Microsoft Word - NI Cloud Business Plan Template Final Nov 23

Cloud Business Plan

Template

Created for Microsoft by

Neural Impact Inc.

with contributions from Cloud Speed

Updated: December 2018

partners to use internally and to share with their outside stakeholders only. It may not

be reproduced for general distribution or resale.

Contents

Statement of Confidentiality & Non-Disclosure......................................................................................................................................................... 4

Executive Summary – Editable Example ...................................................................................................................................................................... 6

Business Description – Editable Example .....................................................................................................................................................................7

Cloud Opportunity ........................................................................................................................................................................................................... 10

SaaS Opportunity ............................................................................................................................................................................................................. 10

Key Benefits of the SaaS Model .................................................................................................................................................................................... 12

Business Application Market .......................................................................................................................................................................................... 12

Industry Analysis ............................................................................................................................................................................................................... 13

Industry Trends ................................................................................................................................................................................................................. 15

Market Analysis ................................................................................................................................................................................................................. 17

Competitive Analysis ........................................................................................................................................................................................................ 18

Competitive Differentiation ............................................................................................................................................................................................ 19

Product and Services Offerings ................................................................................................................................................................................... 20

Marketing Strategy & Sales ........................................................................................................................................................................................... 24

Operations ........................................................................................................................................................................................................................ 30

Operational Plan 2019 .................................................................................................................................................................................................... 30

Financial Projections ....................................................................................................................................................................................................... 34

Summary Financial Projections .................................................................................................................................................................................... 37

Risk Factors ....................................................................................................................................................................................................................... 38

Management Team ......................................................................................................................................................................................................... 41

Appendices - Samples ................................................................................................................................................................................................... 43

Key Variables .................................................................................................................................................................................................................... 44

Revenue and Margin Contribution ............................................................................................................................................................................. 44

Four Year Profit and Loss Impact ................................................................................................................................................................................ 45

Projected Customer Acquisition Growth ................................................................................................................................................................... 45

............................................................................................................................................................................................................................................. 46

Cash Flow Projections .................................................................................................................................................................................................... 46

Anticipated Valuation Impact ....................................................................................................................................................................................... 46

Advisor and Board Members Bios............................................................................................................................................................................... 47

Helpful Resources ............................................................................................................................................................................................................ 47

Introduction

Writing a business plan for your new Cloud business, your parent company spinoff, your newly-merged

organization or your new business practice can be a daunting task. We hope this business plan template

will guide you through this process, and will help you to effectively crystalize and articulate your vision so

that you can share it with others.

Statement of Confidentiality & Non-Disclosure

This document contains proprietary and confidential information. All data submitted to [INSERT RECEIVING PARTY] is provided in

reliance upon its consent not to use or disclose any information contained herein except in the context of its business dealings with

[YOUR COMPANY NAME]. The recipient of this document agrees to inform its present and future employees and partners who

view or have access to the document's content of its confidential nature.

The recipient agrees to instruct all employees that they must not disclose any information concerning this document to others

except to the extent that such matters are generally known to, and are available for use by, the public. The recipient also agrees

not to duplicate or distribute or permit others to duplicate or distribute any material contained herein without [YOUR COMPANY

NAME]'s express written consent.

[YOUR COMPANY NAME] retains all title, ownership and intellectual property rights to the material and trademarks contained

herein, including all supporting documentation, files, marketing material, and multimedia.

BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE BOUND BY THE AFOREMENTIONED STATEMENTS.

Directions: Executive Summary

The executive summary section of your business plan consists of a one or two-page presentation of the key

components of your business plan, and a brief overview of your venture. It must be concise, yet comprehensive. Like

a movie trailer, it should be compelling and capture readers’ interest, motivating them to read the remainder of your

business plan in detail.

Include the following:

 The Business and Team: What business are you in? Why does your business exist? What are your values and

purpose? Are you an existing business, a new business, a new division or practice area, or a takeover? Who is

the management team and how are they uniquely qualified to succeed?

 Products and Services: What specifically are you offering, and to whom? Do you offer business applications,

Cloud infrastructure and apps, data platforms, custom development, artificial intelligence, professional services,

managed services, or a combination of these? Choose commonly used terms to state concretely what you have

or what you do that addresses the customer or industry problem you’ve identified.

 The Market: What is the market you are competing within? How would you define whom you are going after?

Provide brief, high-level aggregate data about your target market segment, the size of the market, and industry

growth rates. Include any other compelling data. For example, how many companies are in your market? How

many dollars are spent in this segment each year? What are the cumulative annual growth rates? How fast is

this market growing? Quote credible and current sources for this data. Purchase research information if you

need to. How will you make your offering available to this market: direct, online and/or through your own sales

force, resellers or distribution channels.

 The Competitive Advantage: Briefly outline the competitive outlook and dynamics of the market in which you

compete. Clearly state your real, sustainable and differentiated competitive advantages in one or two

sentences. For example, are you first to market? Is your offering the easiest to deploy or use? Do you have

unique intellectual property? Do you have a better product or service? Are you offering more value?

 The Risk / Opportunity: You need to make it clear there is a compelling, unmet need in the market that you are

going to fill (current or emerging). You must show there is an intense problem which organizations will pay you

well to resolve. Describe your revenue model in 1 or 2 sentences. Identify market pricing, product-related or

management risks, and how you plan to mitigate them.

 The Financial Summary: Outline the capital requested. What financial achievements (sales and profits

generated) will you accomplish to support the business and repay your lenders or investors? When will you be

profitable? Summarize how much money has been invested in the business to date, and how it is being used.

See sample copy below & delete this table when template is complete.

Executive Summary – Editable Example

Polaris Technology Systems Inc. (“Polaris Tech” or “the Company”) was founded in 2000. Polaris Tech began as a Microsoft value-

added reseller, selling on-premise Microsoft business solutions and implementation services to various customer segments. The

Company gained strong domain expertise and industry knowledge in the transportation industry and accumulated several

customers in this vertical segment. Polaris Transportation Software Ltd. (“Polaris”) is a new division of Polaris Tech. It was established

in May 2016 to position the Company to gain significant market share in the new Cloud business market. The purpose of forming

Polaris was to package and monetize Polaris Tech’s transportation industry domain expertise, and create several highly-customized,

out-of-the-box, SaaS-based, industry-specific solutions. This business plan focuses on Polaris, the new Cloud-focused division, and

this exciting new growth opportunity for the Company.

Ed Hartford, a veteran Silicon Valley entrepreneur, is the CEO of Polaris, and is joined by a management team with decades of

experience across several successful high tech companies.

Over the past 24 months, Polaris completed the development of its new Microsoft Cloud-based suite of Transportation

Management Software (TMS) applications and solutions. These applications are designed for small to medium-sized trucking and

freight brokerage companies, so that they can track and manage their business operations. The key function of these solutions is

to help trucking companies maximize their cash flow, increase profitability, reduce costs, manage customer information and

minimize the risk of regulatory non-compliance. Polaris’s core differentiation is its deep industry domain expertise, 45-day (or less)

implementation promise, commitment to 100% customer satisfaction, and unique product functionality.

Polaris is focused on optimizing its internal processes for a subscription revenue model and has invested heavily in marketing and

streamlining sales. In addition, it has invested in new migration tools, pre-defined integrations and an accelerated deployment

methodology. Polaris has 22 employees and is generating over $3.7 million in annual revenues.

The Company is seeking $1,200,000 in debt financing, which will bear interest of 15% per annum and provide a bonus payment of

10% on payout, which is expected within three years. The funds will be used to expand and scale its sales and marketing efforts, as

well as to develop new features and functionality in its web-based, online Transportation Management Software system.

The Company’s goal is to expand its leadership position in the mid-market, while addressing the needs of emerging players in the

freight transportation marketplace looking for more modern and flexible business software. The global transportation management

software market is forecasted to expand by 15.6% over the next seven years, with revenues hitting $19.03 billion worldwide in 2022

(Transparency Market Research, Sept. 2015). There are an estimated 1.2 million trucking companies in the US alone, of which 97%

operate 20 or fewer trucks (Truckinginfo.net, 2018). There are also opportunities to expand globally.

Over the past 24 months, Polaris has successfully transformed its core on-premise product to the cloud, has shifted from an upfront

perpetual licensing software model to a more repeatable, recurring revenue model, has an offering of monthly services and has

migrated 20% of its customers to the new Cloud-based platform. The management team is proud to report that, during this critical

transition period, revenues only dropped by 10% in the first year of the transition and are now increasing at an accelerated rate in

each quarter. The Company seeks investment to fuel a new level of growth in the business, moving it from $3.7 million to over $20

million in revenue over the next five years. This will be possible as Polaris delivers on the market’s desire for newer, scalable, quick

to deploy and less expensive Cloud solutions and technologies.

Technology businesses are often subject to several unforeseen risks. These include potential product risks, market risks, financial

risks, and team risks. In reviewing this business plan, potential investors should bear these in mind.

Directions: Business Description

The business description is a brief, one-page summary of the history, the basic nature, and the purpose of your

business.

It should include the following:

 History and status of your company: name, location, and legal form; how long your company has been in

business; the size of your company in terms of employees, revenue, ownership, etc.

 The products and services your company sells.

 Vision and goals: a concise, content rich, exciting statement of your vision and corporate objectives in terms

of growth, offering and time frames.

See sample copy below & delete this table when template is complete.

Business Description – Editable Example

Polaris Transportation Software Ltd. (“Polaris”) was formed in May 2016. Its parent, Polaris Technology Systems Inc. (“Polaris Tech”

or “the Company”), was incorporated under the laws of the State of California in September 2000, and operates out of its

headquarters in Palo Alto. With a staff of 22 and annual revenues of $3.7 million, Polaris was recently formed to develop and deliver

a suite of unique, online, Microsoft-based Transportation Management Software (TMS) related applications, which are more

specifically described below.

The Company was founded by Ed Hartford, who was also responsible for the startup, expansion and sale of several technology

and transportation logistics companies, including SLI Transportation International, Icarus Logistics Management, and Trans Top

Enterprises. Together with directors Julius Rosenburg and Peter May. Ed Hartford actively manages the Company. Hartford and the

management team own 100% of the Company’s issued and outstanding common stock.

Polaris will pivot from being a traditional software reseller and implementation company for SMEs, to a leading provider of software

as a service (“SaaS”) products for the trucking and brokerage industry. In the next 5 years, most of the company’s revenue is

expected to come from helping the transportation industry automate internal processes through a combination of packaged

software solutions and related optimization services.

The Polaris vision is to assume the leadership position in the Tier 2 TMS market by being at the heart of any growing trucking and

freight brokerage business. With a nimble and scalable SaaS solution, Polaris will enable these clients to remain competitive. They’ll

easily access and track all the critical pieces of their business with the highest compliance assurance levels.

Specifically, Polaris aims to:

 generate 1,000 new subscription license users by May 2020

 develop new monthly recurring optimization services, resulting in net new service revenues

 achieve $20 million in annualized revenues by 2024

Polaris Transportation Management Software

Polaris’s solution suite is designed to help companies centralize all data associated with running a trucking and/or freight brokerage

company. Its core software application functions as the hub of their business.

In freight transportation, companies must continually monitor and track data and information on all aspects of the delivery: truck,

trailer, driver, freight, condition of the freight, pick-up and drop-off locations, taxes, insurance, invoices, and remittances. This

process can be complex and at times overwhelming for many companies, especially smaller ones.

Polaris serves trucking companies operating between 10 and 80 trucks, and freight brokerages with 10 to 20 agents. Additionally,

Polaris uniquely serves companies who run both a trucking company with a brokerage division, or a brokerage business with some

trucking assets.

The Polaris Software Brand

Polaris’s product brand “North Star Guidance” speaks to the small-to-medium players who cannot afford large, expensive and

complex custom solutions and significant capital investments in IT and servers, and who have a small or non-existent IT department.

It helps those companies daunted by regulatory requirements and by the increasingly complex demands of shippers and customers

seeking ‘just-in-time’ information on their freight. It enables small-to-medium transportation companies to compete with national

and international competitors who have greater capital, resources and distribution.

Core Values

 Turn customers into enthusiastic fans

 Innovate, innovate, innovate

 Create a great work environment

 Treat everyone we engage with respectfully

 Put customer satisfaction above all else

Mission

We create intuitive software for the trucking

and brokerage industries. We have a

pioneering spirit and genuine desire to

improve their operations and businesses.

There will always be a need to move food and

other necessities from producer to buyer, and

we help automate this process. We believe

developing innovative technology solutions

can transform this industry, and prepare it to

meet the unknown needs of the future. We

enable our customers to accomplish their

goals while using our suite of solutions.

Directions: Market Opportunity

In this section, you need to outline the opportunity in the industry and the market in which your business will focus.

As well, you’ll identify the key industry drivers and the competitive landscape in which you will compete. This section

should be broken down into subsections as follows:

 Industry Analysis: How is your industry structured? What are the major segments? What is your industry’s

size, its growth rate, its capacity and its profitability? What about its sensitivity to economic cycles and

seasonality? What are the key drivers that impact the industry?

 Industry Trends: State any trends you believe currently affect your industry or will potentially occur in your

market. What are the major economic and political factors that can impact your industry? Are there social,

cultural, demographic, environmental, or geographical factors disrupting your customers? Are certifications

and/or government regulations driving change? What are the competitive dynamics? Is there consolidation?

 Market Analysis: Describe the specific market in which you will be competing (it will be smaller than the entire

industry stated above). What are its defining characteristics, and what important developments are

happening within it?

 Competitor Analysis: Identify the competitive state in your market (marketing strategy, superior

product/service, established company, capital resources, expertise, relationships with key industry members,

etc.). What are your main sources of competition? What is the relative intensity of competition arising from

each source? Are competitors well established? Do they have Cloud solutions? Capital? Market share? Use

the following table entitled Competitive Analysis to compare your company with your three most important

competitors.

Competitive Analysis

FACTOR

Importance

to Customer

Our

Company

Strength Weakness Rival A Rival B Rival C

Solution

Price

Quality & Depth of Offering

Tech Platform

Service

Reliability

Stability

Vertical Domain Expertise

Company Reputation

Location

Sales Method

Marketing Capabilities

See sample copy below & delete this table when template is complete.

Cloud Opportunity

Any discussion of the technology industry today must start and end with Cloud computing. It is changing the way technology is

consumed worldwide, and how solutions are being developed and delivered. SaaS is a general term referring to anything involving

delivery of technology infrastructure or software applications over the Internet, where multiple companies share application and

hardware resources. Cloud computing is experiencing 5-year compound annual growth rates (CAGR) of 23.5%

, which is 5 times

the growth rate of the entire IT industry.

The main reasons for the fundamental shift in customer demand for Cloud computing are four-fold:

1. Cloud solutions require little or no capital outlay by the customer. Cloud offerings are consumed on a subscription basis, with

all aspects of the offering provided by the supplier. This requires no major upfront investments, either in software or hardware.

Hence, customers have less upfront cost and risk.

2. Cloud solutions cost less. Cloud gives mid-size companies the ability to achieve scale traditionally unavailable to them.

Customers also save on the cost of hardware, human resources, maintenance, and customization/configuration costs.

3. Cloud solutions are more flexible and scalable. An organization can use as little or as much of any Cloud technology as needed,

scaling capacity up or down without incremental infrastructure costs. Downsizing or expansion can be accommodated easily.

4. Cloud solutions decrease risk. Because Cloud offerings are ‘evergreen’ services, there is no risk of the technology becoming

obsolete. A customer is always using the most recent version of any particular technology.

Solution providers like Polaris who successfully transform their business to a Cloud model will be positioned to capture their share

of the $1.7 trillion technology spend in 2019

. Polaris has therefore been investing in migrating its products to the cloud for the past

24 months and will continue to do so on an ongoing basis. IDC estimates that Cloud partners (those attaching value to Microsoft

Cloud solutions) are growing twice as fast as their less Cloud-capable peers. That’s because spending on Cloud IT and services is

expected to more than double by 2021.

SaaS Opportunity

The evolution of SaaS has been driven by changes in buyer

demand and expectations, combined with advancements in

Cloud technology. The benefits of SaaS to Polaris will be lower

development and support costs, streamlined sales cycles,

unified deployment environments, and new, data-driven

insights into customer behavior.

As software buyers give more consideration to total cost of

ownership (“TCO”) and ease of use, SaaS is quickly becoming

the preferred alternative to traditional, on-premises software

deployments across all industries and business process

categories. This presents a significant opportunity for Polaris.

Ibid.

$99.7B Forecasted size of SaaS marketplace by 2021

11.2x

Average revenue valuation for private SaaS

ISV

The acceleration in SaaS adoption can, in part, be explained by the fact that providers deliver nearly all application functional

extensions and add-ons as a service. This appeals to customers because SaaS solutions are engineered to be more purpose-built

and to deliver better business outcomes than traditional software. According to the Cisco Global Cloud Index, SaaS applications

will make up 74% of all Cloud workloads by 2020, up from 41% in 2013.

Additionally, the reason behind this growing interest in SaaS goes beyond the changes in how companies deliver and license their

applications. Bessemer Venture Partners, a Silicon Valley-based venture fund, noted in its State of the Cloud 2016 study that legacy

software vendors are embracing the SaaS model enthusiastically. Legacy vendors are not only modernizing their applications, but

are also spending aggressively to purchase SaaS ISVs in order to gain access to the technology and talent they need. They spend

over $50B annually to acquire SaaS companies. Valuations for SaaS ISVs reflect the SaaS opportunity; while public legacy vendors

are valued at 3.5x annual revenue on average, public SaaS ISVs are valued at 4.9x, and private SaaS vendors at 11.2x.

According to a 2018 MDC research survey, the top 3 reasons application providers are moving to offer SaaS are:

 The creation of new opportunities to acquire new customers

 More consistent revenue streams

 The ability to implement product innovations

Over the past two years, Polaris has focused on transforming its products to a Cloud platform to gain these critical business benefits.

The following factors are driving Polaris and its competitors to move to a SaaS business model at a rapid pace:

2017 2018 2019 2020 2013 2014 2015 2016

Source: Cisco Global Cloud Index: Forecast and Methodology, editions 2013-2018 & 2015-2020

Source: Microsoft ISV to SaaS Practice Develo

ment Stud

, MDC Research, Februar

2018

Key Benefits of the SaaS Model

Moving to a SaaS model will allow Polaris to deliver better experiences to a broader range of customers. According to a 2017

Keystone survey, ISVs who developed a SaaS version of their software were able to unlock new customer segments. They delivered

significant additional value to their customers including reduced complexity and lower TCO, expanded service offerings through

the integration of new Cloud services, and improved analytics and business intelligence gained by leveraging aggregated data.

Business Application Market

During this time of disruptive global change and technological innovation, business leaders in all industries are scrambling to

transform all aspects of their businesses. They’re looking for opportunities to leverage modern digital technologies to optimize

operations, empower employees, transform products and services, differentiate in mature industries, and engage customers in new

ways. Across many industries, we’ve seen new entrants leverage technology to steal market share from established leaders, and

disrupt traditional industries and business models. In recent years we have seen Amazon disrupt the retail industry, Airbnb disrupt

the travel industry, and Uber the taxi industry. Increasingly, business leaders look to technology providers to help them gain a

By 2019, IDC predicts all digitally transformed organizations will generate at least 45% of their revenue from ‘future of commerce’

business models. What’s more, by 2020, in over half of the Global 2000 firms, revenue growth from information-based products

and services will be twice the growth rate of the balance of the portfolio.

Becoming known as a digital cloud company will improve Polaris’ long term valuation. According to IDC, by 2020, investors will

view digital businesses differently. Specific measures based on platform participation, data value, and customer engagement will

account for over 75% of company valuations.

In short, digital transformation is becoming a central strategy in modern business. It requires new skills and investment, creating a

massive opportunity for digitally savvy solution providers like Polaris. Polaris believes that moving to a SaaS model will enable the

company to significantly accelerate its business growth, provide even more value to customers and ensure a high return on

investment for Polaris shareholders.

Source: Keystone, The Shift to SaaS: A High-Value Opportunity for ISVs, June 1, 2017

Unlock new

customer segments

75%

installation time reduction

Lower customer adoption costs

Lower operating costs

Reduce technical requirements

Lower cost to serve

Reduce complexity and

lower customer TCO

30%

savings on system costs

Reduce upfront

infrastructure costs

Eliminate ongoing

customer support costs

Integrate new

cloud services

50%

integrated cloud-based

services into product

Deliver fuller features

and capabilities

Improve capabilities without

diverting dev resources

Leverage

aggregated data

10%

improvement to algorithms

Derive new customer

insights from usage data

Develop and optimize

at scale

Industry Analysis

Polaris’s target vertical industry is the freight transportation industry. This industry is forecasted to grow by over 74% between 2014

and 2022 in the United States

. The trucking industry – especially in North America – will be transformed with the entrance of newer

and cheaper technology solutions. These solutions will drive efficiencies while increasing safety and accountability throughout

supply chains. Massive change will occur in the freight transportation industry, and concurrently in the freight software industry, as

companies adopt mobile, Cloud applications.

The trucking and freight transportation industry is extremely large. Approximately 70% of all freight in North America is moved by

truck. It is estimated that US freight tonnage will increase by 28.6% by 2026. This will result in a commensurate increase in revenues

of 74.5%

The Transportation Management Software (TMS) Market

The TMS market is large and diverse. The North American TMS market leads the world due to advancements in transportation,

technical, and financial network infrastructure. This infrastructure was built over the past century, connecting over 350 million people

geographically, via the Internet and throughout numerous financial networks. The estimated value of this market is $9.2 billion.

The global TMS market is expected to grow from $9.22 billion to $19.0 billion by the end of 2020, at a compound annual growth

rate (CAGR) of 15.6%.

TMS growth highly correlates with the continued and anticipated growth of freight volumes and revenues around the world. With

an increasingly interconnected world, the industry will benefit from the efforts of optimized supply chains – driving out inefficiencies

and creating additional wealth for its participants.

Primary Vertical Segment

Freight Transportation Market Size & Business Pain

According to the American Trucking Association (ATA), revenues were over $726 billion in 2015, with the industry responsible for

transporting 81.5% of the freight in the United States. There are approximately 1.2 million freight transportation companies in the

US. 97% operate fewer than 20 trucks, and 90% operate fewer than 6 trucks. There are over 700,000 freight transportation

companies with more than 1 truck, and some 4 million trucks moving freight across North America alone.

The ATA predicts that freight tonnage will increase by 35% between 2016 and 2027, with tonnage moved by trucks forecasted to

grow by 27%.

It is estimated that at any given time, approximately 17-20% of trucks are running empty across North America. They’re either

waiting to be loaded, travelling empty trying to find another load, or backhaul trucking. In the same way that passenger airlines

gain profitability with full planes or train operators increase their yield through better operating ratios, a trucking company that

keeps its rolling stock in motion at full or near-to-full capacity maximizes its profitability. Big gains can be made in small increments

with a tightly run operation.

While there is some concern due to recent changes in the political landscape in the United States and in other countries around

the world, it is important to understand that organic economic expansion is to be expected, this fueled by population growth.

Ibid.

Transparency Market Research, http://www.transparencymarketresearch.com/pressrelease/transportation-management-systems-market.htm

12 I

bid.

In the US alone, it is forecasted that freight volume will increase by 40% over the next 30 years, driven by a projected population

increase of 70 million people (Beyond Traffic 2045 report, recently released by the US Secretary of Transportation).

Secondary Vertical Segment

Third Party Logistics (3PL) & Brokerages

Polaris’s second primary market consists of over 16,000 freight brokerages. Predominantly located in the US, this group helps

shippers optimize their supply chains through the brokering of shipments amongst competing trucking suppliers. The trucking

industry was deregulated in the 1980s during the Reagan administration. This served as a springboard for the freight brokerage

industry, with the emergence of third-party logistics (3PL) companies offering unique services to shippers across the continental US

and beyond.

Freight Companies – North America

Businesses

US CA

Revenue

USD Billion

US CA

Annual Growth

11-16

US CA

Freight Forwarding Brokerages & Agencies* 40,427 3,434 123 6 5.3% 1.9%

Local Freight Trucking 209,636 24,850 41 9 1.6% 0.7%

Long-Distance Freight Trucking 362,726 22,111 185 20 2.4% 0.2%

Local Specialized Freight Trucking 56,595 10,019 42 8 3.7% -0.9%

Tank & Refrigeration Trucking 16,633 7,591 37 11 4.1% 0.0%

Long-Distance Refrigerated Trucking 1,788 - 6 - 3.3% -

Total Number of Businesses 755,810

https://www.transportation.gov/sites/dot.gov/files/docs/BeyondTraffic_tagged_508_final.pdf

Industry Trends

There are many industry trends that are aligning to provide Polaris with several opportunities.

The ‘Uber-ization’ of the Trucking and Freight Transportation Industries

A confluence of factors – mobile technologies, online applications, the ‘Internet of Things’ (IoT) – are expected to transform the

freight industry. These factors will allow small to medium-sized freight businesses to compete more effectively with the large,

integrated freight carriers through the application of new, more nimble technologies. These flexible, less expensive technologies

will allow niche players like Polaris to participate in a very large and growing marketplace, one that’s forecasted to grow by 74%

over the next 8 years.

There are significant opportunities for TMS providers such as Polaris to capture and serve this profitable, large market and growing

marketplace. They’ll sell and distribute newer, more mobile, and more affordable technologies to companies that previously found

the costs untenable. New TMS systems that are more open and connected into other data sets – Financial, GPS, Regulatory, and

Fuel Management – will give companies richer, more detailed insight into their operations. TMS helps companies refine their

offerings while optimizing their business.

TMS enables small-to-medium players in the freight industry to find, protect, and own profitable niches in the marketplace. Over

the longer term, it will allow them to grow their businesses and build momentum. They’ll challenge the hegemony of some of the

largest freight companies in North America, who are either unwilling or unable to quickly adopt these new technologies.

Customers – Changing Demographics

The ‘New Kids on the Engine Block’

A significant transformation is occurring, a younger generation – one much more comfortable with the Internet and smart phones

– is inheriting or taking over operations of established firms. Many trucking and freight operations today materialize via pen and

paper, and through the power of a handshake.

This younger buyer is much more attuned to the possibilities of technology and understands that, in addition to helping streamline

the business, it can also provide then with a significant competitive advantage in a highly commoditized market. A substantial

portion of the industry – some with 75 trucks or more – still operates on either a paper-based system, or more commonly, a

combination of paper and Excel spreadsheets. As this younger demographic takes over from their parents, they will demand more

user-friendly, easier-to-use technologies that are accessible online and on their mobile devices.

They are more likely to demand applications that have more compelling graphical user interfaces, offering better navigation and

more automated work flows.

Regulatory & Compliance Issues

The regulatory environment plays a significant role in the industry. In the United States, the Federal Motor Carrier Safety

Administration (FMCSA) implements and enforces policies developed by the Federal Department of Transportation (DOT), within

the legislative framework provided by Congress.

Companies strive to minimize the costs of complying with industry regulations. To this end, they need automation solutions that

track information in a centralized database – a transportation management software system – that is accessible and that can provide

analytics and reporting.

Hours of Service (HOS) – Electronic Logging Device – Mandate

The Hours of Service mandate came into effect in December 2017. It required trucking companies to have an electronic logging

device in every truck by that time. TMS systems will need to be integrated with these electronic logging devices to comply with

such Department of Transportation rules.

US Federal Department of Transportation (DOT) Audits

Trucking companies are at risk of temporary or permanent suspension if they do not comply with federal regulations associated

with their equipment, driver certifications and driving behavior. These audits can be time consuming for many companies. One of

the biggest challenges for smaller trucking companies is having the time and the ability to assemble all the information of DOT

audits, not to mention the fear of suspension. TMS systems help companies save time in assembling the data, and can minimize

the risk of non-compliance.

Food Safety Modernization Act (FSMA) – Federal Drug Administration

Under the auspices of the FDA, the FSMA was enacted in 2011. It regulates the transportation of human and animal food. Its goal

is to protect foods from contamination while travelling from ‘farm to table’. Refrigerated trucks play a key role in this supply chain

– yet only the biggest trucking companies are able to provide detailed data on tracking of the temperature and location of each

truck.

New technologies are emerging in the marketplace, which TMS systems will tap into. These present opportunities for smaller niche

players to offer services only provided in the past by the bigger players. These new entities will capture pieces of the market by

specializing either in a particular commodity/product, in a geographic region, or in customer/shipper type.

Driver Shortages – Advent of Self-Driving Trucks

The average long-haul truck driver has a physically demanding job, has to travel great distances away from home and family, and

has to deal with his/her personal safety both on and off the road. Men comprise 97% of the industry, and the average truck driver

is 57 years of age.

With the aging demographic and lack of qualified, professional truck drivers, the industry foresees the advent of driverless trucks.

While this technology is still in the distant future, it does speak to the ever increasing automation in the industry.

Newer trucks are also increasingly embedded with GPS and ELD systems; hence, the ‘Smart Truck’ is becoming a reality. As such,

Polaris has made a conscious strategic decision to focus its efforts ‘from the office out’ and not ‘from the truck in’ due to the

complexities and resources involved in this industry transformation.

Optimization of Supply Chains and Operations – Big Data, Business Intelligence (BI)

With so many moving parts in a freight transportation company and so many dynamics to monitor, increasing returns to scale will

accrue only for players who generate unique insight into their operations and their markets. In other words, those who ‘know more’

and ‘know it more quickly’ will be the winners. For logistics and brokerage providers, it’s essential to make prudent business decisions

about their product/services offerings, the customers they serve, and the markets in which they operate.

Trucking companies can optimize their operations through analyses of their customers, their freight, their lanes, their equipment,

their drivers, etc. Companies will seek more detailed and nuanced information about their businesses, striving to unlock value that

may have been trapped in their operations.

Industry Consolidation

With an increasing regulatory environment, growing customer demand, management of fuel, labor and insurance costs, as well as

greater consolidation in the trucking industry, some players simply won’t be able to compete. The freight transportation industry is

evolving quickly. TMS providers will need to build platforms that provide quicker ‘just in time’ features and services that will respond

to the changing market conditions and needs of their customers.

Market Analysis

New ‘App’ Entrants

A number of emerging smaller players are building ‘great apps’, and are attempting to become the next ‘Uber’ for the trucking

industry. However, they’re finding that the complexity of supporting customers and running a business systematically and

professionally presents many challenges.

It’s evident that while these companies have developed some promising applications, they have not yet incorporated the unique

business insight required. Also, these companies haven’t surrounded their online software with the necessary operational

infrastructure.

Client Server Systems in Decline

Many of the large, existing TMS installations will gradually decline and peter out over the next few years. Meanwhile, those who

support these installations will retire or move on.

While the large trucking and logistics companies may continue to use their fully customized, on-premise solutions, there is a

secondary level of large companies that will move to the Cloud.

The early adopters will move to Cloud-based Software-as-a-Service solutions, which will help them minimize their initial capital

investment. These companies will seek agility and a competitive advantage.

‘Software-as-a-Service’ Emerging

The year 2016 was the turning point when the majority of computer applications were delivered via a ‘Software-as-a-Service’ (SaaS)

business model. The trend towards SaaS is expected to continue unabated.

While the general trend in all software markets is the movement from client server to hosted online (Cloud) applications, the TMS

industry has been slow to adopt this new technology.

Competitive Analysis

There is currently no dominant player in the industry. The market is fragmented and served by several players.

There are three types of competitors in the market:

1. Large Multi-Faceted TMS Providers

There are large, multi-faceted, heavily-integrated TMS systems that run a 250+ truck operation, offering all of the components

necessary for performance, compliance, and business intelligence. These are predominantly client server-based systems that have

been customized for individual companies. They follow a traditional on-premise licensing model, with an initial investment of

hundreds of thousands, and often millions of dollars for licensing and initial implementation. Beyond that, there are ongoing

software maintenance programs. Examples of companies serving this market are McLeod and TMW.

2. Mid-Market TMS Providers

There are many vendors in the mid-market. Some are pure play software companies, while others offer a ‘resource portal’ for

smaller players. For example, TruckStop.com’s software system ITS Dispatch integrates with its Loadboard, and is offered along

with other services and products.

Most mid-market, competitive, TMS system vendors offer a medium level of capability with client server-based software systems.

Companies included in this segment are Degama, PCS, Prophesy, Axon, Aljex, and TransPlus Software. Many of these established

players are now dealing with increasingly demanding customers who want more advanced technologies – especially EDI

integrations. They are struggling to move their solutions to the Cloud, and transform their business models and processes. Many

of their applications are built on older, less flexible software platforms, and are based on an economic model tied closely to

maintenance revenue.

3. New Entrants – Born in the Cloud

There are many new entrants to the marketplace – some with grandiose visions of becoming the next ‘Uber’, or ‘Truber’, for the

freight industry. They have employed new development technologies, creating the types of applications the industry will need in

the future. A number of these are small startups with limited industry knowledge, capital or business experience, and no previously

installed customer base.

One entrant that has stronger technology and looks to be a solid entrant to the market is Ascend Software. This company offers

an easy-to-use solution for those introducing technology in their businesses for the first time. They are backed by a venture capital

company. Ascend offers financial as well as factoring services to small trucking companies,.

Polaris’s competitive advantage is a large installed customer base, strong industry domain expertise, and a deep, fully vertical suite

of solutions that can be deployed in 30 days. Polaris’s functionality, extent of features, and price point are unbeatable in the industry.

Competitive Differentiation

Relative to these competitors, Polaris has the following competitive differentiation:

 Market Presence: In an industry where new entrants come and go with relative frequency, few players manage to achieve the

longevity required to build true market awareness. With over 17 years of business experience (through its parent), Polaris has

such a market presence. In the highly competitive IT industry, this market presence translates directly into an ability to source

new prospects more easily and more cost effectively than its competitors. Polaris is also better able to compete on a non-price

basis, resulting in higher margins.

 Industry Expertise: A key factor in meeting customer expectations is the ability to provide industry-specific solutions, either

‘out-of-the-box’, or by way of customization. Polaris has both the depth and breadth of expertise to provide these solutions

to the transportation industry.

 Ability to Scale: The Polaris team has many years of cumulative technology industry expertise, in addition to high-volume sales

process expertise. Unlike its competitors, the Polaris team knows how to package, simplify, and apply a volume selling process

and strategy to the new Cloud business model. The team can quickly scale sales and marketing and shorten the sales cycle.

Most other technology providers are slow to transform their current sales and marketing processes from a traditional, on-

premise and perpetual license model, to a rapid customer acquisition cycle and short deployment time frame.

Directions: Product and Services Offerings

This section is an overview summary of your product and/or services offerings. You should describe the benefits

secured by your target customer, and unique features or proprietary aspects of the offering (do not list every product

or service offering, nor detailed features – those belong in an appendix).

Describe:

 The value and benefits of all of your products/services in order of highest to lowest sales, or highest to lowest

importance of product line; include any proprietary knowledge, IP or skills

 Your pricing strategy, costs, and profit margin for each product/services line

 The stage of growth your product/services are in (introductory, growing, mature); the stage of product/services

development (existing, beta)

 The unique, value-added characteristics of your offering, and how these create a competitive advantage

 How your services offering is provided – direct, through partners or contractors – and how service levels are measured

and maintained

 Your plans for future or next generation products – what and when

 Customer quotes

 Your product and services strategy in terms of the future offering roadmap, and the big picture context of what the

offering will become

See sample copy below & delete this table when template is complete.

Product and Services Offerings

Polaris Transportation Software Solution

Polaris’s software helps companies centralize all the data associated with running a trucking and/or freight brokerage company. Its

suite of software applications and services serves as the hub of a freight business, linking the data from Operations and

Administration departments, while connecting to complementary technologies.

Transportation companies must continually track data and information on all of the essential elements of the delivery: truck, trailer,

driver, freight, condition of the freight, pick-up and drop-off locations, taxes, insurance, invoices, and remittances. This effort can

be complex, and at times, overwhelming for these companies, especially smaller ones.

The Polaris Software Brand

Polaris’s product brand “North Star Guidance” speaks to the small-to-medium players who cannot afford custom solutions and big

capital investments in IT or servers, and who have a small or non-existent IT department. It helps those companies daunted by

regulatory requirements and increasingly complex demands of shippers and customers expecting ‘just-in-time’ information on their

freight. It allows small-to-medium transportation companies to compete with national and international competitors with greater

capital, resources and distribution.

Polaris also offers Office 365 to facilitate office productivity, collaboration and mobility, thereby allowing small trucking firms to

modernize their workplace.

North Start Guidance is designed to extend the best-of-breed Microsoft Dynamics 365 Business Central product; thus, it effectively

meets the specific needs of the trucking industry.

Polaris is currently developing an IoT solution to facilitate truck and delivery monitoring, as well as a field service module to optimize

routing and scheduling. Also in development are several other Azure-based solutions to streamline and extend the core

functionality of Polaris’s current solution in order to meet the unique needs of the trucking and brokerage industries. Polaris is also

actively working on a new driver safety monitoring solution.

Product Innovation Direction

In addition to implementing its core solution, Polaris will integrate with other applications on a continuous basis to build out the

Polaris Application Eco-system. Polaris will place itself at the intersection of complementary Cloud technologies – by coordinating

with GPS and ELD providers. Connecting to or re-selling pre-built other Microsoft-based ISV solutions will allow Polaris to offer a

high-value, end-to-end, comprehensive industry solution to its target customers. Polaris will also provide new offerings based on

Power BC and Microsoft Azure services.

Services

Polaris supports its customers through several mechanisms – weekly live online training webinars, a Customer Success (support)

group, training videos, and self-help documentation, and will continue to build out its service offering with the aim of providing

customers with more automated, self-serve options and value add service offerings. Polaris also offers implementation services

through local implementation partners in key geographic regions, and the Company plans to begin expanding globally outside the

US market within the next 2 years.

In 2019, Polaris will develop and launch an Enterprise-level solution set leveraging the Microsoft Dynamics 365 suite of products.

Polaris will also offer a set of packaged deployment services.

Development Strategy

The Polaris development strategy focuses on lean and agile processes, using a minimum viable product strategy to take new apps

and functionality to market with minimal investment and risk.

Continuous development cycle:

1. New idea

2. Build

3. Measure results

4. Gain new ideas

In terms of planning:

5. Determine what we need to learn

6. Determine what metrics are required

to test assumptions

7. Determine which product to build as

an experiment to get metrics

The development goal with all new product and service offerings is to travel through the Build-Measure-Learn loop as quickly as

possible to prove out our assumptions, and quickly identify market opportunities and new minimal viable products. We will question

all assumptions in the strategy, and then design experiments that will generate data either supporting or disproving these

assumptions. Experiments can involve new features, marketing A/B testing, customer interviews, etc. We then decide whether we

progress with the strategy or pivot. Pivots can be big (new product, new market), medium (same product, different market), or

small (feature X vs feature Y).

The vision for Polaris’s application is to put it at the intersection of key technologies and datasets that offer small-to-medium sized

trucking companies and freight brokerages the ability to compete with larger, multi-faceted competitors. The Polaris product

pathway outlines the key integrations and utilities to be added to the application on a quarterly basis. Polaris will leverage existing

ISV solutions where possible, and build the rest. This includes applications from the following areas:

 Portals – customer, carrier, driver

 Compliance and safety

 GPS and Hours of Service – ELD

 ACE/ACI – automated border clearance

 EDI

 Refrigeration trucks – temperature tracking and monitoring

 HR administration utility

 BI – business intelligence

 CRM utility – enhancements and integration

 Data transfer and migration utilities

 Websites

“We were able to adapt the Polaris platform with ease and the learning curve was short. The system has a lot of

functionality and the support we receive is excellent! We have been able to quickly scale our operations. We increased

our fleet by 100% without needing to increase our head office staff count. I would definitely recommend Polaris!”

Alan S., VP, Pacific Trucking

“Polaris has truly given our organization the capabilities and confidence to compete against multi-billion-dollar

corporations and win. Thanks for doing such a great job with your team and your solution.”

Patrick C., President, Big Solutions Freight Services

Directions: Marketing Strategies & Sales

This section details how you will present and communicate your offering to a pre-determined market segment in a

compelling and differentiated way in order to capture attention.

You will need to:

 Articulate your marketing goals

 Fully describe the market segment(s) targeted and their unmet needs

 Identify how you will position your offering to prospective users in relation to the competition

 Show how you’ll position your offering to induce channel partners to sell your solution (if applicable)

 Offer a SWOT analysis of the strengths and weaknesses of your company as well as its external threats and opportunities

 Outline your pricing and provide supporting information as to why it will be effective with your target customers; explain

the pricing structure - tiers and bundles

 Describe your go to direct or indirect market approach – sales team, online, OEM, use of VARs or distributors, referral

or affiliate programs, 3rd party consultants, system integrators, online Marketplaces (AppSource, Azure) and more

 Explain how you will introduce and promote your offering to the marketplace, and what marketing tools and activities

you will use

See sample copy below & delete this table when template is complete.

Marketing Strategy & Sales

Target Market

Polaris currently serves trucking companies with 10-80 trucks, and freight brokerages with 10+ agents. Additionally, Polaris uniquely

serves those companies trying to run both at the same time – a trucking company with a brokerage division, or a brokerage

business with some trucking assets.

Polaris is looking to aggressively expand its target market parameters to include Enterprise market customers. With a more robust

and expanded Enterprise tier that will offer integrations to other technologies, Polaris will increase its attractiveness and value

proposition to larger and larger customers. As the breadth and depth of the application increase, so too will the volume and size

of its customer engagements and associated project and support services.

Positioning

Polaris is positioned at the tipping point where individual entrepreneurs or single proprietorships are ready to take the big leap

into expanding their business. This could be a small business of 3-5 trucks with visions of growing to 50 and beyond. On the other

hand, it could be a forward-thinking broker teaming up with another broker with hopes of taking a company with two or three

agents up to 15 or 20. Polaris offers a sophisticated software solution that allows small to mid-size companies to reach critical mass,

and then scale beyond that. This segment of the market is very attractive to Polaris, and adding new users in a SaaS model will

happen at an accelerated rate due to the rapid growth and expansion of this market. It is much easier today for a small brokerage

firm to double its number of employees and users in one year.

This dynamic will create divergence in the TMS software mid-market; Polaris will leverage its head start in the Cloud while

competitors cling to their existing models, drop out, or start the long journey by themselves.

Sales Strategy

Polaris sells its solutions directly to end user customers, as well as through implementation partners.

Polaris employs four marketing and sales professionals. The marketing team qualifies leads and responds immediately to incoming

prospective customers. Hot, qualified leads are then passed on to the sales team, who will pursue these leads or begin a three-

month digital marketing nurture program (for those prospects early in the decision-making cycle who are not yet ready to buy).

Polaris is employing an aggressive migration strategy to move its current installed base of on-premise customers to the new Cloud

platform and offerings.

One of Polaris’s goals is to reduce the average sales cycle from the current 6 – 9 months down to 30 – 90 days. The SaaS model

leads to accelerated sales by making it easier for customers to find and access Polaris’s trials, and explore the potential value of the

product offering. Cloud marketplaces like Microsoft AppSource provide Polaris with a straightforward platform to showcase its

software, eliminating the need for complex software demos and environments.

Pricing

The company’s core business applications are packaged and offered on-demand, on a monthly subscription basis. There are three

tiered offers: Standard, Pro, and Enterprise – priced at $79, $139 or $219 per user, per month, respectively. These tiers offer a

successive level of capability and integration options, designed to match the way a freight business typically grows and evolves. In

addition, each tier bundles various levels of support.

Competitors charge significantly more per month for the use of their software. They also require customers to pay high per-hour

rates for customization, integration and configuration services to achieve the functionality Polaris offers out-of-the-box.

Customers can secure more favorable pricing through longer contract commitments and increasing volumes (# of users).

At Polaris, deployment and customer support services are offered in a fixed packaged price model.

Best Value

North Star Guidance

Standard

North Star Guidance

Pro

North Star Guidance

Enterprise

$79/mo

$139/mo

$219/mo

Free Trial

Like many SaaS companies, Polaris offers customers a Free Trial of the software for 15 days via the Microsoft AppSource

marketplace. Customers can determine for themselves the value the application can bring to their businesses. Customers can

continue with the service at the end of the trial by licensing the solution. For more complex Enterprise-level customers, Polaris’s

sales team conducts guided, customized trials for customers.

Polaris also offers a library of 1-5-minute self-running demos of core functionality, based on buyer persona, so prospective

customers have control over their own buying journey.

Sales and Marketing Goal

Polaris’s goal is to generate 1,000 new subscription license users by December 2019.

Over the past year, Polaris invested in creating and launching its new brand and website, and re-positioned its solutions as modern

Cloud-based solutions. The positioning of the ‘North Star Guidance’ brand speaks to the needs and desires of small to medium-

sized businesses. This group often feels the odds are stacked against them. They find it difficult to compete in a marketplace with

an increasingly active regulatory regime, driver shortages, and increasingly complex customer demands.

Marketing Strategy

Polaris’s marketing strategy and investment in marketing and sales assets are

intended to educate buyers on why they need to invest in technology as a

means to gain competitive advantage. Marketing is inbound rather than

outbound focused. Content and messaging focus more on the needs and

business pains of the trucking and brokerage industries than on product

features and functionality.

Polaris is leveraging its industry domain expertise and showcasing its thought

leadership in the industry. Polaris is utilizing both traditional marketing and a full digital strategy.

Polaris’s marketing campaigns and activities are not only focused on acquiring NEW customers, but also on upselling, cross-selling

and ensuring high annual renewal rates. Polaris knows that low churn rates are the key to high revenue growth and decreasing

sales costs. Polaris is also investing in and building out a ‘customer advocacy’ program, which is aimed at nurturing existing

customers, securing referrals and ensuring high renewal rates.

The Internet has transformed buyer behavior. It has tipped the power and control in the buying process from the salesperson to

the prospect. Research indicates buyers want to remain anonymous and do not make themselves known until they are more than

halfway through the buying journey. They are self-educating on the Internet, reading blogs and reviews, downloading software,

and only providing their email or phone number when they are ready to buy. Polaris is therefore rapidly changing its sales and

marketing content and strategy to better align with the needs of this new Cloud buyer.

Polaris is focusing on digitizing the sales cycle by providing self-running demos, free trials, packaged pricing on the website,

educational videos on YouTube, and blogs that cover industry trends and developments.

Polaris will align all marketing campaigns and content with the buying journey and invest in the following key activities:

 On-page search engine optimization (keyword research, keyword placement, title tags, meta descriptions, content layout, etc.)

 Off-page search engine marketing (article writing, link building, press releases, etc.)

 Social media setup, training, and ongoing management

 Proprietary content creation (eBooks, guides, white papers, case studies, landing pages, new products, blogging)

 Multi-media content creation (webinars, videos, infographics, slideshares)

 Nurture marketing (email campaigns to nurture leads)

 Marketing automation

Persona Based Marketing

Explore

SEO & Content

Social media

Blogs

White papers

Social selling

Educational videos

Evaluate

Email campaigns

Telemarketing

Events (online and in

person)

Videos

Product trials &

demos

Purchase & Expand

Sales presentations

ROI tools

Case studies

Offers & Incentives

Account management

Renew & Advocacy

Social media

Public relations

Referrals

Email marketing

Educational content

Inbound

Marketing

Approach

Content thought leadership

2 way communication

Search engine optimization

Advocacy program

Educational assets

Polaris has extensive domain expertise and knows the

trucking and brokerage industry buyers’ needs intimately.

Therefore, it can design marketing assets and landing pages

that speak to the specific needs of three key buyer profiles

or ‘personas’. The WHY persona is the business owner who

is motivated to increase margins, grow revenue, and

decrease risk and costs. The HOW persona is a mid-level

manager responsible for the day-to-day operations of the

business. This persona is concerned about safety,

scheduling, following process and protocols, on-time

deliveries, customer service levels, and efficiencies. Finally,

the third persona, the WHAT persona, is the person in the

organization who is responsible for the technology buying

decision. He/she is concerned about the platform, cost, what

the product can and can’t do, security, and more.

Simplicity as a Core Differentiator

By offering SaaS solutions, Polaris sets up customers much more rapidly, and can do so with limited infrastructure and configuration.

Some Cloud software vendors have reported an up to 75% reduction in installation time. Polaris is re-aligning its deployment

process to guarantee customers they can be up and running in 30 days. The software industry has traditionally made it complicated

for customers to buy from them, and time and materials proposals have lengthened this buying process. Trucking and brokerage

industry business owners are NOT technologically savvy. They have a pre-conceived belief that technology is expensive,

complicated, and difficult to get up and running. They fear that an investment in a new core business system will be expensive and

will require valuable resources. Unlike any competitor in the industry, Polaris plans to de-mystify and simplify the business process,

thereby reducing customers’ perceived risks and fears.

Polaris SWOT

STRENGTHS WEAKNESSES

 True Cloud-based application – hosted SaaS

 Engaging brand – ‘North Star Guidance’ – aligned to

broadest segment of the market

 Existing customer base of 1200+

 Product breadth – combined trucking and freight brokerage

application, ‘all-in-one’ solution

 Digital marketing capabilities

 Optimized vertical industry solution

 Low cost of support leveraging digital ‘Customer Support’

infrastructure – live webinars, videos, self-help documents

Extensive integration that expands product reach and

partnerships

 Strong company culture – tight team – supportive

commitment of staff – ‘noble mission’

 Domain expertise - years of industry insight in both

brokerage and trucking industries

 Capital

 Technical resources – need more

 Limited sales resources

 Older billing processes

 Lease ends in 2018 – potential move

 Low brand recognition

 Limited to North American market

OPPORTUNITIES THREATS

 Mid-market TMS competitors are behind – just beginning to

move to the Cloud

 Competition has much greater legacy infrastructure or is

immature in terms of a SaaS business model

 Changing buyer demographic more tech savvy

 Industry trend towards automating manual processes –

shared data

 Surrounding technologies are all moving to SaaS – GPS,

ELD, ACE/ACI, BI, CRM

 New regulatory requirements – border clearances, safety,

hours of service – helping drive the need for new TMS

features

 High labor costs

 Shortage of technical talent

 Regulations, political unpredictability in US

 New competitive entrants

 Fewer barriers to entry

 Commoditization of ERP, CRM and other business

applications, forcing rapid innovation

 Increasing security risks

New Product and Services Strategy

As discussed in the product strategy section of this business plan, Polaris will continue to invest in developing and offering add-on

functionality and apps, as well as building out a full enterprise suite of Cloud offerings and Azure-based intelligent Cloud services.

These will address specific business pains and issues affecting the trucking and brokerage industries – especially for Enterprise

customers.

Over the course of the next year, Polaris will also develop a series of recurring monthly service optimization offerings tied to

automating business workflows and processes. For example, Polaris will provide enhanced insight and reporting using Power BI,

integrate with Office 365 and more. This reporting or analytics as a service will be charged monthly.

Polaris has also identified recurring services possibilities that leverage the Microsoft Azure suite of products and services, which can

offer added value to customers. For example, customers could subscribe to a daily driving conditions forecast service and AI-based

route scheduling and optimization service.

Go to Market Channel

Polaris sells directly to its North American market through its own website, as well as through an internal sales force that will be

equally split between SMB and Enterprise tiers.

The Polaris compensation plan is based on a combination of base salary and commission (with different percentages tied to

recurring revenue targets) that is commensurate with industry standards.

To further pursue the opportunity outlined in this plan, Polaris will recruit two new sales personnel, as outlined in the Financials

section (see dispersion of funds). These new sales professionals will focus on streamlining the SMB segment sales process. The

existing sales force will be redirected to the new Enterprise tier segment, and will focus on securing large Tier 1 deals as well as

associated implementation project services.

Further, a customer success team will be formed to focus on upselling and cross-selling solutions to the company’s installed

customer base. This customer success team will also be responsible for ensuring customer renewals, and for identifying upsell and

cross sell opportunities as well as future innovative subscription services offerings.

Promotional Strategy & Monthly Campaigns

Polaris allocates 10% of its overall gross annual revenues to marketing, including salaries.

In addition to the strategies already identified, Polaris will employ a systematic nurture campaign process targeted at prospective,

current, and former customers. The goal will be to deliver relevant, timely, and engaging communications that will trigger customers

to do one of the following:

 Sign up for a trial

 Convert from a trial to a sale

 Convert from a lower tier to a higher tier

 Add users

 Become re-engaged after having churned

 Purchase additional value-add subscription services

 Provide ROI-based testimonials and case studies

Directions: Operations

In this section, you will outline the processes used to produce and deliver your offering to the marketplace. You

should include information related to location, systems, development, production, logistics, etc. Be sure to carefully

link the design of your operations to the goals of the business and marketing plan.

Specifically, you should do the following:

 Describe the scope of your operations, and include details of what you do in-house and what is outsourced

 Explain what specific systems you need to deliver your product/services – billing systems, deployment services,

client management, web or online systems, and more

 Describe your hiring plan and review employment contracts for key employees such as designers, marketing

experts, consultants and the like

 Indicate what your facility or office needs are

 Think of the operating plan as an outline of the capital and expense requirements your business will need to

operate from day to day

See sample copy below & delete this table when template is complete.

Operations

Strategy

The thrust of Polaris’s operations plan will involve positioning the company to accelerate its growth, effectively expanding into new

markets, and scaling the organization.

The operational success of the business depends on four core processes that will be continuously refined:

 Product and service quality, repeatability - application usability and customer satisfaction – user retention

 Innovating and expanding product capabilities – product development path

 Offering value-add and optimization services – hiring key resources with domain expertise

 Driving customer acquisition and retention – modernizing and improving internal sales and marketing processes

 Growing recurring services revenue – shifting to a packaged fixed price, recurring billing process

Operational Plan 2019

Polaris will invest in the training of existing resources. In addition, it must streamline and adapt many of its existing implementation

and support processes to be fully Cloud-relevant.

The following plan shows which strategic actions will be initiated and when. Each is designed to contribute to the 4 core operations

processes listed above:

Offer the First of Three New Services Offerings

Polaris will launch 3 new services offerings in 2019, one per quarter. These will be designed to drive recurring

revenue.

Increase Sales Resources

Polaris will hire two additional salespeople to drive sales in the two target verticals: trucking and brokerage

firms. One will be hired in the first quarter and the other in the second.

Increase Cloud Competencies

Polaris currently employs 10 young, smart developers who live within 5 miles of its facility. They are led by

two long-term technical leaders. Polaris will hire three additional resources to complement the core

development team and investigate outsourcing key development projects to a Microsoft ISV development

center. Polaris will invest in Cloud readiness training and skills development for this team.

Accelerate the Sales Process with New Sales Enablement Assets

Polaris will run monthly marketing campaign programs targeted at key industry segments tied directly to its

product pathway. Integrated campaigns will be launched to maximize conversion.

Polaris will also hire one additional marketing resource to develop customer success stories, and build a

series of sales enablement assets including videos, demos and blogs.

Polaris will incorporate video into all aspects of the application and its operation to simplify and improve its

support, marketing and customer communications. Investments will be made towards a more integrated

marketing automation and reporting process, which will dynamically update marketing and sales results.

Polaris will enhance its brand and extend its reach by building out its YouTube channel called Fleet Flix.

Through this channel, Polaris will promote its products and services and offer support and training to its

customers.

Polaris also plans to launch a transportation-focused monthly podcast on Spotify and iTunes to educate the

industry on key trends and changes, and to position the company as a thought leader.

Accelerate Speed of Deployment

Polaris will accelerate deployment time through the following initiatives:

 Staff training on the latest Microsoft Cloud technologies

 A revamping of traditional implementation processes to be more streamlined and remotely deliverable

 A revamping of the support function to support the latest Microsoft technologies on an ongoing basis

 Training the support and professional team to more effectively cross-sell and upsell additional offerings

 Deploying continuous innovation

 Offering fixed price implementation services packages

Secure the Base - Customer Migration Program

Polaris will continue to transition the rest of its existing on-premise customers to the Cloud offering. The

transition will occur over a two-year period, starting in the 3rd quarter.

The goal is to retain as many customers as possible, and to ensure a smooth transition to Polaris’s new online

applications and recurring license model.

Polaris will offer a tiered discount or incentive program, depending on when customers want to move. The

earlier customers move, the greater the incentive. The later they wait to convert, the lower the savings since

more value has been built into the application in the intervening period.

Polaris aims to communicate to customers a fixed date after which point in time it will no longer provide

updates and new releases to the current on-premise product.

Polaris will also provide three fixed time and price migration packages for its customers so as to reduce

customer costs and perceived risks.

Launch New Enterprise Solution

Polaris’s online application is currently offered only in Standard and Pro Tiers. By the end of the year, Polaris

will launch its Enterprise Tier, which will add the following services to the core application:

 Customer portal

 Link to FMCSA site (carrier certifications and monitoring)

 GPS integration

Polaris has a significant number of customer opportunities (120+) in the pipeline waiting for a true online

TMS that is integrated with key technologies.

Build a Customer Success Team

One new professional services team member will be hired to sell new services to the current installed base

of customers and to further penetrate the user base. This customer success manager will identify new

optimization services the company can sell, and will focus on building customer retention and advocacy.

A customer loyalty program will be launched, which incentivizes new Cloud customers to participate in

referrals, case studies and PR opportunities.

This customer success manager will also be tasked with ensuring that customers have a measurable, high

rate of return on their investment, and that each new customer is referenceable, with quantifiable data for

case studies and marketing assets.

Directions: Financial Projections

In this section, you will show how the key components of the plan lead to the projected financial results. You need

to consider who your financial audience is – lending institution, investor, internal management committee – as this

will dictate your focus. A lending institution will focus on the borrowing and debt servicing capacity of your business;

investors will evaluate the projected rate of return on funds; and an internal management committee will compare

your anticipated rate of return, benchmarked to competing projects seeking funding. You will need to include a

strong, well-constructed set of projected financial statements for at least the next three years.

This section should outline the following:

 The capital investment required and how you intend to allocate these funds

 An operating forecast providing an estimate of the sales and expenses your business will incur for the next three years

(include assumptions and sources in an appendix)

 The break-even point in dollars and units for your business (the point at which your business expenses match your sales or

services volume)

 A complete set of financial spreadsheets for a three-year period: cash flow, income statement, balance sheet (in appendices)

 Identification and mitigation of risk factors

See sample copy below & delete this table when template is complete.

Financial Projections

Investments and Dispersion of Funds

The Company seeks $1,250,000 in debt financing, which will bear interest of 15% per annum and provide for a bonus payment of

10% on payout, which is expected within three years. The funds will be used to expand and scale sales and marketing efforts, as

well as to develop new Cloud-based solutions for the transportation and brokerage industries.

These funds will be invested in the following key areas of the business:

Specifically, the proceeds of funds will be applied to the following initiatives:

1) Build and Solidify Development Team & Build Enterprise Tier Solution - $375,000

Add 3 full-time technical resources to the team

Complete 20+ product integrations – GPS, ELD, EDI, CRM, and BI – to attract larger customers.

This activity will enhance the functionality and power of the Polaris platform, increasing the value proposition of Polaris’s Enterprise

Tier. It will attract new customers from TMS competitors who desire to move to a Cloud-centric platform.

2) Build Out Modern Marketing Content and Execute Customer Acquisition Campaigns - $75,000

Develop and implement a comprehensive, automated marketing motion to automate lead generation and ongoing customer

communications. This is designed to either convert, sell additional products and services, or increase usage by jumping a tier. This

includes new video and other marketing content.

3) Marketing Programs – Establish Dominance in TMS Mid-Market - $350,000

With a growing and capable platform, combined with a Marketing Campaign Engine, Polaris will drive towards market dominance

in the mid-market. Polaris will also drive systematic and consistent lead flow to its business through a combination of digital

marketing initiatives.

This budget will run at $30,000 per month, of which 80 to 85% will be directed to modern digital marketing activity. This will assert

dominance over several other mid-market TMS systems, who still predominantly rely on referrals, traditional long sales cycle solution

selling and expensive event-based marketing approaches.

Marketing

37%

Sales

22%

Development &

Delivery

36%

Operations

Capital Investment

Marketing Sales Development & Delivery Operations

 Online search initiatives will include Capterra, Google, and Bing

 Social media – LinkedIn, iTunes, YouTube, Facebook

 Public relations – production of a book leveraging existing blog content and ongoing thought leadership to raise the profile

of the company

 Industry specific tradeshow participation, conferences, speaking engagements – Great American Truck Show (GATS),

Truckworld

4) Hire 2 Additional Sales Personnel – Acquisition of Customers – Generate More Sales – $150,000

Hire two junior inside salespeople with significant outbound capability to convert leads to SaaS sales. This group will chase trials

and leads that aren’t assigned to the Enterprise sales group.

Currently, two full-time salespeople are responsible for both renewals and acquiring new customers. With the launch of the

Enterprise Tier, we expect larger, more multi-user deals to occur. The two existing, experienced salespeople will work on key target

opportunities to (1) convert them to the new application, or (2) renew their subscription contracts.

5) Hire Customer Success Manager – $90,000

An individual with strong process and domain expertise will be hired from within the industry to drive high customer lifetime value

and high renewal rates.

6) Build Out ‘Fleet Flix’ YouTube Channel – $35,000

Polaris will work with internal and external industry experts to build a series of industry specific educational videos and educational

content which will increase online engagement, bias prospects toward Polaris and assist in converting more web visitors to

prospects.

7) Move to New Facility – $35,000

It is anticipated that Polaris will need help in finding, designing, and setting up a new location, which is required to facilitate the

anticipated growth over the next 5 years. A tentative date is set for June 2019.

8) Licensing of internal new software systems - $30,000

This involves investments into streamlining the internal billing system, marketing automation, trial tracking software, video hosting

and reporting system.

9) Partner Development Initiatives – $40,000

Building out the product platform and creating a reseller and referral network for the application will require some in-person

meetings and travel. Some expenses for tradeshows and for peer-to-peer discussions with executives will also be required. These

will involve trips to attend tradeshows, meetings with companies (pre-arranged), and attendance at Microsoft Inspire and other

industry events.

10) Build Platform and Mechanisms to Facilitate Migration from Competitive On-Premise Applications – $40,000

Polaris will continue to build and refine mechanisms to help transfer data from competitor platforms. This will entail investment in

some intermediary technology that facilitates this transfer, and/or the engagement of a third-party service provider.

11) Cloud Training – $30,000

Polaris will invest in training team members on Cloud business processes and technology.

Summary Financial Projections

The financial plan outlines the projected 2018 sales of $3,367,870, equating to a gross profit margin (GPM) of nearly 60%, a SaaS

GPM of 73%, and net margins of approximately 40% before tax. Polaris expects to steadily grow across all of these

measures over the next three years, and easily meet its debt servicing load and discharge date. Other expenses are budgeted as a

percentage of revenues, and are in line with industry ratios. The important results of the financial plan are summarized in the

following table, and a full set of pro-forma financials can be found in the Appendices section.

2017 (Actual) 2018 2019 2020

Revenue ($) 2,754,887 3,367,870 8,414,740 10,009,593

Operating Profit ($) 1,270,003 1,606,099 5,915,562 7,407,099

Total GPM 46.1% 58.3% 70.3% 74%

SaaS GPM 55.9% 73% 83.8% 86.1%

Risk Factors

The Company operates globally in a dynamic and rapidly changing environment that involves numerous risks and uncertainties.

The following section lists some, but not all, of these key risks and uncertainties, which may have a material adverse effect on our

business, financial position, results of operations or cash flows.

M&A Risk: If we choose to pursue an M&A growth strategy, we will need to merge and integrate disparate systems, facilities,

business cultures, financial systems and reporting cycles in order to reap the benefits of the target acquisition or merger. This

activity will also potentially require an unexpected amount of extra funding, or may result in disruption to our business due to

management diverting attention elsewhere. There is also a risk of inheriting unexpected contingencies or liabilities. Insert your

strategy to overcome this risk here.

Long expensive development cycles: Because our solutions are complex and require extensive product testing, development

cycles can take months. Although we are working towards moving to a continuous development cycle, we may not have the

resources available, in the short term, to complete the development of our new, enhanced or modified Cloud solutions in timely

fashion, or we may incur significant, unexpected costs before we are able to attain revenue from these new solutions, putting us

in a difficult cash flow position. Insert your strategy to overcome this risk here.

Lack of capital and insufficient resources: We may not have enough funds, or the technical resources or capabilities required to

build competitive Cloud solutions in order to stay ahead of competitors.

Market failure: We may invest substantial resources into the development of our new Cloud solutions but not achieve our desired

and expected levels of market success and revenue.

Fixed project price exposure: Our business often involves long-term, large complex projects. As we begin to offer fixed price

packaged service offerings, there will likely be an increase in profit margin risk due to the increase in uncertainty regarding clients’

environments and capabilities, and our projects may unexpectedly change in scope or duration, leading to increased costs.

Variable sales cycle: Our sales cycle is variable and can take many months. It depends upon many factors outside of our control,

and requires us to commit significant time and resources prior to generating any associated revenues. Some deals end in a no

decision to purchase. Although we are investing in shortening this sales cycle and lowering our costs related to customer

acquisitions, the typical sales cycle for our solutions requires a pre-purchase evaluation by several internal decision makers at

different levels within the organization. A comprehensive RFP or evaluation process will frequently also include outside

competitors. Our sales cycle for new customers is typically 6-9 months, but can extend longer. We spend substantial time, effort

and money in our sales efforts without any assurance that such investment will result in a contract with accompanying revenue.

High cost of technical resources: Investment in highly-skilled research and development as well as customer support team

members is critical to our success. Our ability to develop and enhance our solutions, and to continue to provide value add

services and excellent support is highly dependent on the quality of the people we hire. Keeping our solutions ahead of the

competition requires that we hire skilled and competent technology professionals. Skilled technology professionals are in high

demand and in short supply. If we are unable to hire or retain qualified technical personnel to develop, implement and improve

our solutions, we may be unable to meet the demands and requirements of our current and future customers. The cost of

salaries and benefits are rising and competition for talented technical people is increasing, resulting in an escalation in resource

costs, which may ultimately affect our profitability if not accompanied by the expected increase in revenue. One strategy to

mitigate this rising cost of talent is to contract qualified technical resources abroad in the Ukraine, India and elsewhere. This,

however, introduces additional new risks related to time zones, cultural differences, language, accountability, and more.

Failure to manage rapid growth: Not being able to keep up with organic or non-organic accelerated growth could negatively

impact our business. Demand could exceed our ability to deliver in accordance with our high standards of product and service

quality due to a lack of operational, financial or key human resources. To manage our anticipated future growth effectively,

we need to continue to invest in improving and streamlining our information technology infrastructure, financial and accounting

systems and controls, as well as our sales and marketing systems; we also need to effectively manage our expanded operations

and employees in geographically distributed locations. Further, we must invest effort into continuously attracting and hiring new

qualified personnel in areas of sales, marketing, professional services, and software engineering, in addition to retaining those we

employ today. Onboarding can often take up to 6 months. Our failure to manage our rapid growth effectively could have a

material adverse effect on our business results. Expanding the business too quickly could also lead to increased financial risks if

the expected accompanying revenue does not follow at the same pace.

Customer Retention: Because the long-term financial returns for a Cloud business hinge heavily on customers renewing their

subscriptions and purchasing additional ones, any material customer ‘churn’ will negatively impact overall financial results. To

mitigate this risk, we plan on bolstering our customer service and nurture marketing capabilities as well as hiring a customer success

manager with the capital raised.

Dependence on too few customers: Currently, we have a dependency on too few large customers from whom we generate a

significant amount of our revenue. 80% of our revenue comes from 20% of our customers. We will need to expand our installed

customer base to mitigate this risk.

Revenue dependence on existing installed base: We currently depend too heavily on repeat product and service revenues from

our existing base of customers. We will need to continue to invest in new customer acquisition to mitigate this risk.

Liability claims: We may inadvertently be liable to our clients for damages caused by a violation of intellectual property rights, the

disclosure of confidential information including personally identifiable information, system failures, errors or unsatisfactory

performance of services. We have secured D&O insurance as well as other key insurance policies, but these may not be enough

to cover all potential damages. We are also always at risk of unauthorized parties, employees or subcontractors potentially

attempting to misappropriate certain intellectual property rights that are proprietary to our clients, or otherwise breach our

clients’ confidences without our knowledge. What’s more, a failure in a client’s system or any breach of security could result in a

claim for substantial damages against us, regardless of our degree of responsibility for such failure. We have invested in

advanced detection, prevention and proactive systems to minimize these risks. Errors performed by employees in the due course

of their work for a client could also result in a client terminating our relationship or worse, seeking damages from us. The

software industry is also characterized by the existence of many patents and frequent claims and related litigation regarding

patents and other intellectual property rights, which pose a risk to our company.

Compliance with GDPR and others: Personal privacy laws have become a significant issue in the United States, in some European

nations, and in many other countries. The protection of customer data is essential for our company’s survival. However, with the

increase in privacy law requirements around the world, staying compliant is becoming increasingly complicated and expensive.

We will do our best to invest in measures that ensure we stay compliant with new requirements and avoid penalties. We have

taken many steps to protect our clients and their data, to protect against data breaches, and to be more stringent about how we

obtain the consent of our clients and prospects.

Consolidation in the industry: M&A activity in our segment in the technology industry is accelerating. Large companies are

acquiring smaller ones, and many are joining forces via merger. One of the threats to our organization is that we will have much

larger competitors with more resources and capital entering our vertical market. However, this also creates an opportunity to be

acquired by a larger competitor at a later point in time, potentially providing our shareholders and investors with a liquidity event

or a high return on their investment.

Shrinking target customer base: There is significant consolidation in the trucking and brokerage industries, reducing the number

of potential customers we can target and thus intensifying competition for those fewer customers. This will also put pressure on

our firm to launch a new larger, more robust enterprise solution in the next 12 months.

Customer Acquisition Costs: As detailed earlier, acquiring customers for Cloud solutions requires a significant investment in sales

and marketing capacity. Should these investments not generate the volume of customer additions anticipated, customer

acquisition costs will be higher than expected relative to the revenue generated, resulting in a greater than anticipated cash flow

deficit. To mitigate this risk, we have allocated the capital to reflect what we feel is required to withstand such an event.

Adverse Economic Conditions: Although demand for Cloud solutions is currently strong and growing, adverse global economic

conditions could negatively affect this demand, resulting in financial projections not being met. There is also the distinct possibility

the Company will face price pressure from competitors seeking to establish themselves in our target markets. Competitors could

buy market share at predatory prices, lower than can be sustained over the long term. To mitigate this risk, we will engage in swift

execution of this business plan once the needed funds have been raised.

Service Disruptions: Cloud solutions must be available 24/7/365, and any service disruptions will negatively impact our business.

In addition, as with data security and privacy, we rely on 3

party suppliers to provide our customers with continuous access to

their applications and IT infrastructure. Catastrophes can be caused by various events, including amongst others hurricanes,

tsunamis, floods, windstorms, earthquakes, tornados, explosions, severe weather conditions, as well as fires. Moreover, acts of

terrorism or war could cause disruptions in our or our customers’ businesses. The risks associated with such natural disasters and

catastrophes are inherently unpredictable, and it is difficult to predict the timing of such events or estimate the amount of loss

they will

generate. To mitigate this risk, we have chosen to partner with Microsoft for its reliability, security, uptime and global reach.

International operations: As we expand our business to new global markets, additional risks may affect our business:

 increased tax complexity

 requirements to comply with foreign laws and legal standards

 import and export license requirements, tariffs, taxes and other trade barriers

 increased costs of accounting and additional reporting requirements

 increased threats to our intellectual property

 political, social and economic instability abroad, terrorist attacks and security concerns

 currency volatility

 higher transaction costs

 increased management, travel, infrastructure and legal compliance costs

 credit risk, longer payment cycles, difficulties in enforcing contracts and collecting accounts receivables

 the need to localize products and licensing programs

 uncertainty regarding foreign regulatory requirements

As we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively

manage these and other risks.

Directions: Management Team

In this section, you will need to describe the strength of your management team, with an honest account of your

accomplishments and capabilities, while mitigating any obvious shortcomings and weaknesses. You need to identify

what makes your team the right one to deliver on this plan. To that end, you should provide the following:

 A summary of résumés of key senior management and owners, as well as a list of professional advisors, strategic

alliances, board members and directors. You should also include a summary of gaps in your team and a plan for

filling these gaps.

See sample copy below & delete this table when template is complete.

Management Team

Ed Hartford – President & CEO

Ed formed the Company in 2000 and has driven the rapid transformation of the organization to a Cloud business model over the

past 2 years. Prior to his current role, Ed worked with Transport Vision worldwide to enhance the marketing and sales efforts of its

distribution channel across the globe. He later consolidated and ran the North American operations of ABC Logistics IT, the then

largest transportation scheduling software company in the US. Under Ed’s leadership, the product line was expanded through

acquisitions to grow to over $55 million annually.

Mark Hanson – Chief Revenue Officer

Mark joined the Company in April of 2008. Prior to joining the Company, he was President and owner of Technomic Inc., selling

distribution and logistics solutions to the largest shipping companies around the world. From 1997 to 2008, Mark was Senior Vice

President for Cystidia Inc., headquartered in Chicago. Mark started his career selling ERP solutions with Xerox Computer Services

in 1985. Over the last 30 years, he has held multiple senior executive positions.

Mary Pelton – Chief Marketing Officer

Mary joined the Company in 2005 and has been instrumental in achieving the growth Polaris has experienced over the last 2 years.

With over 20 years of experience in senior marketing roles (including that of Vice President of a national credit card issuer), Mary

has crafted and implemented numerous marketing, sales, customer loyalty, and product strategies. Mary has direct functional

responsibility for business units ranging from insurance, travel fulfillment, and loyalty programs to outside sales channels.

Justin Harrison – Vice President of Delivery and Customer Success

Justin heads up our delivery team, and was previously directly responsible for a team of 25 consultants and 5 help desk personnel

at Johnsons Distribution Inc. Under Justin’s leadership, Polaris has achieved a consistently high ‘on-time, on-budget’ project delivery

track record, and customer satisfaction ratings in excess of 90%. Justin came to the Company in 2009. Prior to that, he led

technology delivery teams at several regional software IT services providers across the US mid-west.

Peter Smith - Chief Technical and Product Development Officer

Peter serves as Chief Technology Officer for Polaris. He is an award-winning, 30-year technology veteran with expertise in

virtualization, Cloud security and telecommunications. Peter designs the Polaris roadmap, leads the company’s project teams and

works closely with customers and partners. He was named one of Chicago’s top 40 under 40 and selected as the region’s Top IT

Innovator by the Chicago Business Journal. Earlier in his career, Peter served as Vice President of Speed Tech and XBT

Communications. There, he was responsible for driving the company’s most advanced and innovative offerings, and for

developing strategies to bridge the gap between traditional telecommunications and next generation products. Known for his

ability to address prospects’ needs in a language they can understand, Peter was instrumental in bringing dynamic security- and

productivity-enhancing solutions to the marketplace. Peter is involved with various regional business and industry groups, serving

as board member for the Chicago CIO Institute and Silicon Valley Cloud Conference. He is also a frequent contributor to

business and technology publications, and is often sought out to speak at industry events. Peter graduated magna cum laude

from MIT and studied telecommunications at the graduate level at NYU Tisch.

Jackie Harris – Chief Financial Officer

Jackie joined the Company in April 2012. Jackie’s career encompasses 5 years of ERP consulting experience and 25 years of

accounting & financial management. She worked at PricewaterhouseCoopers and US Container Corporation. Jackie earned her

MBA at Boston University and her BBA at the University of Illinois.

See the Appendix section for a profile of Polaris’s advisors and board members.

Directions: Appendices

Include any supporting documentation as appendices. This could include but is not limited to:

 Product roadmaps, pertinent product and services literature

 Market research data, surveys and studies

 Financial documents – pro-forma income statements, cash flows, balance sheets, and past audited financials

 Detailed competitor analysis

 Support for assumptions (average deal size, customer adds, etc.), trends, comparisons

 Board and advisor bios

Add all of your relevant appendices and delete this table when template is complete.

Appendices - Samples

Assumptions Documentation

As Polaris executes its SaaS strategy and introduces its Enterprise Tier solution and recurring optimization services, it anticipates

the deal structure outlined below. Polaris anticipates securing a minimum of 30 new deals annually with a churn rate of 8%.

Please see the following financial modelling tools to help you with your financial planning: (Jackie)

Average Deal Size

users

Upfront Project Services Fees

$25,000

per customer

Ongoing Project Services Fees

$2,500

per customer per year

Azure Consumption $2,500

per customer per year

Own IP License Fee

$75

per user per month

Managed Services Fees

$55

per user per month

Azure Margin & Incentives

20%

Office 365 Margin & Incentives

20%

Gross Margin (Project Services) 35%

Gross Margin (Managed Services) 45%

Anticipated IP Gross Margin

65%

Deal Structure

Margin Structure

Key Variables

See: www.xxxxx

Revenue and Margin Contribution

See: www.xxxxx

Four Year Profit and Loss Impact

See: www.xxxxx

Sample 4-year pro-forma picture. Based on the preceding core assumptions, and extensive financial modeling by Polaris, the 4-

year pro-forma picture would likely be:

Projected Customer Acquisition Growth

See: www.xxxxx

Cash Flow Projections

See: www.xxxxx

Anticipated Valuation Impact

Polaris intends to pursue an aggressive Cloud strategy because the rise in Cloud computing has caused a dramatic shift in how

companies in the IT industry are valued. Since Cloud solutions involve the purchase of ongoing subscriptions rather than upfront

investments in hardware, software, and configuration services, valuation metrics tend to be driven by recurring revenue levels, and

the margins resulting from those revenue streams. One-time project services revenues or one-time software revenues are less

highly valued. In today’s market, IDC sees the following valuation differentials for privately held IT services providers

Potential Valuation Traditional Revenue Business Recurring Revenue (Cloud) Business

Revenue Multiple 0.2-1.5x 2-6x

EBITDA Multiple 2-2.5x 5-14x

Based on these metrics and the adoption of this business plan, the estimated valuation of Polaris at the end of 4 years would be in

the $15 to $20 million range.

See the set of detailed financial modelling sheets located on Partner Network at xxxxx, and run your own financial modelling

scenarios, forecasts, cash flow impacts, and more.

Advisor and Board Members Bios

Insert here.

Helpful Resources

Jackie insert links to various partner videos, hiring guides, resources etc.

Source: IDC Partner Valuation Study 2014, Doc # 249719.