1.0 Executive Summary
This business plan has been developed to secure $75,000 of capital for the development of a small business focused consulting firm based in Pennington, New Jersey. Consulting Firm LLC (“the Company”) was founded with the intentional providing a broad range services specific for the needs of enterprises that are launching their operations or established businesses seeking to expand. Full scale revenue generating operations will commence in the fourth quarter of this year.
Operations
The primary revenue center for the business will come from providing ongoing consulting and advisory specific for the needs of small businesses. The Company’s average client will generate between $500,000 to $1 million a year of revenue. The scope of the Company’s consultations will include budgeting, marketing, expansion, capital, and other related matters specific for the ongoing operations of a smaller scale enterprise. The Company will charge $150 to $200 per hour for it services. Project base services will also be available.
The Company second revenue center will come from providing market research reports among small business clients that are looking to develop a presence in a new market. This is an important part of the Company’s operations as it will provide a significant differentiating factor.
The third section of this consulting business plan will further discuss the operations of the business.
The Financing
At this time, the Company seeking $75,000 a capital for the development of the consulting firm’s operations. The Founder will contribute $35,000 towards the venture. A significant portion of this capital will go towards the development of the Company’s location in Pennington as well as for furniture, fixtures, and equipment.
As the Company expands, the business would be a strong candidate for a working capital line of credit given the highly predictable streams of revenue that will be produced from consulting operations.
The Future
The Company will continue to hire staff consultants that will work alongside the Founder in order to render a comprehensive degree of strategic planning and advisory services. The business will also continue to expand the scope of its marketing operations in order to attract clients throughout the country.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The consulting firm startup capital will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Consulting Firm LLC.
2.3 Exit Strategies
The most likely sales scenario would be to work with staff consultants that would engage a buyout from the founder. This event is not expected to occur for a significant period of time. Prior to this event, a formal valuation would be conducted. Generally, most consulting firms have a sales price equal either to the prior year’s revenue or three times EBITDA.
3.0 Operations
As noted in the executive summary, this consulting firm has been designed to provide comprehensive advisory services encompassing a number of business disciplines. The Company will operate in a generalist capacity so that services can be rendered to any type of smaller scale enterprise.
Most importantly, the Company will work with its clients in order to render services on an ongoing basis. This will create a highly predictable revenue that will fully support the underlying operations of the business.
In addition to providing strategic advisory services, the Company will also be actively engaged in providing comprehensive market research reports. This will allow the consulting firm to assist small business owners as they develop and expand their operations into new markets. A significant scope of these market research reports will be focused on determining the economic viability of a business expansion.
4.0 Overview of the Organization
4.1 Registered Name
Consulting Firm LLC. The Company is registered as a limited liability company in the State of New Jersey.
4.2 Commencement of Operations
The consulting firm will commence operations in the fourth quarter of this year.
4.3 Mission Statement
To operate is a widely respected small business consulting firm.
4.4 Vision Statement
To serve as a beacon of competent advice for small business owners.
4.5 Organizational Objectives
• Properly onboard clients that are seeking comprehensive advisory services for their business growth needs.
• Establish ongoing relationships with accountant attorneys that will provide referrals.
• Maintain strong relationships with financing companies so that referrals can made among small business clients seeking funding.
• Use multiple online marketing strategies to increase the consulting firm’s brand visibility.
• Frequently attend small business tradeshows and expositions.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the consulting firm business plan will focus on the current economic climate, the competition, the client profile, and the industry.
At this time, the economic climate with the United States is moderate. As a result of significantly changing trade policies, there has been a significant degree of inflation introduced to the market. Numerous federal agencies are taking the appropriate measures to lower inflation.
However, these issues will only have a modest impact on the consulting firm. Given the challenging nature of today’s economy, many small business owners are seeking comprehensive advisory services in order to strengthen their enterprises.
5.2 Industry Analysis
They are over one million consulting firms within the United States. Aggregately, these Company’s produced $400 billion revenue. The expected growth rate of this industry is expected to remain strong in the coming years given the rapidly changing nature of today’s economy, especially as it relates to automation technologies. The consulting firm is in a strong position to assist small business enterprises with navigating in ever changing business climate.
5.3 Customer Profile
Any small business is a potential client for the Company. Generally, these businesses will typically generate less than $1 million of revenue. They will typically spend $5,000 to $10,000 per engagement with the business.
5.4 Competitive Analysis
Consulting is a highly fragmented industry, and the Company will face ongoing competition from highly established firms. The primary way in which the business will differentiate itself is through it’s fully integrated consulting solutions coupled with market research capabilities.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Consulting Firm will have sustainable operations as a result of the following:
• The owner is a highly experienced business consultant that will be able to on board clients rapidly.
• The ability to provide market research will further create a major differentiating factor.
• Strong demand among small business owners in order to have a comprehensive understanding of how to navigate the world’s economic challenges.
• The Company will on board consultants with specialized expertise.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the Company’s marketing operations.
• Higher additional consultants that have unique specialties among numerous business disciplines.
• Integrate additional types of consulting services.
7.0 Marketing Plan
7.1 Marketing Objectives
• Conduct extensive direct outreach with small business associations throughout the United States.
• Leverage multiple forms of online marketing to create brand awareness.
• Foster ongoing relationships with attorneys, accountants, and third-party consultants for referrals.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $783,000.
• Gross profits will reach $744,000.
Year 2
• Revenue will reach $979,000.
• Revenue will increase by 25%.
Years 3-5
• By the fifth year of operation, total revenue will reach $1.69 million.
• Gross profits will reach $1.6 million.
7.4 Marketing Strategies
The Company will use a number of marketing strategies that will create significant awareness for the consulting firm among us targeted demographic of small business owners of the United States. Most importantly, the Company’s online platform will showcase every aspect of operation. This platform will undergo significant search engine optimization so that when searches specific for small business consulting and market research is conducted, the website will appear frequently in the search results. This will be accomplished the ongoing creation of content specific for small business owners.
In regards to social media, the Company will maintain expense presence on LinkedIn. Here, the Company will use multiple methodologies to increase profile views, including targeted advertisements.
Management will also frequently attend trades and expositions that are geared towards small business owners across a wide spectrum of industries. At these events, the Company will distribute literature showcasing its advisory capabilities as well as it’s market resource services.
The Company will extend this to include attendance at events that are specific for CPA’s and attorneys that frequently work with small businesses. The Company sees a significant opportunity to partner with these firms in regards to ongoing referrals.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Consulting Firm will have a compounded annual growth rate of 21%.
• Management will contribute $35,000 towards the development of the consulting firm.
• The Company will acquire a $75,000 business loan.
9.2 Financial Highlights
• Significant contribution margins on all consulting services.
• The Company will earn substantial fees from its market research work.
9.3 Sensitivity Analysis
Given today’s changing economy, there is a significant demand for strategic advisory services that allow for ongoing growth among small enterprises. The consulting firm will have control operating costs which will allow with the business to remain pricing competitive while ensuring profitability.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Limited competition among consulting firms that have integrated market research capabilities.
• The founder has extensive experience operating as a small business consultant.
• The operations of this business are highly scalable, and the Company can source clients on a nationwide basis.
Weaknesses
• Ongoing competition for more established firms.
• Moderately high cost related to payroll.
Opportunities
• Continued hiring of consultants with specialized expertise.
• Expansion of operations to include other types of consulting that can create recurring revenue.
• Expansion of the number of offices operate by the business.
Threats
• Incredibly severe economic recession could impact operations.
Appendix B – Risk Analysis
Development Risk – Low
The primary matter needs to be addressed is securing the business loan discussed in this document. The Company has already begun initial marketing operations.
Financing Risk – Low/Moderate
The capital will be principally used for buildout and tangible asset purchases. The risk related to this loan are offset by the substantial contribution margin generated from ongoing consulting engagements.
Marketing Risk – Low
The Company will use an expand on the marketing strategies in order to create a client base. These risks will be tempered through direct outreach, attendance at small business events, and online marketing strategies.
Management Risk – Low
The founder is an experienced small business consultant with more than 20 years of experience in industry. He will be able to properly establish the businesses operations to profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The business can generate recurring shows of revenue through certain service centers.
• Strong demand for comprehensive advisory services in any economic climate.
Exit Risk – Low
As noted earlier, the primary sales strategy for the business would be a buyout with staff consultants. This is not expected to occur for a minimum of 15 years.