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TO START A NEW VENTURE IN PUBLIC PROCUREMENT INFORMATION DOMAIN About Public Procurement: All Government buying is more specifically called Public Procurement. The word Public implies that the procurement is being done for the public and from money received from the public in the form of taxes. Since the procurement officers have to deal with public money, it is imperative for them to maintain Transparency & Accountability. Procurement Methods: Public Procurement Size: Typically governments across the globe spend 10-20% of their GDP on public procurement. The total GDP of the whole world in 2012 was around 71.7 Trillion USD (as per International Monetary Fund estimates). If the average public procurement spend is calculated at 15% of GDP, it translates in to a whopping 10.75 Trillion USD worth of business opportunities every year. About This Business: What is This Business all about? As explained above, it is mandatory for all governments, quasi government organizations to publish their procurement information in local newspapers, national news papers, own website, funding agency websites etc. The objective of the purchasers is to get maximum circulation of their buying requirement and hence attract wider participation. The first such notice published is known as the ‘Tender Notice’ In the pre-internet era these buying requirements/tenders/opportunities could not be circulated to a wider supplier base, and hence the competition used to be very thin. Common methods used to be: Faxes, embassies, local agents etc. But with the advent of the internet, collection, collation and dissemination of this information to suppliers as per their profile, have not only become easier, but also faster. Products: We will process Tender Notice information, Project information, Business news, Contract Award Information, corrigendum etc. How: We will collect this information from all around the world and from different sources. Once collected, this information will be processed and will be converted in to a database on a daily basis. We will need following software to process and deliver this information to the clients: DMS (Document Management System): This software will help in processing the raw information and converting it in to database, that will be extremely user-friendly. It will include few intermediate processes like downloading, duplicate checking, translation, indexing, quality check etc. This Software will cost around Rs 6 Lacs approximate Dissemination: The dissemination or delivery of the database will be through 3 channels: A) Website Access B) Email Alerts C) Mobile Application CMS (Customer Management System) This software will be used to manage and serve the clients as well as the prospects. Why Businesses Buy this Service: The Pain: For a supplier interested to participate in national/international tenders, it is very difficult to get this information from all purchasers. Question can be asked - why not deploy 2-3 people and get it done? The answer is: Well it can be done but it would neither be cost effective nor comprehensive nor faster. Our business addresses this problem. The information thus sold by our organization, will be much cheaper, faster, can be customized to business needs at times, disseminated to several business heads as per their responsibilities etc. Revenue Model: Prospects and Market Size: A) Individual Customers: Our prospects are all such companies/businesses which are selling their products and services to governments. Typically governments around the world generally purchase products/services like construction work, infrastructure projects, medicines, hospital equipments and supplies, school text books, control and automation products, power plants, software, electrical projects, plants and machineries, consultancy services etc. MRO items are also purchased by governments. B) Bulk Customers: Trade/industry associations, trade bodies, R&D institutes, industry verticals, content aggregators, embassies, Export promotion councils, chambers of commerce are potential Bulk Customers. There are about 500,000 organizations from around the world who are selling to governments through the tendering process. Even if we target a 0.5% hit rate, our market size would be around 2500 clients, which at 1000 USD per client, would translate in to total revenue of 2.5 Million USD. This we are targeting in next 4-5 years, which is very conservative target from any angle. Investment and Timelines: Here are the tentative numbers and timelines: 1. Time to Go to Market: 4-5 Months 2. Time required to achieve Cash Breakeven: 1 Year from GTM 3. Funds required till cash breakeven: Around USD 40,000 4. Revenue rate in 3Rd, 4Th and 5Th year: USD 1 M, 1.5 M, 2.5 M respectively 5. Gross Profit Margins 4Th Year onwards: 25-30%