Employee Owned Business Draft Business Plan

This is a draft business plan for an employee owned software contracting business providing contracting, outsourcing, and staffing services focused on software development. Our initial focus will be on programming, and quality assurance.

Employee Ownership

The point of being an employee owned business will be to ensure the following:

  1. That to the largest extent possible, the profits earned by the company will be enjoyed by the contractor doing the work and the salesperson booking the work.

  2. That all employees have a direct stake in the success of every contract and the success of the company. This is an important part of our business story.  The idea of peer review and how we implement on this needs to be further developed.

  3. That to the largest extent possible, company decisions are made through a collective and democratic process, governed by a more extensive constitution that will be drafted and adopted at a later date.

Proposed Revenue Sharing Split

For contract work, our (proposed) company split for each billable dollar will be:

60 cents toward direct employee compensation to the technical contractor doing the work (salary and benefits). 25 cents toward the salesperson / salespeople who were the procuring cause of the business. (A portion of this may also be paid to any contractors who may have helped bring in the business). 15 cents other -- (to be determined later by the employee owners) We expect that a substantial part of this will be recruitment bonuses for new hires and the remainder will be for company overhead. Alternatively, we may wish to fund performance bonuses either for outstanding technical achievement or increase the commission paid to full time salespeople.

Cost Containment

We will avoid offices for a long time, maybe forever. This is not to say that we’ll only pursue telecommute opportunities -- many contracts are on-site. I have worked for companies that did outsourcing and had everybody in a building and that may be a way to go in the future -- but we may be able to provide a better service if we combine on-site contractors with an effective system of remoting workers offsite (perhaps with tiered pricing for our customers). Company meetings by Skype, etc.

Next Steps

  • Hire employee number 2 etc. Further develop our attractiveness to our fellow potential employee owners. Think through what a great company would look like for some software developers, and make that happen.

  • Further refine our presentation that we make to clients. What are the key advantages of working with us versus whatever other choices you might have?

  • Refine this plan further.

  • Start approaching recruiters to learn more about the sales / HR end of the business and identify possible partners.

  • Think about if we want to focus on certain specifics in terms of languages / technologies and / or capabilities.


Written by John Lockwood in misc on Mon 15 April 2013.