Capital and Technology Plan (Continued)
Given the space needed for your business, you will now come to the technology and infrastructure requirements. This will include the basic furnishing requirements for your office(s), such as seating, tables, filing cabinets, air conditioning/heating, utilities, power backup, telephone, fax, Internet and other office equipment requirements. For manufacturing facilities, you will also need to work out the machinery required to meet the manufacturing processed planned, the storage requirements, and on-site material movement equipments.
An ideal way to analyze and determine the infrastructure and technology requirements is to use a Value Chain Model as shown in the diagram alongside. The major activities of the firm can be looked upon as consisting of two categories:
- The Primary or Mainstream activities, and
- The Support Activities
The infrastructure and technology requirements for each of these categories need to be planned, keeping in ming their Value addition to the firm. Thus some prioritizing will be required in assigning the capital planned against these requirements. Once this exercise is completed, you have a comprehensive list of your space requirements and the corresponding equipments and technology requirements.
Now to translate these into financial terms, you will need to decide on which components that you are investing in from this list will be purchased, and which of these will be leased. The items purchased (either with upfront capital, or with some financing scheme) will be considered as assets of the business, and the items leased will form part of your expenses.
Thus, your Capital and Technology Plan will include all the assets which will need capital for acquisition, and the items which you lease, which will require working capital to pay for these expenses.