help our clients grow. Our primary services include:
- Data entry services
- Database management services
- Data processing services
- Data protection services
Marketing Analysis of Data Entry Business
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The most important component of a data entry business plan is its accurate marketing analysis as it helps you identify and target your potential customers. An accurate marketing analysis will also reveal if the market of your business has the potential to provide profits or not. If you are starting a data entry company on a small scale, such as from your home, you can just take help from online data entry business plan samples. Otherwise, if you are starting on a big scale, it’s better to seek help from marketing experts regarding marketing analysis.
5.1 Market Trends
The demand for data entry businesses is increasing day by day due to the increase in eCommerce business and online marketing activities. According to a report by IBISWorld, the data entry industry is growing at a considerable rate of 5.5% annually. There are more than 63,000 registered data processing and hosting companies working in the United States, responsible for the employment of more than 620,000 persons and generating a revenue of more than $150 billion per year. These stats clearly reveal that the Data Processing and Hosting Services industry has a lot of potential for startups.
5.2 Marketing Segmentation
Owing to the nature of this business, we can easily serve any company located anywhere on the globe. Liz Data Entry Services primarily aim to serve the corporate sector, non-business organizations, and financial institutions located around the world. The division of our target audience is as follows:
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5.2.1 Bank & Financial Institutions: Banks and financial institutions such as mortgage and insurance companies require a lot of data entry and processing work. They usually outsource this work to freelance groups or companies likes us because their staff can’t handle the amount of work they are required to do. Hence, we will be a perfect choice for them for all data entry related services.
5.2.2 Organizations: Our second target group comprises of non-business organizations located worldwide including schools, colleges, and universities, government and public-sector organizations, religious and sports organizations, political parties, etc. NGOs also require lots of data entry work to prepare reports on several issues.
5.2.3 Corporate Sector: This target group will comprise of businesses including but not limited to hotels, restaurants, manufacturers, distributors, branding agencies and software development companies.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Bank & Financial Institutions | 48% | 22 334 | 32 344 | 43 665 | 52 544 | 66 432 | 10,00% |
| Organizations | 32% | 12 867 | 14 433 | 15 999 | 17 565 | 19 131 | 15,32% |
| Corporate Sector | 20% | 11 433 | 13 344 | 16 553 | 18 745 | 20 545 | 13,43% |
| Total | 100% | 46 634 | 60 121 | 76 217 | 88 854 | 106 108 | 9,54% |
5.3 Business Target
Our primary business targets are as follows:
- To become one of the leading data entry services
- To create a solid presence on all major freelancing platforms such as Upwork and Fiverr within the next six months
- To balance the initial cost of the startup with earned profits by the end of the first year
- To achieve the net profit margin of $10k/month by the first year, $15k by the second year, and $25k by the third year
5.4 Product Pricing
Note
Product pricing is one of the most important factors in deciding the strategy for any data entry business plan and it can easily become your competitive advantage if you act wisely. We will provide our services in relatively lower ranges to introduce ourselves and create a strong presence online.
Strategy
If you are going to start a data entry online business, and you want to target clients from around the world, you should make a solid sales strategy. An exceptional strategy is the only way to stand out among your competitors and attract high-paying clients, even if you’re starting a home based data entry business.
6.1 Competitive Analysis
Our biggest competitive edge will be our competitive prices and the quality of our services. We will be offering a wide range of services to our customers located around the globe and we will be available 24/7 to cater to their needs. We will also ensure to keep the valuable data of our clients safe and secure by following all standards.
6.2 Sales Strategy
We will advertise our services in following ways.
- We will hold seminars and workshops in business as well as non-business organizations to raise awareness about the usefulness of outsourcing data entry work
- We will advertise our services through digital marketing
- We will offer a 10% discount on our services for the first three months of our launch
- We will maintain a solid presence on all major freelancing platforms such as Upwork and Fiverr
6.3 Sales Monthly
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Data entry services | 1 887 030 | 2 680 320 | 2 588 240 |
| Database management services | 802 370 | 815 430 | 823 540 |
| Data processing services | 539 320 | 770230 | 1 002 310 |
| Data protection services | 265 450 | 322 390 | 393 320 |
| TOTAL UNIT SALES | 3 494 170 | 4 588 370 | 4 807 410 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Data entry services | $140,00 | $150,00 | $160,00 |
| Database management services | $600,00 | $800,00 | $1 000,00 |
| Data processing services | $700,00 | $800,00 | $900,00 |
| Data protection services | $650,00 | $750,00 | $850,00 |
| Sales | |||
| Data entry services | $2 149 800 | $2 784 000 | $3 383 200 |
| Database management services | $120 050 | $194 500 | $268 500 |
| Data processing services | $50 110 | $71 600 | $93 000 |
| Data protection services | $139 350 | $194 600 | $249 850 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Data entry services | $0,70 | $0,80 | $0,90 |
| Database management services | $0,40 | $0,45 | $0,50 |
| Data processing services | $0,30 | $0,35 | $0,40 |
| Data protection services | $3,00 | $3,50 | $4,00 |
| Direct Cost of Sales | |||
| Data entry services | $989 300 | $1 839 000 | $2 679 700 |
| Database management services | $66 600 | $119 900 | $173 200 |
| Data processing services | $17 900 | $35 000 | $52 100 |
| Data protection services | $19 400 | $67 600 | $115 800 |
| Subtotal Direct Cost of Sales | $1 294 100 | $1 699 400 | $2 104 700 |
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan
After knowing the basics of how to start data entry office, the most important step is to hire skilled and experienced professionals to assist you in running your business.
7.1 Company Staff
Liz will be hiring the following staff for the startup.
- 1 Accountant to maintain financial and other records
- 2 Technicians to operate the servers and other machines
- 10 Data Entry persons for data entry and processing software
- 2 Vulnerability Officers for ensuring data protection
- 2 Managing Assistants to manage the company’s official website
- 2 Customer Representatives to interact with customers and record their orders
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountant | $85 000 | $95 000 | $105 000 |
| Technicians | $50 000 | $55 000 | $60 000 |
| Data Entry Persons | $387 000 | $394 000 | $401 000 |
| Vulnerability Officers | $50 000 | $55 000 | $60 000 |
| Managing Assistants | $85 000 | $95 000 | $105 000 |
| Customer Representatives | $50 000 | $55 000 | $60 000 |
| Total Salaries | $185 000 | $205 000 | $225 000 |
Financial Plan
If you are going to make your data entry business a success, make sure to pay special attention to your financial plan. Your financial plan should include all details about how you will be recovering investments from the profit as well as how you will be managing your incomes and expenses. Even if you’re planning to make money by data entry from home, you should consider making a financial plan for it to assess how it can yield a maximum profit to you. If you’re starting on a big scale, it’s better to seek help from experts.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10,00% | 11,00% | 12,00% |
| Long-term Interest Rate | 10,00% | 10,00% | 10,00% |
| Tax Rate | 26,42% | 27,76% | 28,12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | ||
| Monthly Units Break-even | 5530 | |
| Monthly Revenue Break-even | $159 740 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $260,87 | |
| Average Per-Unit Variable Cost | $0,89 | |
| Estimated Monthly Fixed Cost | $196 410 | |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309 069 | $385 934 | $462 799 |
| Direct Cost of Sales | $15 100 | $19 153 | $23 206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15 100 | $19 153 | $23 206 |
| Gross Margin | $293 969 | $366 781 | $439 593 |
| Gross Margin % | 94,98% | 94,72% | 94,46% |
| Expenses | |||
| Payroll | $138 036 | $162 898 | $187 760 |
| Sales and Marketing and Other Expenses | $1 850 | $2 000 | $2 150 |
| Depreciation | $2 070 | $2 070 | $2 070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4 000 | $4 250 | $4 500 |
| Insurance | $1 800 | $1 800 | $1 800 |
| Rent | $6 500 | $7 000 | $7 500 |
| Payroll Taxes | $34 510 | $40 726 | $46 942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188 766 | $220 744 | $252 722 |
| Profit Before Interest and Taxes | $105 205 | $146 040 | $186 875 |
| EBITDA | $107 275 | $148 110 | $188 945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26 838 | $37 315 | $47 792 |
| Net Profit | $78 367 | $108 725 | $139 083 |
| Net Profit/Sales | 30,00% | 39,32% | 48,64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40 124 | $45 046 | $50 068 |
| Cash from Receivables | $7 023 | $8 610 | $9 297 |
| SUBTOTAL CASH FROM OPERATIONS | $47 143 | $53 651 | $59 359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47 143 | $53 651 | $55 359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21 647 | $24 204 | $26 951 |
| Bill Payments | $13 539 | $15 385 | $170 631 |
| SUBTOTAL SPENT ON OPERATIONS | $35 296 | $39 549 | $43 582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35 296 | $35 489 | $43 882 |
| Net Cash Flow | $11 551 | $13 167 | $15 683 |
| Cash Balance | $21 823 | $22 381 | $28 239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184 666 | $218 525 | $252 384 |
| Accounts Receivable | $12 613 | $14 493 | $16 373 |
| Inventory | $2 980 | $3 450 | $3 920 |
| Other Current Assets | $1 000 | $1 000 | $1 000 |
| TOTAL CURRENT ASSETS | $201 259 | $237 468 | $273 677 |
| Long-term Assets | |||
| Long-term Assets | $10 000 | $10 000 | $10 000 |
| Accumulated Depreciation | $12 420 | $14 490 | $16 560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198 839 | $232 978 | $267 117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9 482 | $10 792 | $12 102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9 482 | $10 792 | $12 102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9 482 | $10 792 | $12 102 |
| Paid-in Capital | $30 000 | $30 000 | $30 000 |
| Retained Earnings | $48 651 | $72 636 | $96 621 |
| Earnings | $100 709 | $119 555 | $138 401 |
| TOTAL CAPITAL | $189 360 | $222 190 | $255 020 |
| TOTAL LIABILITIES AND CAPITAL | $198 839 | $232 978 | $267 117 |
| Net Worth | $182 060 | $226 240 | $270 420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4,35% | 30,82% | 63,29% | 4,00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5,61% | 4,71% | 3,81% | 9,70% |
| Inventory | 1,85% | 1,82% | 1,79% | 9,80% |
| Other Current Assets | 1,75% | 2,02% | 2,29% | 27,40% |
| Total Current Assets | 138,53% | 150,99% | 163,45% | 54,60% |
| Long-term Assets | -9,47% | -21,01% | -32,55% | 58,40% |
| TOTAL ASSETS | 100,00% | 100,00% | 100,00% | 100,00% |
| Current Liabilities | 4,68% | 3,04% | 2,76% | 27,30% |
| Long-term Liabilities | 0,00% | 0,00% | 0,00% | 25,80% |
| Total Liabilities | 4,68% | 3,04% | 2,76% | 54,10% |
| NET WORTH | 99,32% | 101,04% | 102,76% | 44,90% |
| Percent of Sales | ||||
| Sales | 100,00% | 100,00% | 100,00% | 100,00% |
| Gross Margin | 94,18% | 93,85% | 93,52% | 0,00% |
| Selling, General & Administrative Expenses | 74,29% | 71,83% | 69,37% | 65,20% |
| Advertising Expenses | 2,06% | 1,11% | 0,28% | 1,40% |
| Profit Before Interest and Taxes | 26,47% | 29,30% | 32,13% | 2,86% |
| Main Ratios | ||||
| Current | 25,86 | 29,39 | 32,92 | 1,63 |
| Quick | 25,4 | 28,88 | 32,36 | 0,84 |
| Total Debt to Total Assets | 2,68% | 1,04% | 0,76% | 67,10% |
| Pre-tax Return on Net Worth | 66,83% | 71,26% | 75,69% | 4,40% |
| Pre-tax Return on Assets | 64,88% | 69,75% | 74,62% | 9,00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19,20% | 21,16% | 23,12% | N.A. |
| Return on Equity | 47,79% | 50,53% | 53,27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4,56 | 4,56 | 4,56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19,7 | 22,55 | 25,4 | N.A. |
| Accounts Payable Turnover | 14,17 | 14,67 | 15,17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1,84 | 1,55 | 1,26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0,02 | -0,04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120 943 | $140 664 | $160 385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0,45 | 0,48 | 0,51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23,66 | 27,01 | 30,36 | N.A. |
| Sales/Net Worth | 1,68 | 1,29 | 0,9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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