Sample Business Plan Essay
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Business Success Consulting is a new business located in North Creek, British Columbia, specializing in consulting services for small and medium sized businesses. Primary services will include market feasibility studies, business plans, operational reviews, re-engineering, strategic planning, seminars and workshops. Our mission is to provide our clients with business services that help them become more successful and to become a leader in consulting to small and medium sized businesses. To keep our overhead costs low, Business Success Consulting will be located in the home of Mark B.
Assets. The home is equipped with a computer, fax machine and photocopier.
Ownership and Management
Business Success Consulting is a sole proprietorship, owned by Mark B. Assets. As the business expands the firm may develop strategic alliances with other companies. Mark B. Assets is a Certified Management Consultant and a member of the Institute of Management Consultants of British Columbia. He has a commerce degree from the University of Brigham and a Masters in Business from the University of South Seymour.
Mark B. Assets has been a consultant for 15 years with Smith and Smith specializing in small and medium sized businesses. Business Success Consulting will initially only have one employee, Mark B. Assets. Additional staff support will be obtained on a subcontract basis. Secretarial service will be contracted out as required to TempServ company in North Creek.
Key Initiatives and Objectives
Business Success Consulting is currently in the process of obtaining a bank loan for $30,000 to finance the start up of the business. Our key objective during the first 12 months of operation is to develop a profitable consulting business. To do this, a strong client base will be developed through networking with local business leaders and business associations, affiliating with small business loan divisions of the local banks, and holding seminars and workshops. During the first four months of operations eight small business seminars and four small business workshops will be developed.
Due to high overhead costs Smith and Smith recently restructured to focus more on large corporate and government clients. This meant the elimination of their small business division. Large consulting firms such as Smith and Smith typically target larger businesses and government contracts; thus creating an opportunity for smaller consulting firms such as Business Success Consulting to provide small and medium sized businesses with affordable consulting services.
There are currently no other firms that specialize in this type of consulting located within the region. Mark B. Assets left Smith and Smith to continue to provide small and medium sized businesses with much needed affordable consulting services.
The key competitive advantages of Business Success Consulting are the small business experience and expertise of Mark B. Assets as well as the business’s relatively low overhead costs compared to competitive consulting firms. Mark B. Assets is a Certified Management Consultant with extensive consulting experience for small and medium sized businesses. Overhead costs are comparatively low because Business Success Consulting will be based at the home of Mark B. Assets and labour costs will be low as there are no other full time employees.
Our target markets will be small and medium sized new and existing businesses in the surrounding region. Business Success will market its services by placing an ad in the yellow pages, listing with all local business and industry associations, developing a brochure to be distributed to lending institutions and clients, becoming an active member of a number of business and consulting associations, networking with the local business community, and developing workshops and seminars for small businesses. Our seminars and workshops will be used to promote our other consulting services. Attendees will be able to pick up our corporate brochure and ask any questions regarding the services we provide. The corporate brochure will outline Business Success Consulting’s services and fee structure.
The brochure will also highlight the past experience and level of expertise of Mark B. Assets. The brochures will be distributed at our workshops and seminars, to lending instituutions, associations, key business leaders, and to potential clients. Business Success Consulting will not do much advertising except for placing an ad in the local yellow pages. Within the next three years, Business Success Consulting may develop an Internet site highlighting key services, level of expertise and fee structure. Mark B. Assets will join local business associations to maintain contacts in the business community as well as to stay well informed about the business issues that are important to local businesses.
Summary of Financial Projections
The revenue of Business Success Consulting are projected to increase from $121,770 in 1998 to $181,170 by 2000. Revenues will see strong growth of 22% annually as the business grows and expands. The Cost of Sales are 55% including total wages (including subcontractors) at 45% and goods and materials at 10%. The Net Income is projected to increase from $12,330 in 1998 to $17,279 in 2000. Corporate profits will be taxed at the corporate rate of 22.8% while Mark B. Assets’ wages of $40,000 per year will be taxed at prevailing personal tax rates.
Confidentiality and Recognition of Risks
The information included in this business plan is strictly confidential and is supplied on the understanding that it will not be disclosed to third parties without the written consent of Mark B. Assets.
Recognition of Risk
The business plan represents our best estimate of the future of Business Success Consulting. It should be recognized that not all of major risks can be predicted or avoided and few business plans are free of errors of omission or commission. Therefore, investors should be aware that this business has inherent risks that should be evaluated prior to any investment.
Business Success is a management consulting business that is scheduled to begin operations on March 1, 1997. Business Success will be a sole proprietorship, owned by Mark B. Assets. Mark B. Assets left the large consulting firm of Smith and Smith to specialize in consulting to small and medium sized businesses. Large consulting firms such as Smith and Smith typically target larger businesses and government contracts creating an opportunity for Business Success to provide small and medium sized businesses with affordable consulting services.
Vision and Mission Statement
Our mission is to become a leader in small business consulting by providing our clients with business services that help them become more successful.
Our primary objectives over the next year are to: 1. Obtain a bank loan of $30,000 to cover the start up costs and initial operating costs for Business Success Consulting. 2. Generate one new client contract a month by networking with key industry leaders and local lending institutions, conducting seminars and workshops for small and medium sized businesses, and joining key business and industry associations. 3. Generate a net profit of $12,000 in the first year by developing a strong client base and keeping overhead costs to a minimum. 4. Develop and conduct eight business seminars and four business workshops that meet the needs of the local business community.
Business Success is a sole proprietorship, owned by Mark B. Assets. As the business expands, strategic alliances may be formed with other companies.
Location and Facilities
To keep our overhead costs low, Business Success Consulting will be located in the home of Mark B. Assets. The home, located at 1875 Wilson Street in North Creek, is equipped with a computer, fax machine and photocopier. Secretarial service will be contracted out as required to TempServ company in North Creek. Where possible, all meetings and presentations will be held at the client’s location. If this is not feasible, the company has arranged to rent the boardroom of a local law firm as required. Presentation equipment such as overhead projectors and liquid crystal display (LCD) units will be rented from North Creek Community College. Any sub-contractors hired for specific projects will not work in our office but will work from their own offices. This will greatly reduce our overhead costs allowing us to price our services competitively. As Business Success Consulting grows, consideration will be given to acquiring office space.
Products and Services
Description of Products and Services
The primary types of services we will provide include market feasibility studies, business plans, reengineering strategies, organizational reviews, strategic planning, seminars and workshops. Our services include the development of: 1. Market Feasibility Studies We develop market feasibility studies for businesses that want to market new products or technologies. Some of these companies are looking for government funding to commercialize the technology or product. Our market feasibility studies include a full assessment of potential markets, competitive analysis, and the financial viability of commercializing the product.
2. Business Plans We will develop full business plans for start up and existing businesses requiring financing, introducing new products, entering new markets, and restructuring. 3. Other Services Our other services will include operational revviews, strategic planning, and development of corporate re- engineering strategies. 4. Seminars and Workshops We will offer seminars to small and medium sized businesses. The seminars will focus on key management issues for small and medium sized operators such as market analysis, product commercialization, how to write a business plan, marketing strategies, customer service etc. Attendance will vary but should average 20 to 30 people each.
The workshops will be developed to help small and medium sized businesses write business plans. This service is currently unavailable in the area. Workshops will be held in the evenings and on weekends making it easier for busy operators to attend.
Key Features of the Products and Services
Business Success Consulting will specialize in small and medium sized firms. While other consulting firms in the region offer small and medium sized businesses consulting services, none specialize in this area. With today’s unpredictable political and economic environments, it is increasingly difficult for entrepreneurs to successfully start new businesses and for existing small and medium sized businesses to remain profitable. Our services will differ from our competitors in that Business Success Consulting will offer creative, innovative, and effective solutions to business problems. Too many consulting firms try to develop standard models to solve key business problems. Business Success realizes that business problems have a variety of solutions; what may be right for one business would not necessarily meet the needs of another business.
Production of Products and Services
Initially subcontractors will be hired as needed to work on specific projects. Subcontractors will be hired based on their area of expertise and experience. Due to office space limitations, sub contractors will work out of their own offices and will be linked directly to our office via e-mail and the Internet. Within the next three years, full time consulting and administrative staff will be hired. While all reports will be produced and edited by Mark B. Assets, the physical reports will be formatted, printed and bound by TempServ, a local secretarial agency in North Creek. Should the company take on any other full time employees, consideration will be given to leasing office space in the North Creek area.
Future Products and Services
We will continually expand our services based on industry trends and changing client needs. We will also get feedback from clients and seminar attendees on what is needed for future seminars and workshops.
Comparative Advantages in Production
Our comparative advantages in production are our low overhead and labour costs. Business Success does not have to pay for under utilized staff or facilities. We also have an advantage in that we can pick the most qualified sub- contractors for each project. The sub-contractors will be picked based on their expertise. This allows us to draw from a larger labour pool and skill set. Subcontractors will be hired as needed which means that during down times our firm is not over staffed.
To fully understand the market we are targeting we talked to local business leaders, the Small Business Association, the Chamber of Commerce, the local economic development office, and all small business lending departments at the local banks. In addition, we read local newspaper and journal articles, and collected industry statistics from Statistics Canada.
Size of the Industry
There are 500 consulting businesses in British Columbia; there are 34 consulting firms in the North Creek area alone. While there is some overlap in the types of services provided, most firms have developed their own market niches. Firms tend to become well known and recognized for their skills in a specific area such as organizational re-engineering, marketing, training, employee benefits, government program evaluation, or in a specific industry such as forestry, hospitality, health care, information technology, or communications.
Key Product Segments
Consulting is a very diverse industry. There are hundreds of different services that consultants provide to all industries and industry sectors.
Key Market Segments
Key market segments vary by consulting specialty. The key markets for consulting services are corporations, municipal, regional, provincial and federal governments, crown corporations, and institutions such as hospitals and educational facilities. The total size of these markets is unknown because they are continually changing and there are no provincial or federal tracking mechanisms in place to accurately determine how much these market segments spend on consulting services annually.
Purchase Process and Buying Criteria
The buying process for consulting services varies by type of client and by type of service. Businesses find and chose consulting firms using several methods. 1. Referral Businesses find consultants through their lending institutions, business or industry associations, friends or colleagues, and the yellow pages. Businesses contact these consulting firms to obtain proposals and price quotes for the required services. A consulting firm is chosen based on the needs of the client such as price, quality of proposal, as well as the reputation, past experience and level of expertise of the consulting firm. 2. Request for Proposal Government and other businesses requiring consulting services sometimes distribute a “Request for Proposals” to a number of consulting firms that they would like to bid on a specific project.
These consulting firms submit proposals for the projects they wish to bid on outlining the sccope of the work, the methodology, a work plan and price quote. These proposals are evaluated based on a predetermined set of criteria developed by the client. The proposal evaluation criteria varies by project and client but usually includes price, quality of proposal, and the reputation, past experience and level of expertise of the consulting firm. 3. Open Bidding System (OBS) The OBS is an opening bidding system for government contracts. Anyone can access this service and submit a proposal for any contract they feel qualified to bid on.
Business plan services are usually purchased by start up businesses or by small and medium sized businesses requiring financing, commercializing a new product, or entering new markets. These businesses seek business planning assistance from their lending institutions, industry and business associations, or directly from consulting firms.
Description of Industry Participants
Consulting firms are divided into large firms with more than 100 employees, medium sized firms with 20 to 100 employees and small firms with less than 20 employees. The majority (66%) of consultants in Canada are employed at large firms, 6% and medium sized firms and 28% at small firms according to a recent Industry Canada report. The large consulting firms are usually U.S. based firms and include Andersen Consulting, Coopers & Lybrand, Deloitte & Touche, Ernst & Young, KPMG, and Price Waterhouse. Small firms typically have less than 10 employees.
Key Industry Trends
The consulting industry is growing for two key reasons. One is that demand for consulting services is increasing as companies downsize and contract out work that was historically done in-house. Corporate downsizing has also resulted in many managers being laid off. It is difficult for many of these people to find similar employment and as a result, many of these managers start their own businesses. Approximately 10% become consultants, many providing consulting services to the firms they just left. Those who start other types of businesses may require specialized consulting services to improve their chances of success. Therefore corporate downsizing has resulted in an increase both in the supply of, and demand for, consulting services. The number of business starts in North Creek has risen 10% annually over the last several years. Approximately 100 new businesses with be started in the area in 1997. This trend is projected to continue for at least another 5 years.
With the continued economic and political uncertainty in this province, the demand for consulting services will grow as many companies are reluctant to hire additional employees. More and more work will be contracted out to outside consultants as companies maintain tight control over labour costs. This trend is also true in the government sector which is under increasing pressure to reduce costs by reducing their employment levels. While the number of business starts has increased so have the number of bankruptcies. Approximately seven out of 10 new businesses will fail within the first two years of operation, primarily due to poor management. Some people who start new businesses lack basic business skills. The demand for small business training and assistance will grow as these entrepreneurs seek the assistance they require in order to reduce their risk of business failure.
Our target markets will be small and medium sized new and existing businesses in the surrounding region. We will also submit proposals in response to any Request for Proposals we receive as well as for any relevant provincial and federal government contracts.
Description of Key Competitors
There are a total of 34 consulting firms in North Creek, British Columbia. Only 14 of these consulting firms offer services similar to Business Success Consulting. The other 20 consulting firms in the region specialize in other areas of consulting such as employee benefits, training, marketing, information technology, health care or forestry. There are four large consulting firms (more than 30 employees) that offer consulting services to small and medium sized businesses. However, these large firms cannot cost effectively service this market due to high overhead and labour costs. Small and medium sized businesses usually cannot afford the high hourly fees charged by these firms.
Business from this target market does not represent a significant portion of the revenues generated by these four large firms which all specialize in other areas of consulting. There are 10 smaller consulting firms (less than five employees) that offer consultiing services similar to Business Success Consulting. However, none of these firms specializes in consulting to small and medium sized businesses. All 10 firms offer a wide range of consulting services. The majority (70%) of these firms are operated by people who have been laid off from large firms and who have limited consulting experience and qualifications.
Analysis of Competitive Position
Business Success Consulting will be the only consulting firm in the region specializing in providing consulting services to small and medium sized businesses. Business Success Consulting has a competitive advantage in this area due to the excellent consulting experience of Mark B. Assets. Mr. Assets is a Certified Management Consultant with 15 years consulting experience, including 10 years focussing on small business consulting. However, as a new business, it may take time to establish a strong client base and develop a reputation as a small business specialist. Mr. Assets already has an excellent reputation in this area and Smith and Smith, his former employer, will redirect any of this type of business to Mr. Assets’ new firm.
Business Success Consulting services will be priced competitively with other small consulting firms. Typically the fees charged by small firms are much lower than those charged by the large firms due to lower overhead costs. Our fees will be based on several factors including the time and resources needed to complete a project, overhead costs, and the fees charged by other competitive consulting firms. Our hourly rates average $90.00 per hour compared to $180.00 per hour for the large consulting firms. Our hourly fees will remain the same for all projects. However, total project costs will vary depending on the time needed to complete the project as well as the direct expenses incurred as part of the project.