Marketing and Financial Analysis of Novative Consulting, Inc - Example

Business Plan: Novative Consulting, Inc. Student’s Name Institution Statement of Confidentiality The wording and facts contained in this business plan is private and proprietary. It has been availed to you solely for the purpose of evaluation and consideration of the information contained in it. In no circumstance will any or all parts of this Business Plan be disseminated or disclosed minus the direct written permission of Novative Consulting, Inc. Table of Contents Page 1.0 Section I: Executive Summary………………………………………………………………6 2.0 Section II: Business Description………………………………………………………. 2.1 General description of business…………………………………………………... 2.2 Industry background…………………………………………………………. 2.3 Corporate fit…………………………………………………………………… 2.4 Goals and potential of the business and milestones…………………………………. 2.5 Uniqueness of product or service……………………………………………. 3.0 Section III: Marketing…………………………………………………………….. 3.1 Research and analysis……………………………………………………………… 3.1.1 Target market (customers) identified………………………………….. 3.1.2 Market size and trends……………………………………….. 3.1.3 Competition…………………………………………….…….. 3.1.4 Estimated market share…………………………………….. 3.2 Marketing plan……………………………………………………………. 3.2.1 Market strategy—sales and distribution…………………….. 3.2.2 Pricing policy…………………………………………………… 3.2.3 Advertising and promotions plans…………………………………… 4.0 Section IV: Operations……………………………………………………………………….. 4.1 Identify location………………………………………………………………. 4.1.1 Advantages……………………………………………………… 4.1.2 Zoning…………………………………………………………….. 4.1.3 Taxes……………………………………………………………….. 4.1.4 Proximity to suppliers…………………………………………….. 4.1.5 Access to transportation………………………………………. 5.0 Section V: Management………………………………………………………….. 5.1 Management team—key personnel…………………………………………………… 5.2 Legal structure—stock and employment agreements, and ownership…………………. 5.3 Board of directors, advisors, and consultants…………………………………. 6.0 Section VI: Financial……………………………………………………………. 6.1 Financial forecast (pro forma financial statements)……………………………… 6.1.1 Profit and loss………………………………………………………….. 6.1.2 Cash flow………………………………………………………. 6.1.3 Break-even analysis………………………………………….. 6.1.4 Cost controls…………………………………………………………… 6.1.5 Budgeting plans……………………………………………………… 7.0 Section VII: Critical Risks……………………………………………………………. 7.1 Potential problems…………………………………………………………………. 7.2 Obstacles and risks……………………………………………………………….. 7.3 Alternative courses of action…………………………………………………… 8.0 Section VIII: Harvest Strategy…………………………………………………….. 8.1 Transfer of asset………………………………………………………………….. 8.2 Continuity of business strategy…………………………………………………….. 8.3 Identity of successor……………………………………………………………….. 9.0 Section IX: Milestone Schedule…………………………………………………………. 9.1 Timing and objectives……………………………………………………………… 9.2 Deadlines and milestones……………………………………………………………… 9.3 Relationship of events…………………………………………………………………. 10.0 Section X: Appendix or Bibliography……………………………………………… 1.1 Section I: Executive Summary Novative Consultants is a strategic training and Consultancy Company that specialize in offering; accounting, advertising, marketing, career counselling, and Web-based business consulting services. This business will operate in the online business or e-commerce sector, where it will provide online based-services this company has a vision of becoming a world class online consultancy firm known for quality, effective, and transforming consulting and advisory services. In this respect, this business will major in providing high-end strategic planning and business planning services and products to all types of individual and corporate clients. This company plans to use a pricing strategy that entails charging appropriately for the high-end, high-quality products and services it will offer. This company will use a marketing strategy that involves use of sales executives and analyst visit with customers. Additionally a larger portion of its sales and distribution will be done online by use of agents and on the website. This company will be headquartered in Riyadh, Saudi Arabia. This company is planning to launch its website, which shall act as an interface through which customers can lodge their requests. This company will be managed by a team of experienced professionals that comprise of its founders; Ibrahim, and Drake Phillip an assistant together with four other experienced persons. 1.2 Section II: Business Description 1.2.1 General Description of Business Novative Consultancy Inc. will be a business venture formed to be a strategic training and Consultancy Company that specialize in offering; accounting, advertising, marketing, career counselling, and Web-based business consulting services. This business will trade as private company limited by shares. The liabilities of the shareholders to creditors of Novative Consulting will be limited. This company shall have a two company directors, a secretary, two share issued on its incorporation amounting to $100, and a registered office in Riyadh, Saudi Arabia. The shares will be owned 95% by Ibrahim. Most of the activities of this company shall be online, and the physical office shall be established in accordance with the demands of the Companies Act 2006. The founder of Novative Consulting is Ibrahim. Ibrahim has vast experience in business planning, strategic planning, and have worked with the most successful blue chip companies in the United Kingdom for over seventeen years. He is a former chief financial officer at Deloite and Touché, an internationally recognized auditing company. He is also an ACCA graduate and a holder of MBA in strategic planning with vast experience in accounting, auditing, tax advisory, and strategic planning. Drake an assistant on the other hand is a well-versed career and marketing consultant. He has worked for three big corporations as a marketing director, and has also served as the chairman of the United Kingdom Marketers Board. He has an MBA in Marketing and has written five best-selling books on marketing and career consultation. One among his works which absolutely revolutionized marketing in most firms in United Kingdom; Excellence in Marketing: The New Era in Marketed Thinking will be the basic manual Novative Consulting will be using in its marketing consultations. 1.2.2 Industry Background Novative Consulting, Inc. will operate in the online business or e-commerce sector, where it will provide online based-services. According to Mirza (2009), the recent technological advancements have seen a number of people, considering the option of doing business online. This trend could be due to the fact that online businesses enable transactions to be carried out in an online means and have eliminated the traditional method of doing business where the client has to visit the service/product provider’s premises. Buyers of goods and services have also shifted their focus to online businesses since it is easier to conduct and saves time. The online business consulting industry includes several kinds of products and services like; business consultants, strategic planning firms, IT consulting firms, and software firms (Covello & Hazelgren, 2006). Consultancy is one among the many fields that has shifted to online business. . According to Mirza (2009), this type of business has been around for a number of years and has been unremittingly progressing. Earlier, for one to access consultancy services, he had to arrange for a meeting with the service provider or alternatively visit his premise. Online consultancy has helped ease clients off this trouble by enabling them acquire consultancy services at the comfort of their homes or offices simply by a click of a button. Online consultancy is currently offered in fields like, accounting and auditing, advertising, marketing and career counseling. What makes online consultancy an interesting area to do business is the present rush by most of their companies to use the internet and thee virtual world as a means of trade. This trend will see most companies establishing their presence in the growing virtual world. Novative Consulting will enter the market using three principles: Leverage its current relationship with prospects and customers Aggressive marketing of services Aggressive pursuance of strategic alliances 1.2.3 Corporate Fit Novative Consulting, Inc. will be a business with a simple structure since it will be operating online. It will not entail a lot of organizational occupations, and its setup will require a set of experts in a number of fields of business who will be offering the consulting services to clients. The business will have one administrator. A website by the address will be designed and will be made easily accessible and with adequate information regarding consultancy services the company offers. 1.2.4 Goals and Potential of the Business and Milestones Novative Consulting, Inc. has a vision of becoming a world class online consultancy firm known for quality, effective, and transforming consulting and advisory services. This firm shall assist individuals, companies, and businesses in their efficient allocation and utilisation of their resources through providing professional consulting services that no other consulting firm can offer. The guiding principles of this business will be: promoting client independence, expanding strategic thinking, integrity and honesty, collaborating with others, ensuring own competence, and acting as one organization. The objectives for growth of Novative Consulting are: Beginning ground breaking by January 2013 at a corporate retreat Bring in executives from around the world for an experience at the corporate retreat Operate an extremely successful enterprise that provides professional solutions Come up with a business package that provides the best consulting solutions in the market Continuously develop and coming up with new services that enhance efficiency and reduces costs for clients Continuously produce programs for college and high school to help them select appropriate careers in line with their strengths and interests. 1.2.5 Uniqueness of Product or Service Novative Consulting, Inc. will provide high-end strategic planning and business planning services and products to all types of individual and corporate clients. This company will sell products and services that will include; accounting, advertising, marketing, career counselling, and Web-based business consulting services. In addition, Novative consulting will conduct webinars, online business assessment and improvement products. These products and services have been developed to correspond to three key areas; professional consulting services, coaching packages, and training and career counselling. By capitalizing on the experience of its management team; together with the know-how of its founders, Novative Consulting will provide high-level consulting, marketing, auditing, and accounting products that will meet enterprise solutions. With expected funding, Novative Consulting seeks to patent and copyright audio, video, and e-book versions of the book Excellence in Marketing: The New Era in Marketed Thinking. This will enable its clients retain and effectively make use of the concepts and skills in this book. Novative Consulting, Inc. plans to facilitate online training by using the most advanced technologies and present users with a host of applications and other information that they are authorized to access. 2 Section III: Marketing 2.1 Research and Analysis 2.1.1 Target market (customers) identified Novative consulting’s target market will include businesses, individuals, students, and corporates who are looking to outside advisors to assist them. Their most important needs are process improvement, coaching, training, planning and project management, auditing, marketing, advertising, customer service and follow-up. According to Walton, Haller and Raffournier (2003), all business owners and managers require and need outside service and support, despite the fact that they are never willing to admit it. These business owners and managers may prefer to seek outside advice and assistance. They could prefer online consulting firms which are easily accessible and offer professional services like Novative Consulting offers. Their underlying needs are related to dependence and assurance and mostly they desire products that will help them achieve their objectives and goals. They need the assurance that they can find assistance any time they need it. 2.1.2 Market size and trends The most important and obvious trend in Novative Consulting’s market is the increasing lack of time and lack of knowledge. According to Kieso, Weygandt and Warfield (2011), a need has arisen among managers and business owners for outside professionals to provide a second opinion on the overall direction that their companies plans to take. This advice has been considered valuable and has totally transformed their operations and led to increased profitability. This trend has been true for years but recently it has accelerated with many companies trying to reinvent how they conduct their business and trying to get a grip of internet business. This new economic trend in the view of Alshehri and Drew (2010) is global in nature and most businesses and corporates are in need of outside professionals to assist them in accelerating the global economy. The second trend in the online consultancy market is the ongoing auditing systems formulated to keep companies on track. According to Plunkett (2009) businesses are continuously looking partners to provide them with ongoing support and auditing services to help them keep on track. The third trend is the emergence of online training, where majority of modern day firms are realizing greater returns on their education investments by allowing their companies to make use of online training. Research by Plunkett (2009) shows that internet or online business is growing considerably especially in the United Kingdom. Online businesses have been a great contributor to most countries GDP and are predicted to grow the online industry annually at a rate of eleven percent (Plunkett, 2009). Presently, the online industry accounts for 30% of the economy and is expected to grow. 2.1.3 Competition Novative Consulting Inc., operates in the online business consulting and training industry, which comprises products and service providers like; business consultants, strategic planning firms, IT consulting firms, software vending firms, and other online marketing and career planning firms. The clients, who frequent this sector, understand the concept of service and support and are much likely to pay for it when its offering is stated clearly. Novative competes much more against all the online consultants than against other providers of similar servicers. For effective completion, Novative consulting will go over and above normal online consulting practices by offering quality products that other firms cannot offer. The online market has several competitors, yet they do not offer a full-service package like Novative intends to do, for small, medium and large enterprises. Novative Consulting is planning to differentiate sufficiently so that they may not have to compete against these rivals firms. Below is a strength-weakness description and analysis of these competitors. Competitor Strength Weakness Strategic Planning Firms Good familiarity with career advice and drilling thousands of administrators They posse a pre-recorded methodology to strategic planning that does not comprise customization. Training is also mostly academics Accounting Firms National image large staff of consultants; experienced in the market; high volume Lacks product and service modification; poor support and service; no innovation IT Consulting Companies They tend to concentrate on IT integration; they are up-to-date with technology and skills; they have an international presence They are barely focused; do not appraise their work; College Career Consultants Customer attention and low hourly rates Knowledge is based on theory and not experience nor practicality; little time to focus on issues outside academics Small Online consulting Businesses Low hourly rates, customer attention, focus Limited in resources and staff; Inability to take many projects. Software and Marketing Firms National and international image; aggressive pricing; economies of scale Not providing one-on-one consulting without charging exorbitant fees; lack of quality customer service due to volumes of dealers Table 1.1 Strengths-Weakness analyses of competitors To counteract stiff completion from these rivals, Novative Consulting will focus on a few practices that will maintain a healthy growth. These practices involve emphasizing service and support, where they will continuously differentiate themselves from the canned presentation and box pushers. They will also focus on building relationship-oriented business with their clients. 2.1.4 Estimated market share Novative Consulting’s target market can be classified into six categories; small businesses, large enterprises, medium enterprises, VC firms, individuals, and start-ups. Their share, current growth, and expected growth patterns can be portrayed in the table 1.1 and chart 1.1 below. Potential Customer Growth 2010 2011 2012 2013 2014 Minor Business 4% 23,000,000 30,666,666.67 40,888,888.89 54,518,518.52 72,691,358.02 Outsized Enterprises 3% 50,000 66,666.67 88,888.89 118,518.52 158,024.69 Standard Enterprises 15% 2,300,000 3,066,666.67 4,088,888.89 5,451,851.85 7,269,135.80 Consulting firms Firms 2% 5,000 6,666.67 8,888.89 11,851.85 15,802.47 Start-ups 5% 1,500,000 2,000,000.00 2,666,666.67 3,555,555.56 4,740,740.74 Personages 5% 10,000 13,333.33 17,777.78 23,703.70 31,604.94 Average 6% 26,865,000 35,820,000 47,760,000 63,680,000 84,906,667 Table 1.2 Market share analysis Chart 1.1 Market share analysis Apart from the above market share estimations, Novative consulting, Inc. expects to make the following sales projections from its service lines or products (Table 1.3 and chart 1.2) Product/Services   share 2013 2014 2015 2016 2017 2018 2019 2020 Accounting Services 8.97% 700 787.50 885.94 996.68 1,121.26 1,261.42 1,419.10 1,596.49 Advertising Services 12.82% 1,000 1,125.00 1,265.63 1,423.83 1,601.81 1,802.03 2,027.29 2,280.70 Auditing Services 5.13% 400 450.00 506.25 569.53 640.72 720.81 810.91 912.28 Marketing Services 8.97% 700 787.50 885.94 996.68 1,121.26 1,261.42 1,419.10 1,596.49 Career Counselling Services 64.10% 5,000 5,625.00 6,328.13 7,119.14 8,009.03 9,010.16 10,136.43 11,403.49 Total Sales Volume 100.00% 7,800 8,775 9,872 11,106 12,494 14,056 15,813 17,789 Table 1.3 Sales projection from 2013-2020 Chart 1.2 Sales Vlume trend analyses 2.2 Marketing Plan 2.2.1 Market strategy—sales and distribution It has been the trend for clients seeking consultancy services to obtain them from the offices or premises of the service providers. Part of Novative Consulting’s service offering will involve use of sales executives and analyst visit with customers. A large portion of sales and distribution will be done online by use of agents and on the website. Web enabled service and products provision will minimize face-to-face visits and increase the chances of reaching out to a large customer base. 2.2.2 Pricing policy Novative Consulting, Inc. will surcharge fittingly for high-end, high-quality products and services it will offer. The revenue structures in place must continue to match the existing cost structure. The salaries paid to the professional staff will assure good service and support since they will be balanced by the prices charged. Fees charged per-hour will range from ninety-five to one hundred and ninety-five dollars per hour. The breakdown of services and product pricing is as follows: Accounting training and consulting at an average of $12,000 Auditing at an average of $50,000 Advertising at an average of $950 Marketing at an average of $50,000 Career counselling and coaching at an average of $2,500 All counselling will range from $195 to $395 Demonstrate how your pricing policy will result in a profit 2.2.3 Advertising and promotions plans Novative Consulting, Inc. will mostly depend on its advertisements in the website, email campaigns, email newsletters, direct mail advertising, seminars, and local TV as the main marketing avenues to reach its new clients. Most of these promotional avenues will change as the strategies change. Below is a closer analysis of these advertising strategies. In advertising, the core positioning message for Novative will be “consulting partners with a vision into the future”. This tag-line will work to differentiate this business’ services and products from competition. Advertising strategies used to promote products and services will involve: Local radio stations, television advertising, cable television, website, and Email promotions. In total, sales promotion is expected to cost the company $100,000 in the first year and a similar amount in the second and third years of operation. 3 Section IV: Operations 3.1 Identify Location Novative will be headquartered in Saudi Arabia. The leased facility has about 2000 square feet of space. The cost of the office is estimated at $10.75 per square foot, with the term lease expiring in December 2014, and an annual extension clause. Plans are being negotiated to move to a new facility with a bigger carrying capacity as the company grows after three years. Additionally, the company will launch its website, which shall act as an interface through which customers can lodge their requests. The website will be updated on a regular basis. The company is planning to invest considerable capital and time into programming the website to allow for more online consultation modules. 3.1.1 Advantages This location site is easily accessible and is an area that is served with an underground fibre optic cable. This will make internet access easy, cheaper and faster. 3.1.2 Specific operations and procedures The specific operational procedures shall entail the following steps: 1. Remission of the business name for a name search in the database of companies. 2. Securing of the name and the issuance of certificate of operation 3. Securing of licensing from the local authorities 4. Securing of the venue for locating offices from the local authorities And the start of operation 3.1.3 Personal needs and use The personal needs that the business shall require include toiletries, availability of space, and internet accessibility. These shall be used to make the working environment more conducive for the employees. 3.1.4 Zoning Zoning requirements are also favourable since the local authorities have limited the setting up of buildings. Novative Consulting is not planning to erect a new structure; rather it would lease an existing one. In addition, the local authorities have given the business a go-ahead to start their operations since they will not interfere with the image and character of the community. 3.1.5 Taxes The area is not taxed as the local authorities are in a bid to make more business friendly. Taxes required are the normal annual trading permits and county council fees. 3.1.6 Proximity to suppliers The location is also close to the internet service providers and other key office infrastructure providers. 3.1.7 Access to transportation The transportation costs will be lower, since most of the services will be offered online. The managers and staff have the privilege of working at home and will only visit the office once a week. 4 Section V: Management 4.1 Management Team—Key Personnel Novative Consulting’s management policy is based on mutual respect and responsibility. This policy is expected to help the staff at Novative consulting want to work because the environment encourages achievement and creativity. The initial team shall include six employees and is expected to grow to twelve by the end of year 2014, and seventy-two by the end of year 2018. The management team will consist of the following persons: a) Ibrahim the Chairman, founder and CEO. This executive has a degree in marketing from Harvard business School and an MBA in strategic management from the same institution. Bill is an experienced strategic planner of over seventeen years. In addition, Bill is a former chief financial officer at Deloite and Touché, an internationally recognized auditing company. He is also an ACCA graduate and a holder of MBA in strategic planning with vast experience in accounting, auditing, tax advisory, and strategic planning b) Drake Phillip, Vice-Chairman and Head of Operations. Drake is a well-versed career and marketing consultant. He has worked for three big corporations as a marketing director, and has also served as the chairman of the United Kingdom Marketers Board. He has an MBA in Marketing and has written five best-selling books on marketing and career consultation. One of his works which totally revolutionized marketing in most firms in the United Kingdom; Excellence in Marketing: The New Era in Marketed Thinking will be the basic manual Novative Consulting will be using in its marketing consultations. c) Sally June, Director of Marketing Consultation: Sally will bring six years of successful advertising and marketing expertise to Novative Consulting. d) Bills David, Chief Auditor: Bills has over twenty five years business experience in auditing, operations, and advertising. e) Agnes Joseph, Advertising consultant: Agnes recently left First National Bank after twenty-three years of committed service to join Novative Consultancy. She has extensive experience in banking in both consumer and commercial areas. Additionally she has also worked as an advertising director at the First National Bank. f) Joseph Wang, Career Advisor. Mr Wang has over ten years’ experience as a senior professor at Wisconsin State University. In addition he has worked as a career advisor for the same institution. 4.2 Legal Structure—Stock and Employment Agreements, and Ownership Novative Consulting, Inc. will be managed by a highly talented team of professionals as described above. This company will be funded by Mr Ibrahim and bank loans for the first initial four months of its operation. 4.3 Board of Directors, Advisors, and Consultants The board of directors will consist of the two executives, Mr Ibrahim, the Proprietor, Mr Phillip and one shareholder, Agnes Joseph. The business will increase its board holding capacity with time as it expands. 5 Section VI: Financial 5.1 Financial Forecast (Pro Forma Financial Statements) According to Kieso, Weygandt and Warfield (2011), the most significant aspect of the financial plan is the dire need for refining several of the important fundamentals that affects its cash flow. The following financial plan projections assume the following issues: A reasonable progress economy without major slump No unanticipated changes in occupational and expertise that will make products immediately superseded Admission to equity capital and sponsoring will be adequate to uphold the financial plan 5.1.1 Profit and loss Novative Consulting Projected Profit and Loss Statement Year Ended 31 Dec (amount in $) 2013 2014 2015 2016 2017 NET OPERATING REVENUES 60,000 80,000 106,667 142,222 189,630 Cost of goods sold (42,285) (56,380) (75,173) (100,231) (133,641) GROSS PROFIT 6,843 9,124 12,165 16,220 21,627 Selling expenses (981) (1,308) (1,744) (2,325) (3,100) Administrative Expenses (1,427) (1,903) (2,537) (3,383) (4,510) Research and Dev. Expense (3,152) (4,203) (5,604) (7,471) (9,962) Other income 359 479 638 851 1,135 Other expenses (221) (295) (393) (524) (698) Share of profit accounted under equity method 164 219 292 389 518 Other income from investors 28 37 50 66 88 Profit(loss) before finance costs and tax 1,613 2,151 2,868 3,823 5,098 Interest income 377 503 670 894 1,192 Interest Expense (364) (485) (647) (863) (1,150) Other financial result (233) (311) (414) (552) (736) Total financial cost (220) (293) (391) (521) (695) Income taxes (356) (475) (633) (844) (1,125) Profit(loss) for the period 1,037 1,383 1,844 2,458 3,277 Equity owners 1,033 1,377 1,836 2,449 3,265 Non-controlling interests 4 5 7 9 13 Table 1.4 projected income and loss statement 5.1.2 Cash flow Pro-forma Cash Flow for Novative Consultancy, Inc.   2013 2014 2015 2016 2017 Net Profit 1,037.0 1,382.7 1,843.6 2,458.1 3,277.4 Depreciation 125.0 166.7 222.2 296.3 395.1 Changes in Accounts Payable 120,481.0 160,641.3 214,188.4 285,584.6 380,779.5 Current borrowing (repayment) 27,000.0 36,000.0 48,000.0 64,000.0 85,333.3 Increase(decrease) other liabilities 50.0 66.7 88.9 118.5 158.0 Long-term Borrowing (repayment) 74,667.0 99,556.0 132,741.3 176,988.4 235,984.6 Capital Layout 5,000,000.0 6,666,666.7 8,888,888.9 11,851,851.9 15,802,469.1 Sub Total 5,223,360.0 6,964,480.0 9,285,973.3 12,381,297.8 16,508,397.0 less   - - - - changes in accounts receivable 51,116.0 68,154.7 90,872.9 121,163.9 161,551.8 Changes in inventory 16,587.0 22,116.0 29,488.0 39,317.3 52,423.1 Changes in other short term assets - - - - - capital expenditure - - - - - dividends - - - - - subtotal 5,155,657.0 6,874,209.3 9,165,612.4 12,220,816.6 16,294,422.1 net cash flow 5,000,000.0 6,666,666.7 8,888,888.9 11,851,851.9 15,802,469.1 cash balance 1,037.0 1,382.7 1,843.6 2,458.1 3,277.4 Table 1.5 projected cash flow statement 5.1.3 Break-even analysis Novative Consulting Inc. Projected break Even analysis   1 2 3 4 5 Monthly Units Break-even 650 731 823 925 1,041 Monthly Sales Break-even $ 126,750.0 $ 142,593.8 $ 160,418.0 $ 180,470.2 $ 203,029.0 assumptions:           Average Per unit revenue $ 70,000.0 $ 77,777.8 $ 86,419.8 $ 96,021.9 $ 106,691.1 Average per unit variable cost $ 3,875.0 $ 4,305.6 $ 4,784.0 $ 5,315.5 $ 5,906.1 Table 1.6 break-even analysis Chart 1.3 break even analysis 5.1.4 Budgeting plans Novative Consulting plans to raise five million dollars to fund its entry and growth within two years of its operation. Most of these funds will be availed by Mr Ibrahim. Income Streams 2013 2014 2015 2016 2017 Capital 1,000,000.00 1,000,000.00 50,000.00 20,000.00 10,000.00 Accounting 700.00 787.50 885.94 996.68 1,121.26 Advertising 1,000.00 1,125.00 1,265.63 1,423.83 1,601.81 Auditing 400.00 450.00 506.25 569.53 640.72 Marketing 700.00 787.50 885.94 996.68 1,121.26 Career Counselling 5,000.00 5,625.00 6,328.13 7,119.14 8,009.03 totals 1,009,813.00 1,010,789.00 61,886.88 33,121.86 24,511.09             Stationery 100.00 111.11 123.46 137.17 152.42 Equipment 500,000.00 500.00 555.56 617.28 685.87 Assets 500,000.00 500.00 555.56 617.28 685.87 Internet Service 1,000.00 500.00 555.56 617.28 685.87 Salaries 9,000.00 200,000.00 222,222.22 246,913.58 274,348.42 misc - 287.00 809,177.89                     1,009,813.00 1,010,789.00 224,012.35 248,902.61 276,558.45 Table 1.7 budget analysis 6 Section VII: Critical Risks 6.1 Potential problems Some of the potential problems, Novative Consulting face will face will be during the implementation year. These problems include; financial problems, lack of funding, economic upheavals, and change in government policies. A major problem or risk Novative Consulting will be is obtaining loan money from the bank. The regulations by the bank are a bit stringent since they need large amounts of collateral before they award loans. 6.2 Cost Control Some of the cost control measures that this firm shall employ include: Getting supplies from affordable suppliers and buying in bulk from them Employing the workers on contract basis Establishing home offices to reduce the number of workers at the main office Establishing a twenty-four hour work guideline 6.3 Obstacles and risks Nearly all organisations today are faced with risks in today’s economy and the services that Novative Consulting will be offering are no exception. The two most risky aspect of business are; putting too much trust on one business area that is intended to drive revenue streams and allocating the right amount of capital to the development of all business lines. In minimizing these risks, Novative consulting aims at having a solid mix of services and products which may be vulnerable to market downturns and budget cuts. 6.4 Alternative courses of action The management has developed contingency plans to help it mitigate the risks that have been described above. By providing a balanced mix of serviced and products, this risks are expected to reduce. In addition, Novative Consulting, has plans of expanding its sales efforts to increase the number of its corporate accounts in its core business to offset time required to enter its target market and generate revenue. 7 Section VIII: Harvest Strategy 7.1 IPO or Liquidity event The company does not have immediate plans of an IPO, but has hopes of issuing an IPO after about twenty-years of operation. 7.2 Transfer of asset In case, the business will be wound up unexpectedly, the assets will be transferred first of all to the owners, and the remaining to the existing shareholders on percentage of contribution basis. 7.3 Continuity of business strategy Novative Consulting, plans to acquire or conduct an initial public offering (IPO) after six years of this business plan. This company may even opt to buy back the shares outside investors. These two strategies are targeted at providing a remuneration event for the investors and personnel who have helped to build the company. Additionally, this company has intentions of being actively involved in acquisition and mergers in the fifth year of this business plan. This will ensure continuity of business. 7.4 Identity of successor After seven years of this business plan, the founders will transfer the ownership of the business to shareholders. At the time, the employee base will have risen to over twenty employees and the shareholder base also with a similar margin. 8 Section IX: Milestone Schedule 8.1 Timing and objectives The implementation objectives of Novative consulting shall be effected as displayed in the milestone schedule below. 8.2 Deadlines and milestones Milestones Start Date End Date Budget ($) registration and licencing of business Jan-13 Feb-13 100 Complete funding Feb-13 Mar-13 5,000 Complete business game plan Mar-13 Apr-13 100 Hire of Personnel Apr-13 May-13 100,000 Developing website May-13 Jun-13 200 Developing municipality vertex Jun-13 Jul-13 600,000 developing strategic plan Jul-13 Aug-13 4,000 Sales promotion Aug-13 Sep-13 1,000,000 receiving first revenue Sep-13 Oct-13   Totals     1,709,400 8.3 Relationship of events The events are related in such a manner that one starts as the other ends. 9 Section X: Appendix or Bibliography References Alshehri, M., & Drew, S. (2010). Challenges of e-government service adoption in Saudi Arabia from an e-Ready citizen Perspective, World Academy of Science, Engineering and Technology, vol. 42. Covello, J. A., & Hazelgren, B. J. (2006). The complete book of business: Simple steps to writing powerful business plans. Naperville, IL: Sourcebooks, Inc. Kieso, D. E., Weygandt, J. J., & Warfield, J. D. (2011). Intermediate accounting: IFRS edition. Danvers, MA: John Wiley & Sons. Plunkett, J. W. (2009). Plunkett’s e-commerce and international business almanac 2009. Houston, TX: Plunkett Research. Mirza, A. A., & Holt, G. (2009). Wiley IFRS: Practical implementation guide and workbook. Danvers, MA: John Wiley & Sons. Walton, P., Haller, A., &Raffournier, B. (2003). International business planning. (2nd ed.). Belmont, CA: Thomson Learning. Appendix Company Logo Read More