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Print Shop Website Business Plan


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Market Analysis Summary

PrintingSolutions.com will focus on small and start-up business customers in the United States. We plan to aggressively pursue and acquire customers through direct business promotions and convert them into repeat paying customers. We will continually strive to provide consumers with more cost-effective avenues, offering substantial savings rather than just a few cents.

PrintingSolutions.com will also be configured to stay ahead of, and capitalize on, emerging market trends such as integration of information/markets and increasing sophistication of online offerings. This will provide a continuously improving, superior customer experience and grow value.

There is a serious benefit deficiency in existing "brick and mortar" printing establishments that create inefficiencies in the ordering and production process. Utilizing the benefits of Internet selling will eliminate many of these problems and create a lower-cost environment.

At the present, PrintingSolutions.com faces major online competition from iPrint.com, which is an established online printer. However, iPrint.com does not offer the lowest cost products on the market, nor does it provide all of the printing services a business needs. Therefore, there is significant opportunity to gain market share.

4.1 Customers and Markets

The company will be primarily targeting small and start-up businesses in the United States; however the company plans to negotiate deals with big businesses. Vendors will include printers and graphic art designers around the world that will be able to help define these markets using the PrintingSolutions.com B2B portal. While the primary focus will be on business customers, PrintingSolutions.com's ability to print in small quantities will allow the company to service the printing needs of individuals as well.

To ensure success, the company will continuously attract new customers, many of whom may have personal and long-standing relationships with traditional print and design shops, catalog vendors, office supply chains and stationery stores. Traditional print and design shops have many advantages which PrintingSolutions.com cannot offer its customers, including physical proximity and interpersonal business relationships. In addition, catalog vendors may be better able to combine orders to achieve economies of scale and may be more convenient for customers who also want to purchase non-printed products, such as office furniture.

PrintingSolutions.com plans to aggressively pursue and acquire customers through promotions and convert them into repeat paying customers. Direct business promotions are the most important vehicle that the company will use to acquire customers. These promotions may include providing the customer a product, such as a mailing label at no charge, or charging the customer only for shipping and handling, in order to introduce that customer to our products and services.

PrintingSolutions.com plans to expand its business and customer base by offering business promotions on a continuous basis. PrintingSolutions.com will continually strive to provide consumers with more cost-effective avenues, offering substantial savings rather than just a few cents. Using offshore print companies as partners and having partners bid on jobs will be one avenue used to ensure the best prices for our customers.

The following chart and table express the projected number of potential customers in the United States by market segment. Although it is planned to make PrintingSolutions.com a global company, the initial phase of market penetration will focus on the domestic market.

Note: Although the large business segment consists of the smallest number of businesses, this group generates the largest sales and revenues of all three segments. Additionally, it is believed that the company's ability to gain market share in the third category, "Individual customers," will be relatively small in comparison with the other two. This is due to the primary concentration of marketing efforts on the business segments.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Small Businesses Utilizing Internet 8% 4,970,000 5,342,750 5,743,456 6,174,215 6,637,281 7.50%
Large Businesses Utilizing Internet 6% 113,600 119,848 126,440 133,394 140,731 5.50%
Individuals Utilizing Internet w/Printing Needs 27% 5,430,000 6,896,100 8,758,047 11,122,720 14,125,854 27.00%
Total 18.75% 10,513,600 12,358,698 14,627,943 17,430,329 20,903,866 18.75%

4.2 Target Market Segment Strategy

Printing Solutions has chosen to focus on the small business market segment as its primary customer base because these customers usually have the lowest switching costs, do not have long-term relationships with other printing companies, and are the most aggressive in searching for low-cost printing services. Furthermore, Printing Solution's ability to route jobs of various sizes to printers with temporary excess capacity matches well with these companies, who usually desire smaller print jobs than the larger companies.

As stated previously, PrintingSolutions.com will also focus on large businesses. The advantage with this market segment is that each job usually offers a higher margin than compared with the small business segment.

Finally, the company will also address individual needs. This is potentially the largest market; however, there is a relatively high churn rate in this segment that will require more extensive marketing efforts to attract new customers. This, in turn, lowers the margin and makes this segment the least attractive.

The evolution of vertical e-marketplaces

Today's vertical e-marketplaces are mere infants on the business maturity scale, with most websites possessing less than eight months of transaction experience. Forrester Research believes that the changing business rules will push these young e-marketplaces into a highly-competitive race in which surviving websites must mature:

From isolated niche offerings . . . e-marketplaces begin their lives by providing a narrow range of targeted products for a buyer base. FairMarket, for example, was launched as a website where electronics manufacturers and distributors could auction surplus electronic components to resellers and system integrators. This highly-focused effort enables online markets to gain initial traction.

. . . to highly interconnected one-stop shops. Vertical e-marketplaces will grow to provide a single access point for commerce and information within an industry--combining multiple services like logistics, payments, and credit with product offerings in real time. As an example, e-marketplace participants purchasing containers of extruded plastic will be able to access specific cargo insurance quotes in the midst of arranging logistics tailored to that order.

2000 To 2001: Racing To Establish Credibility

Over the next 12 to 18 months, e-marketplaces will continue their attack on narrowly-scoped industry inefficiencies by focusing on simple themes:

  • Enhance basic commerce platforms. Firms will solidify their infrastructures to support one or two types of dynamic transaction mechanisms--auction, bid, exchange, or aggregator--targeting specific industry inefficiencies.

  • Sprint to critical mass. Since no more than a few significant e-marketplaces will succeed in most industries, e-marketplaces will do whatever it takes to establish themselves as one of the long-term winners. Websites will relentlessly woo key suppliers and sign ad hoc deals with corporate buyers to quickly ramp sales volumes. In addition to the transaction push, market makers will kick off intense marketing campaigns, requiring a large part of their funds, to create images of success in publications like The Wall Street Journal.

  • Invent unique offerings. E-marketplaces will actively create Net-based service offerings that participants can't access offline. An example is being able to design and order your printed stationery 24 hours a day.

2001+: Building Value through Networks.

Beginning in 2001, e-marketplaces will move beyond basic issues of critical mass and begin reaching out, beyond their websites, to integrate more intensely with other product and service providers. Market makers that make it to this more evolved stage will look to provide a broader set of capabilities to participants by:

  • Configuring comprehensive product/service bundles. E-marketplaces will fulfill customers' visions of one-stop shops by connecting the process of product research information all the way through to trade settlement and clearing--as part of one connected transaction process. These websites will integrate services like risk management, financing, and logistics into a single flow.

  • Weaving together marketplaces. To deliver sophisticated configuration of products and services, Internet vertical markets will seamlessly interconnect with other marketplaces. In this environment, participants may enter one marketplace to perform one simple transaction process--like putting their brochure needs up for bid--but will be led down an orchestrated path through other interrelated websites.

  • Establishing real-time measurements. In a push for new revenue sources, e-marketplaces will cash in on the mass of data streaming through their websites--charging participants for analytic tools to access data and then levying additional fees to massage the data to glean meaningful trends. Look for dynamic pricing engines in commodities, like electronic components, which will help buyers by analyzing current data trends to recommend whether a corporation should put its request for microchips out for bid, buy at an auction, or simply buy stock on a simple volume-discount plan.

4.3 Service Business Analysis

Market Description

Printing can be a major area of expenditure for small businesses. Based on data from CAP Ventures, Inc., an independent print research firm, sales in the United States printing industry totaled £292 billion in 1998, of which £58 billion was derived from commercial printing operations. Short-run, customized items, which include a wide range of business, promotional and general office products, as well as consumer items, comprise a significant portion of these commercial printing operations. This market is highly fragmented, with an estimated 50,000 local and regional commercial printers in the United States.

The traditional process of purchasing short-run print items can be time consuming and error prone. Small businesses and consumers often lack the financial resources to create economies of scale when purchasing printed products. According to the International Data Corporation (IDC), the number of small businesses engaged in e-commerce will grow from 400,000 at the end of 1998 to nearly 2.8 million by the end of 2003.

The explosive growth of the Internet as a tool for global communications has enabled millions of people to interact electronically. The IDC estimates that there were 142 million Web users worldwide at the end of 1998, and expect this number will grow to approximately 502 million by the end of 2003. Rapid acceptance of the Internet as a communications platform, by both businesses and consumers, has created the foundation for significant growth in business-to-business and business-to-consumer e-commerce. IDC estimates that worldwide commerce over the Internet will increase from approximately £50 billion in 1998 to £1.3 trillion in 2003.

The Small Business Administration (SBA) estimates that more than 98% of all businesses in the United States have fewer than 100 employees. These businesses often lack the size and financial resources to create economies of scale. In particular, these organizations typically do not maintain dedicated procurement departments and often do not achieve significant purchasing leverage. That is why the Internet is so important for these businesses; it can provide small businesses and consumers with a number of advantages when making purchases, including:

  • Convenience.
  • Wider selection of products and services.
  • Competitive pricing.

Small businesses are taking advantage of the opportunities the Internet affords. The IDC estimates that the number of small businesses engaged in e-commerce will increase 47.1% annually, from 400,000 at the end of 1998 to almost 2.8 million at the end of 2003, signaling the broad adoption of the Internet by these small enterprises.

The widespread adoption of the Internet as a purchasing vehicle has created a wealth of opportunities for businesses that offer products and services to small businesses and consumers. Simultaneously, it has given both small businesses and consumers a wider variety of products from which to choose at competitive prices.

4.3.1 Market Highlights

Highlights of Market

  • Identifiable market sectors. Forrester Research estimates that there are approximately 70 identifiable vertical market sectors (i.e., manufacturing, insurance, stock brokerage, engineering, etc.) in the commercial business world today.

  • High growth in e-commerce. Forrester Research also reports that B2B e-commerce will be a £1.3 trillion market by 2003 (Red Herring, December 1999). This will surpass the business-to-consumer market by five to seven times.

  • E-commerce market value. IDC, another market intelligence firm, predicts the market to be £633 billion by 2001. IDC also believes that the largest portion of new technology investments for businesses will be devoted to the study and implementation of e-commerce B2B initiatives. Compounded growth between 2001 and 2003 is expected to be 35%. IDC claims that those entrepreneurs that set their banner into e-commerce sectors will be the ones that reap the greatest profits and growth from 2001 and beyond.

  • Internet services market. Gartner, an independent research firm, calls B2B e-commerce "the new millennium's killer application." The Internet services' market will grow at a cumulative annual growth rate of 60% through 2003. IDC also claims that revenue in the worldwide Internet services market grew 71% in 1998 and is expected to grow at a cumulative annual growth rate of 60% through 2003, with revenues for Internet services approaching £80 billion.

IDC predicts that, of the estimated seven million small businesses in the United States, the percentage connected to the Internet will grow from approximately 40 percent in 1996 to almost 70 percent in 2000. IDC estimates the number of users in the US accessing the World Wide Web will increase from approximately 63 million at the end of 1998 to 177 million by the end of 2003.

4.3.2 E-marketplaces

E-marketplace Reports

The research shows that e-marketplaces will be responsible for 53% of all online business trade. Research also indicates that more companies are moving to make purchases and sales on the Internet and are looking to build deeper relationships with business partners. This research has also shown:

The B2B arena reshaping e-marketplaces. The initial wave of B2B e-commerce has been dominated by extranets that automate off-line processes between partners. However, the Net is now moving to a new business venue, e-marketplaces, where the dynamic many-to-many interactions will supplant stagnant one-to-one relationships. These new trading arenas will flourish because:

  • Industry inefficiencies run rampant. In today's business environment, comparing offerings across suppliers requires multiple phone calls to various suppliers or enlisting the costly support of a broker. Time-consuming practices like these are easy targets for the Net, where purchasing agents can gain instant access to comparisons of many different products.

  • E-marketplace vendors will lower technology barriers. Today, B2B entrepreneurs can acquire sophisticated marketplace software from firms like Tradex, Ariba, and Commerce One, or entirely offload the building of their websites to a lengthening list of experienced e-commerce integrators like Vision Systems or Software Solutions Pakistan.

  • Venture funding is shifting to business trade. High-profile B2B players like VerticalNet--whose market cap currently exceeds £4 billion--have caught the investor community's attention. The result? Many venture capitalists are placing bigger bets on their business trade portfolio. 

E-marketplaces will face a changing business environment. As more and more companies compete in the B2B market, there are going to be companies that will either have to sell or go out of business due to:

  • Virgin markets disappearing. While most existing e-marketplaces are launched in a world devoid of serious competition, such as the printing business, these uncharted opportunities will quickly fade away; name recognition must be established.

  • Feature-function races escalate. Functionality is currently not a big issue. But these websites will soon face stiff competition, and basic service offerings won't be good enough.

PrintingSolutions.com will ensure our success by combining the most functionally-rich e-marketplace with the best prices for our customers. PrintingSolutions.com will aggressively pursue partnerships and develop a large customer base to get a strong foothold in the markets it ventures into. New vertical e-marketplace rules will emerge. As the competition increases in these vertical e-marketplaces, the operators will have to update their strategies and change their business paradigm to:

  • Diversify beyond transaction fees. As vertical marketplace venues grow, websites will be pushed into competitive market share battles. To keep customers online, e-marketplaces will be forced to take a smaller percentage of the deal and expand their businesses by searching for new revenue streams.

  • Expand through interconnections. Customers will begin to look for marketplaces to play dual roles: acting as both a one-stop shop for a variety of products as well as offering highly specialized industry-specific services. To accomplish this, alliances will need to be formed with other marketplaces who specialize in other vertical segments.

  • Configure for specific buyer segments. Marketplaces serving industries like print or office supplies will no longer be able to treat all buyers alike. Marketplaces will need to begin offering service bundles to unique buyers--differentiating between decentralized, multinational corporations shipping overseas and local "Mom-and-Pop" shops.

4.3.3 Competition and Buying Patterns

The traditional process of purchasing printing can be time consuming and error prone. Businesses, particularly self-employed individuals and small businesses, often lack the financial resources to create economies of scale when purchasing printed products.

PrintingSolutions.com believes that consumers will choose products and services based on the following criteria:

  • Significant cost savings. The print shop will operate online and will be highly automated, enabling PrintingSolutions.com to eliminate the costs of both building/managing a physical print shop and printing/distributing catalogs. We will be able to pass these savings on to our customers, offering printed goods for up to 50% less than traditional print and design shops. Furthermore, it is believed that our prices will be competitive and could possibly undercut mail-order catalog prices, but have a superior offering of customized printed products.

Traditionally, the primary cost of printing customized products has been working with customers to decide what needs to be printed. This required a design phase that normally employed the services of a graphics team. By providing predefined templates that enable our customers to customize a product online, the company will eliminate the need for a graphics team for the most significant portion of the work. For products such as brochures and logo designs, PrintingSolutions.com will utilize its offshore resources to complete the job. By enabling customers to do the majority of their own design work, and utilizing the offshore resources, we will significantly reduce our overhead and pass substantial savings on to our customers.

  • Convenience. PrintingSolutions.com will develop its online print shop and specialized print services to be user friendly, using a self-service approach to designing and ordering products. Products will be shipped to the location the customer selects, enabling the entire process to be managed from the comfort of the customer's office or home.

  • Simplified Design and Ordering Process. For products created on the PrintingSolutions.com website, the technology will empower the customer to design and view printed items prior to purchasing these products. Also, exact re-prints of a previous order may be purchased at reduced rates. At PrintingSolutions.com, we believe that our "what-you-see-is-what-you-get approach" will be superior to the non-visual, forms-based process traditionally used by print shops and office supply catalogs. It will increase reliability and customer satisfaction and reduce the time it takes to complete an order. The company's interactive design tools will alert the customer of common mistakes and missing information, further reducing the possibility of an incomplete or inaccurate order. Regardless of where a product is created, we will route orders to the optimal printing plant, given the quantity, equipment, raw material, and geographic considerations.

  • Streamlined fulfillment process. After an order is placed, PrintingSolutions.com will electronically send a ready-to-print graphic file. Where appropriate, a job ticket file, which is a data file containing all of the attributes of an order, will be sent to one of the company's certified commercial print vendors located throughout the United States and Pakistan. Our specialized print services, including the online self-service print shop, will virtually eliminate the pre-press process for commercial print vendors. We believe this will significantly improve the accuracy of the order and substantially reduce the amount of time and effort required for the commercial printer to complete it.

  • Broad range of services and professionally printed products. PrintingSolutions.com will provide a one-stop shop for a wide range of printed products and services, with a print product selection that the company believes is superior to most traditional print shops and office supply catalogs. In the self-service print shop, PrintingSolutions.com will offer print items in several product categories, including brochures, business cards, stationery, business forms, folders, labels, and invitations. Customers will be able to design, view, and modify a product and either immediately place their order or save their work-in-progress to order at a later date. Customers will also be able to send free custom electronic greeting cards and electronic stationery directly from the PrintingSolutions.com website. For print items or quantities not offered in the self-service website, the company will respond to customer requests for specialized projects with individualized price quotes.

  • Comprehensive customer service. PrintingSolutions.com will offer a broad range of customer services during all phases of the ordering and fulfillment process. After each order is placed, an email message will be automatically generated to the customer that itemizes the order, the total cost, and reiterates the estimated delivery time. The company will electronically receive order confirmation, printing, and delivery information from its commercial print vendors and make this information accessible to customers through a password-protected mechanism, enabling the customer to easily check an order's status online or even cancel the order if it has not yet been printed. An additional email will also be sent once the customer's order is shipped.

For specialized printing services, PrintingSolutions.com will provide customer service through a combination of electronic and personal assistance. In addition to the above mentioned benefits, we will provide our customers with significant advantages over commercial print vendors. Based on knowledge within the commercial printing industry, we believe that, by integrating our technologies into those of our commercial print vendors and utilizing the "what-you-see-is-what-you-get" approach, we will significantly reduce reprint-due-to-error rates and print wastage.

4.3.4 Main Competitors

The prime competitive threat comes from iPrint.com, a company that currently dominates the market. Its weakness, however, is charging too much. iPrint.com, is an Internet print shop that allows customers to create custom printed products. iPrint.com has developed cutting-edge technology and harnessed the power of the Internet to bring dramatic change to the centuries old printing industry. iPrint.com allows customers to design and order customized printed products such as business cards, office stationery, business checks and forms, personalized company post-it notes, logo coffee cups, promotional t-shirts and photo mouse pads. The company focuses on the business market.

Competitive threats also come from any company that is able to provide the services offered by PrintingSolutions.com at lower prices. The only way to accomplish that is for other companies to have what PrintingSolutions.com will have in terms of knowledge and overseas resources, both in the Internet technology field and printing resources.

The focus of competitors is on printing services, which are grossly overpriced. PrintingSolutions.com will focus on providing more than just printing: the company plans to provide an environment where companies can get their business running as quickly as possible for the best price. Additionally, once the B2B portion of the website is established, the company will be able to further promote competition and gain a larger customer base while limiting operational costs.

PrintingSolutions.com will differentiate itself from competitors by obtaining a global demand for its services. The company will constantly re-evaluate its rates and services to achieve a leading position in the industry, thus allowing customers to attain the services that PrintingSolutions.com provides with substantial savings over competitors' prices.

The advantage of PrintingSolutions.com will be its team of highly-qualified professionals that have been working in the technology industry for years. Additionally, the company will benefit from having resources outside the United States, and will leverage them extremely well, while keeping the cost of operation down.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Small Businesses Utilizing Internet 8% 4,970,000 5,342,750 5,743,456 6,174,215 6,637,281 7.50%
Large Businesses Utilizing Internet 6% 113,600 119,848 126,440 133,394 140,731 5.50%
Individuals Utilizing Internet w/Printing Needs 27% 5,430,000 6,896,100 8,758,047 11,122,720 14,125,854 27.00%
Total 18.75% 10,513,600 12,358,698 14,627,943 17,430,329 20,903,866 18.75%