1. BUSINESS PLAN
ON
COMPUTER DATA RECOVERY SERVICE
BY ADARSH KUMAR SINGH

2. What is Data Recovery?
Put simply, data recovery is the process of retrieving computer data that, for
any number of reasons, has become inaccessible using normal methods.
Ontrack has the right tools and experience to solve your data loss problems.
Services provided
• RDR® - Remote Data Recovery™ Service
Using patented technology, Ontrack engineers perform lab-quality data
recovery service right on your server, desktop, or laptop through a modem of
Internet connection. Additionally, the connection is secured by using a
proprietary communication protocol, encrypted packets, and safe facilities.
• In-Lab Data Recovery Service
Ship the damaged drive or storage device to an Ontrack lab and let our
experienced engineers determine what is necessary to recover the
data. Most standard data recovery jobs are completed in 3-5 days for
the fastest turnaround time in the industry, and we return the data on
the storage media of your choice.
• EasyRecovery™ Professional Software
EasyRecovery Professional provides and easy to use, do-it-yourself
solution to meet data loss needs and restore valuable data.
EasyRecovery Professional offers a complete solution for disk
diagnostic, data recovery, and file repair needs.
Regardless of the Ontrack data recovery option that you chose, you
can be sure that:

3. • Ontrack Data Recovery software and data recovery services
Our engineers pioneered the technology used in this field and continue to
produce ground-breaking solutions. You can rest assured that your data is in
the most competent hands.
• Ontrack data recoveries return current data.
Although many people rely on backups following a data loss, the most
recent backup may not be recent enough.
• Ontrack Data Recovery software and data recovery services are f
Every second that passes following a data loss means time and money.
Our data recovery specialists help you quickly determine which data
recovery approach is the best for your situation.

4. Executive Summary
Introduction
Electronic Detectives, Inc. helps lawyers identify, acquire, restore,
and analyze electronic data in litigation. From tape restoration to hard
drive imaging, our full-time, certified forensic, discovery and testifying
experts are highly experienced in acquiring data from NT, Novell,
Unix and Linux servers and PCs, among others. As testifying experts,
we will help shape the field of electronic discovery.
The Company
Electronic Detectives will be a limited liability corporation registered in
the state of Delaware for tax purposes. The company has a limited
number of private investors and does not plan to go public. The
company has its main offices in Portland, Oregon. The company's
main clients will be law firms requiring identification, restoration, and
analysis of electronic data.
The company's private investors will own 47% of the company's
shares. The rest will be owned by the senior management including
Mr. David Radcliffe, (20%), Mrs. Julie Walters (10%), Mr. Brad Rinke
(15%), and Mr. William Orcott (7%). All other financing will come from
loans.
The Services
Electronic Detectives has experts well versed in all commercial
operating systems such as Unix, Linux, Novell and others. The firm
will assist in 30(b)(6) depositions to produce and go on-site to
inventory data and look for hidden sources. The company also plans
to maintain well recorded chains-of-custody in order to protect our
clients. Our written protocols and internal procedures ensure that our
work product withstands scrutiny in all jurisdictions. Our firm will offer
detailed written reports, presentations, and analyses to support our

5. conclusions. We also have a wealth of experience providing expert
testimony in federal and state court.
The Market
The electronic evidence gathering business is an offshoot of the
detective industry and it is such a new segment that gathering market
data is impossible. However, a look at the profitability of one of our
older competitors will give the reader an idea of the profit and growth
potential of this market. Computer Forensics of Bellevue, WA has
been in business for four years now and has experienced explosive
growth averaging 40% per year. The company, after significant
investment, achieved record pre-tax returns on net worth of 65%.
This is an indication of how much demand there is in the market and
the overall growth capacity. Therefore this is an excellent market to
enter now and achieve a defensible position based on customer
satisfaction and reputation before more competitors enter.
Financial Considerations
We conservatively expect to begin to make monthly profits in
November of the first year and yearly profits by year three. In case
our predictions are erroneous, Electronic Detectives has secured an
additional $60,000 credit line. Our break-even analysis indicates we
need to complete six projects per month to cover costs. During the
next three years we expect to maintain a positive cash flow and to
begin to payoff our various loans.

6. Business Objectives
The three year goals for Electronic Detectives are the following:
• Achieve break-even by year two.
• Establish 40 law firm clients by end of year three.
• Establish minimum 95% customer satisfaction rate.
• Achieve project completion time of 10 days or less.
1.2 Keys to Success
Electronic Detectives' keys to long-term survivability and profitability
are:
• Attracting the best talent in the computer science field and
establishing close contacts with those institutions and firms
conducting the latest R&D in computer security.
• Keeping close contact with clients and establishing a well
functioning long-term relationship with clients to generate repeat
business and a top notch reputation.
• Establishing procedures to ensure rapid, accurate retrieval of
information, and client processing.
1.3 Mission
It is the mission of Electronic Detectives to create a new standard in
the detective industry. With the creation of computers and the Internet
for business and personal communication and data storage, much of
needed court evidence is now retained on computers and PDA's in
the form of personal files, emails, electronic picture formats, and
other forms. Currently, there are few companies who offers
investigative services for institutions and firms that require accurate
retrieval of such information. Electronic Detectives intends to lead the
way in establishing standards for customer service, accurate
recovery, timeliness, and professionalism that will allow the company
to gain significant market share and an agressive, defensible position
in the industry.

7. Company Summary
Electronic Detectives will be a limited liability corporation registered in
the state of Delaware for tax purposes. The company has a limited
number of private investors and does not plan to go public. The
company has its main offices in Portland, Oregon. The facilities
include a computer forensics lab, conference rooms and office
spaces. The company expects to begin offering its services in
January of 2003.
The company's main clients will be law firms requiring identification,
restoration, and analysis of electronic data. The firm offers a wide
variety of services in order to reduce costs to our clients, which can
reduce overall legal fees to individuals, firms and institutions.
2.1 Company Ownership
The company will have a number of outside private investors who will
own 47% of the company's shares. The rest will be owned by the
senior management including Mr. David Radcliffe, (20%), Mrs. Julie
Walters (10%), Mr. Brad Rinke (15%), and Mr. William Orcott (7%).
All other financing will come from loans.
2.2 Start-up Summary
Total start-up requirements are $510,750 which includes a cash
account of $341,550 to cover initial operating expenses prior to
achieving the break-even level. The majority of our financing comes
from investors, who are providing $297,000. Current borrowing will
also provide $50,000 and there is long-term borrowing of $120,000.

8. Start-up
Requirements
Start-up Expenses
Legal $6,000
Insurance $5,000
utilities $200
Rent $2,000

9. Accounting and bookkeeping fees $2,000
Research and Development $4,500
Advertising $6,500
Other $15,000
Total Start-up Expenses $41,200
Start-up Assets
Cash Required $341,550
Other Current Assets $0
Long-term Assets $128,000
Total Assets $469,550
Total Requirements $510,750
Start-up Funding

10. Start-up Expenses to Fund $41,200
Start-up Assets to Fund $469,550
Total Funding Required $510,750
Assets
Non-cash Assets from Start-up $128,000
Cash Requirements from Start-up $341,550
Additional Cash Raised $0
Cash Balance on Starting Date $341,550
Total Assets $469,550
Liabilities and Capital

11. Liabilities
Current Borrowing $50,000
Long-term Liabilities $120,000
Accounts Payable (Outstanding Bills) $43,750
Other Current Liabilities (interest-free) $0
Total Liabilities $213,750
Capital
Planned Investment
Mr. David Radcliffe $60,000
Mrs. Julie Walters $30,000
Mr. Brad Rinke $45,000
Mr. William Orcott $21,000
Others $141,000
Additional Investment Requirement $0

12. Total Planned Investment $297,000
Loss at Start-up (Start-up Expenses) ($41,200)
Total Capital $255,800
Total Capital and Liabilities $469,550
Total Funding $510,750
Services
Electronic Detectives offers its computer forensics services in four
phases:

13. • Identification of pertinent data including encrypted, compressed
and password-protected files.
• Acquisition and restoration of data.
• Analysis.
• Production of reports and presentations for our clients and the
relevant court.
Electronic Detectives has experts well versed in all commercial
operating systems such as Unix, Linux, Novell and others. The firm
will assist in 30(b)(6) depositions to produce and go on-site to
inventory data and look for hidden sources. The company also plans
to maintain well recorded chains-of-custody in order to protect our
clients. Our written protocols and internal procedures ensure that our
work product withstands scrutiny in all jurisdictions. Our firm will offer
detailed written reports, presentations, and analyses to support our
conclusions. We also have a wealth of experience providing expert
testimony in federal and state court.
Market Analysis Summary
Electronic Detectives will be concentrating on large law firms with a
proven track record with fields in the environmental, corporate,
malpractice, intellectual property rights, and general law areas. This

14. is because these types of companies have the greatest needs and
the highest profit margins.
Profitability and growth in this little-tapped market is astounding, as
evidenced by one of our major competitors, who has experienced
explosive growth averaging 40% per year. The company, after
significant investment, achieved record pre-tax returns on net worth
of 65%.
An analysis of the market using the five forces of profitability indicates
that there will be a short time where growth of market share and
profitability will be extremely high while demand outstrips supply. As
new entrants move into the market this opportunity will disappear.
This is the time for Electronic Detectives to create its reputation and
niche in the industry.
Market Segmentation
For Electronic Detectives' first three years it will be concentrating
exclusively on acquiring contracts with West coast law firms
employing over twenty individuals and having a respectable
reputation for at least fifteen years. This is to insure long-term
contracts with satisfied customers who can afford our services and
create a self-generating word-of-mouth marketing campaign. In
addition, we will be focusing on law firms that are in the following
fields of practice
• Intellectual property rights;
• Corporate and business law;
• Environmental law;
• General practice;
• Malpractice.
Firms such as these have high demand for electronic investigations
due to their client's needs and work environments. The Market
Analysis table includes all the law firms of these types in the West
coast area of California, Oregon, and Washington.

15. Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5

16. Potential
Growth CAGR
Customers
Malpractice
2% 103 105 107 109 111 1.89%
firms
Intellectual
6% 34 36 38 40 42 5.42%
property firms
Corporate firms 4% 220 229 238 248 258 4.06%
General
2% 84 86 88 90 92 2.30%
practice firms
Environmental
7% 72 77 82 88 94 6.89%
firms
Total 3.86% 513 533 553 575 597 3.86%
Service Business Analysis
The electronic evidence gathering business is an offshoot of the
detective industry and it is such a new segment that gathering market
data is impossible. However, a look at the profitability of one of our
older competitors will give the reader an idea of the profit and growth
potential of this untapped market.
Computer Forensics of Bellevue, WA has been in business for four
years now and has experienced explosive growth averaging 40% per
year. The company, after significant investment, achieved record pre-
tax returns on net worth of 65%. This is an indication of how much
demand there is in the market and the overall growth capacity.
Therefore this is an excellent market to enter now and achieve a
defensible position based on customer satisfaction and reputation
before more competitors enter.

17. Within this new market, the existing rivalry among firms is very low.
This is because currently demand greatly outstrips the amount of
services available. Since this is such a growing market, competing
firms are concentrating on growing their own client base and not on
market share or direct competitive strategies. However, the threat of
new entrants is very high, so high that a large number of new
entrants to the market is guaranteed.
This is the reason why Electronic Detectives plans to be first to
market with comprehensive services and creating industry standards
in customer satisfaction and thoroughness. Additionally, the influence
that suppliers have on this market is quite significant. The most
important suppliers for Electronic Detectives is specialty software
companies producing file encryption/decryption software.
Although our firm anticipates creating some of its own software in-
house, the majority of our programs will come from the open market.
Therefore, much of our success depends on the capability of our
suppliers.
Competition and Buying Patterns
There are three competitors within our geographical operating area:
Computer Forensics of Bellevue, WA; Techno Solutions of Pasadena,
CA; and Booth & Anderson Business Consultants of Los Angeles,
CA.
Of these three competitors, only Computer Forensics is a direct threat
to us. Techno Solutions is currently concentrating on providing the
same services for companies looking to investigate internal fraud and
computer misuse such as banks and other financial institutions.
Booth & Anderson is a general business consulting firm that offers
electronic investigation as only one of its many services, and
therefore lacks the focus to offer a comprehensive client-provider
experience.
Currently Computer Forensics is going through a rapid expansion
phase as it ramps up for maximum service delivery. Due to the high

18. demand for such services we will not have direct competition for
some time. Once new entrants become plentiful, we anticipate that
this will change.
One of the advantages to operating in this market is that clients tend
to be relatively price insensitive as long as they get a professional
and satisfying experience. Therefore we expect to be able to charge
a significant profit margin.
Strategy and Implementation Summary
Electronic Detectives' overall strategy is to capitalize on client's
buying patterns of demanding top-quality work with an emphasis on
thoroughness in investigations to reputable companies.
We intend to create industry standards of excellence that will be
leveraged into a significant brand image and name that will provide
us with a highly defensible market position. This will allow us to have
a higher profit margin than our competitors.
Sales Strategy
Initially, sales will be dealt with by Mr. Radcliffe and Mr. Orcott, as
they have the most number of contacts in the industry. Mrs. Walters
will handle the administrative side of sales to our clients including
customer service and billing. As the company grows, we expect to
add to our staff a permanent sales force to handle all aspects of our
sales strategy.
In the majority of cases, we anticipate that the entire project will last
about ten days from the time we have permission to go on site. This
will insure good turnaround and customer satisfaction. We intend to
have close customer relations by having each job developed, scoped,
sold, and fulfilled by the same people.
Sales Forecast
Sales are based on the various contract projects we anticipate
acquiring in the various market segments. Revenues are based on

19. average costs per project based on estimated time and complexity of
project plus an undisclosed profit margin. The company does not
have any significant direct costs of sales.
Sales Forecast
Year 1 Year 2 Year 3

20. Sales
Malpractice lawsuits $64,000 $100,000 $135,000
Corporate/business lawsuits $72,000 $156,000 $225,000
Intellectual property lawsuits $14,000 $60,000 $120,000
General practice lawsuits $30,000 $75,000 $100,000
Environmental lawsuits $35,000 $90,000 $135,000
Total Sales $215,000 $481,000 $715,000
Marketing Strategy
In order to attract clients, Electronic Detectives will offer free
consultations or an initial contract at reduced prices to promising
firms. These promotions will build our reputation. In addition, Mr.
Radcliffe and Mrs. Walters will be traveling to six trade shows and
conventions across the Midwest and Western part of the country
where we will have booths to advertise our services. Finally, we will
be setting up cold calls to potential clients and have half and full page
advertisements in such publications as Nation Law Journal, The
Journal of Corporate Law, and Eisley's Law Review.
The company will have four officers including our president, Mr. David
Radcliffe. Our heart of operations will include an operations chief, Mr. Brad

21. Rinke, plus two other forensics analysts. Legal issues will be handled by our
in-house lawyer, Mr. Orcott, and finances and general admin by Mrs.
Walter.
The company plans to hire additional computer forensic analysts as
we begin to get large numbers of contracts.
Personnel
Mr. David Radcliffe is a former special agent of the FBI. During his
twenty years with the bureau, Mr. Radcliffe worked in a variety of
different departments, but starting in 1981 he transferred to and
eventually headed the FBI's electronic information investigation
branch. In 1985 Mr. Radcliffe received an MBA in information
systems from the University of Washington.
Mr. Brad Rinke graduated from Penn State University with a
bachelors degree in forensic sciences in 1975. From 1978-1988 Mr.
Rinke worked with the California State Patrol as a forensic
investigator. In 1992 Mr. Rinke received a masters degree in
computer science from the University of Southern California. For the
past ten years Mr. Rinke has worked with Symantec, Inc. identifying
and developing computer programs to fight viruses and worms.
Mr. William Orcott is a graduate of the Stanford School of Law. For
the past eight years Mr. Orcott has worked with White, Curley, &
Pineda, a top law firm in Los Angeles specializing in intellectual
property lawsuits. Mr. Orcott will serve as the legal advisor for
Electronic Detectives and will also be the senior evidence custodian,
maintaining the evidence locker inventory
Financial Plan
Our financial plan anticipates two years of negative profits as we gain
sales volume. We have budgeted enough investment to cover these
losses and have an additional credit line of $60,000 available if sales
do not match predictions.

22. Projected Profit and Loss
The following table itemizes our revenues and associated costs. We
expect to be paying higher costs in marketing and advertising than
other companies as we attempt to build sales volume. As the reader
can see, we expect monthly profits to begin in November 2003 and
yearly profits to occur in 2005.

25. Profit and Loss
Year 1 Year 2 Year 3
Sales $215,000 $481,000 $715,000
Direct Cost of Sales $0 $0 $0
Other Costs of Sales $15,800 $25,000 $65,000
Total Cost of Sales $15,800 $25,000 $65,000
Gross Margin $199,200 $456,000 $650,000
Gross Margin % 92.65% 94.80% 90.91%
Expenses
Payroll $216,000 $300,000 $340,000
Sales and Marketing and
$30,000 $50,000 $50,000
Other Expenses
Depreciation $2,400 $2,500 $2,500
Rent $24,000 $24,000 $28,000
Utilities $6,000 $6,000 $6,000
Insurance $12,000 $14,000 $15,000
Travel $8,200 $12,000 $12,000
Payroll Taxes $0 $0 $0
Other $7,200 $10,000 $10,000
Total Operating Expenses $305,800 $418,500 $463,500
Profit Before Interest and
($106,600) $37,500 $186,500
Taxes
EBITDA ($104,200) $40,000 $189,000
Interest Expense $17,000 $15,150 $11,450
Taxes Incurred $0 $6,705 $52,515
Net Profit ($123,600) $15,645 $122,535
Net Profit/Sales -57.49% 3.25% 17.14%

26. Projected Cash Flow
The following is our cash flow chart and diagram. We do not expect to
have any short-term cash flow problems even though we will be
operating at a loss for the first two years. Our short-term SBA loan of
$50,000 will be repaid in two equal payments in 2004-2005. Our
$120,000 long-term loan will be paid off in ten years.

27. Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $53,750 $120,250 $178,750
Cash from Receivables $111,075 $298,673 $481,641
Subtotal Cash from Operations $164,825 $418,923 $660,391
Additional Cash Received
Sales Tax, VAT, HST/GST
$0 $0 $0
Received
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-
$0 $0 $0
free)
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $13,000 $0
Subtotal Cash Received $164,825 $431,923 $660,391
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $216,000 $300,000 $340,000
Bill Payments $150,401 $163,019 $242,805
Subtotal Spent on Operations $366,401 $463,019 $582,805
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid
$0 $0 $0
Out
Principal Repayment of Current
$0 $25,000 $25,000
Borrowing
Other Liabilities Principal $0 $0 $0

28. Repayment
Long-term Liabilities Principal
$0 $12,000 $12,000
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $366,401 $500,019 $619,805
Net Cash Flow ($201,576) ($68,096) $40,586
Cash Balance $139,974 $71,878 $112,464
Projected Balance Sheet
The following is the projected balance sheet for Electronic Detectives.

29. Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $139,974 $71,878 $112,464
Accounts Receivable $50,175 $112,252 $166,861
Other Current Assets $0 $0 $0
Total Current Assets $190,149 $184,130 $279,325
Long-term Assets
Long-term Assets $128,000 $128,000 $128,000
Accumulated Depreciation $2,400 $4,900 $7,400
Total Long-term Assets $125,600 $123,100 $120,600
Total Assets $315,749 $307,230 $399,925

30. Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $13,549 $13,385 $20,545
Current Borrowing $50,000 $25,000 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $63,549 $38,385 $20,545
Long-term Liabilities $120,000 $108,000 $96,000
Total Liabilities $183,549 $146,385 $116,545
Paid-in Capital $297,000 $310,000 $310,000
Retained Earnings ($41,200) ($164,800) ($149,155)
Earnings ($123,600) $15,645 $122,535
Total Capital $132,200 $160,845 $283,380
Total Liabilities and Capital $315,749 $307,230 $399,925
Net Worth $132,200 $160,845 $283,380