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1.0 Executive Summary
The purpose of this business plan is to raise $100,000 for the development of a credit monitoring business while showcasing the expected financials and operations over the next three years. Credit Monitoring Service, Inc. (“the Company”) is a New York based corporation that will provide credit monitoring services, and when necessary – credit repair services to customers in its targeted market. The Company was founded by John Doe.
1.1 Operations
Credit Monitoring Service, Inc. will provide customers with a high level of credit repair services that seek to alert customers to blemishes on a client’s credit report among the three major credit bureaus. Approximately 40% of the US population has issues with their credit profiles and as such, the market for knowing a credit score is very strong. The Company will charge approximately $30 per month for these services. It will provide customers with a highly recurring stream of revenue.
The business will hire also licensed debt advisory and credit counselors that will work directly with both clients and lenders in regard’s to a client’s credit profile or debt issues if they are detected by the Credit Monitoring Service. The business will receive fixed fees for these services.
The third section of the business plan will further describe the services offered by Credit Monitoring Service, Inc.
1.2 The Financing
Mr. Doe is seeking to raise $100,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:
Development of the Company’s office location.
Financing for the first six months of operation.
Capital to purchase FF&E and computers.
Mr. Doe will contribute $10,000 to the venture.
1.3 Mission Statement
Credit Monitoring Service’s mission is to assist people with understanding and protecting their credit through continual monitoring.
1.4 Management Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the credit industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Credit Monitoring Service, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, Credit Monitoring Service, Inc. requires $100,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of Credit Monitoring Service, Inc.
2.5 Exit Strategy
If the businesIf the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of Credit Monitoring Service, Inc. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Operations
The primary revenue center for the business will come from the ongoing monitoring of credit reports among people that are enrolled in the Company’s services. As stated in the executive summary, the business will charge approximately $30 per month for these services. The business will have acess to any new alarts from all three major credit bureaus. The busienss will have a website where individuals can login to see their credit report and read any new notifications regarding their accounts.
This stream of income will provide a recurring stream of revenue for the business, which will substantially increase the Company’s valuation.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the credit monitoring and counseling industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic market condition in the United States is moderate. Unemployment rates have declined while asset prices have increased substantially. However, it should be noted that credit counseling and credit repair businesses typically operate with a great degree of economic immunity as people will continue to require these services on an ongoing basis. As such, Management feels that the current economic climate is actually an excellent time to launch this type of business.
4.2 Industry Analysis
The credit management industry (which includes credit monitoring) represents over 5,000 established businesses that employ more than 15,000. Each year, these businesses aggregately generate more than $2 billion dollars a year of revenue and provide gross annual payrolls of $600 million dollars. The growth rate for this industry has been tremendous over the last five years as the growth of financial transaction over the Internet has increased significantly. Over the last five years, the number of agents operating within this market more than doubled, with income received by these firms increasing more than 300%.
As lending has become much more scientific over the last fifteen years with the implementation of electronic credit reporting, FICO scores, and electronic employment records, the need for consumers to maintain strong credit profiles is tremendous.
4.3 Customer Profile
Management expects that a diverse group of people will use the Company’s credit monitoring (and from time to time credit repair) services. The business, after obtaining licensure to operate in multiple states will be able to effectively assist thousands of people with their credit monitoring needs. Approximately 40% of adult Americans have some form of issue with the credit profile. As such, the potential market for this type of service exceeds 70 million people. Mr. Doe expects that the average income of a customer will be $28,000 to $45,000 per year.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
Credit Monitoring Service, Inc. intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
Establish relationships with accountants within the targeted market.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow Credit Monitoring Service, Inc. to easily target men and women within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public.
Credit Monitoring Service, Inc. will also use an internet based strategy. This is very important as many people seeking local and regional service providers, such as credit monitoring and repair companies, now the Internet to conduct their preliminary searches. Mr. Doe will register Credit Monitoring Service with online portals so that potential customers can easily reach the business. The Company will also develop its own website showcasing the services offered by the business, allowing people to login and see issues that may be detected on their credit reports, the Credit Monitoring Service’s team of, and relevant contact information.
The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the credit monitoring and ancillary services that the Company is offering. Mr. Doe will also develop ongoing referral relationships with accountants within the Company’s local market who will refer clients with significant credit issues and need to have their credit reports continually monitored. In time, this will become an invaluable source of new business for Credit Monitoring Service, Inc.
5.3 Pricing
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
Credit Monitoring Service, Inc. will have an annual revenue growth rate of 16% per year.
The Owner will acquire $100,000 of debt funds to develop the business.
The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
The Company’s revenues are not sensitive to changes in the general economy. In fact, during deleterious economic conditions (like the current economy), Mr. Doe expects an increase in revenue as more people turn to credit monitoring services to make sure that they do not have any credit issues. Additionally, the Company generates high margin income from its services, which will allow Credit Monitoring Service, Inc. to thrive in any economic climate.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
