Consultant FaHQcilitation b Plan

8/11/2019 Consultant FaHQcilitation b Plan

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Consultant HQ

May1998

Carl Netts500 Malton StreetTekkton, Kansas 02000

(007) 630-0000(007) 630-0001 - fax

This sample NxLeveL Start-up Business Plan was originally written by a classparticipant, and subsequently modified to protect proprietary information. As it is primarilya students work, it is not represented to be a perfect business plan, although thepresentation is in keeping with the NxLeveL format and content. It can be used as asample of what a business plan might contain, and as a model for constructing the varioussections.

Your instructor may ask that you review certain sections and suggest improvements,modifications or additions. The purpose of each individual business plan may be different,with varied intended readers. You may also be asked to discuss what information mightneed to be included or deleted based on the purpose of the plan.

March 2000 NxLeveL Training Network . All rights reserved. No part of this Sample Business Plan may be reproduced, storedin a retrieval system or transcribed in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise)for personal use outside of the NxLeveL Training Programs , without the prior written permission of the publishers, NxLeveL

Training Network , University of Colorado at Denver, Campus Box 128, P.O. Box 173364, Denver, Colorado 80217-3364 Phone:800-873-9378 Fax: 303-556-6651
http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/http://www.nxlevel.org/


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TA B LE O F C O N TEN TSEXEC U TIVE SU M M A RY .......................................................................3

M ISSIO N , G O A LS, A N D O BJEC TIVES..............................................5G EN ERA LDESC RIPTIO N O F TH EBU SIN ESS............................................................5MISSIO N STATEM EN T..................................................................................5G O A LS A N DO BJEC TIVES ..............................................................................6

BA C KG RO U N D IN FO RM A TIO N .......................................................7TH E IN D U S TRY.........................................................................................7TH EBU SIN ESSF IT...................................................................................8

O RG A N IZA TIO N A L M A TTERS...........................................................9BU SIN ESSSTRU C TU RE, M A N A G EM EN T A N DPERSO N N EL.............................................9RISK MA N A G EM EN T..................................................................................1 0

TH E M A RKETIN G PLA N ..................................................................1 1TH EPRO D U C TS/ S ERVIC ES...........................................................................1 1TH EMARKETAN A LYSIS...............................................................................1 4MARKETIN GSTRA TEG IES.............................................................................1 8

TH E FIN A N C IA L PLA N ...................................................................2 1BREA K EVEN A N A LYSIS.................................................................................2 2C A S H FLO W A SS U M PTIO N S...........................................................................2 3C A S HFLO W PRO JEC TIO N S...........................................................................2 4PRO JEC TED IN C O M E STATEM EN TS...................................................................2 6BALAN C E SH EET..................................................................................2 8STATEM EN T O F O W N ERS EQ U ITY............................................................2 9

A PPEN D IC ES LISTIN G ....................................................................3 0A- O W N ERRESU M E...............................................................................................................3 1B- MARKETIN GMA TERIA LS.....................................................................................................3 1C - MEM BERSH IPAG REEM EN TFO RM......................................................................................3 1D- S A LESFO REC A S TPRO JEC TIO N S AN DAS SU M PTIO N S............................................................32

E- FIXED ASSETS....................................................................................................................3 5F- STA RT-U P EXPEN SES..........................................................................................................3 6

G - AD VERTISIN G BU D G ET(YEAR 1 A N DYEAR 2 ).....................................................................37H- KAN SASBU SIN ESSDIREC TO RYRES O U R C E S..........................................................................39I- RELA TEDTRADEASSO C IATIO N S...........................................................................................3 9J- O TH ERRELA TEDMA TERIA LS.................................................................................................3 9


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slow ly, if at all, due to the lim ited num ber of hours, co nsultants, and businesses seeking

professional services at any one tim e in Kansas, and (7 ) the difficulty in recruiting and retaining

experienced , professional consultants to b e a m em ber of C O N SU LTAN T H Q w hen they have

already developed a netw ork and are only guaranteed at least one p roject through C O N SU LTA N T

H Q .

In o rder for C O N SU LTA N T H Q to overcom e these cha lleng es, further research and tim e

reg arding the feasibility and potential success of C O N SU LTA N T H Q on the part of the ow ner

w ould be necessary. A t this point, I am no t prepared to undertake this project; as the level of

com m itm ent and tim e necessary to w ork through these challenges surpasses w ha t I am w illing to

give.

Beyond m y w illingness to com m it to C O N SU LTA N T H Q , I question the overall long-term success

of C O N SU LTA N T H Q . A s the financial statem ents dem onstrate, a net incom e can be achieved,

but it w ill be a m inim alnet incom e. The w ho le purpose of this type of business is to help other

businesses succeed and grow ; in accom plishing this, C O N SU LTAN T H Q is not able to charge a

high m em bership fee, nor can it raise its com m ission rates. It all revolves back to the

ideaa lthough w ell-intend edtha t a netw orking service show s a clear benefit and is w orth the

investm ent. For consultants, netw orking is often m ost effective w hen potential clients are

directly co ntacted. For sm all to m edium size businesses, choosing a consultant is m ost

successful through the testim onies of other business ow ners w ho ha ve used a specific

consultant. A t present, there does no t seem to be a m arket tha t is dem and ing a service business

such as C O N SU LTA N T H Q . A s the m arket continues to m ature, businesses are dow nsized,and m ore consultants enter into their ow n b usiness, then, perhaps, there w ill be a m arket for

C O N SU LTA N T H Q in w hich it can generate a profit, grow , and succeed. Even then, the incom e

to be achieved w ill be m inim al.

C om pleting this business plan - even after it w as concluded that C O N SU LTAN T H Q w ould no t bea viable business at this tim ew as necessary in o rder to realize the full opportunities and

challenges this type o f business faces at present and in the future. A lthoug h I have chosen not

to pursue C O N SU LTA N T H Q at this point, this business plan (and its process) serves as a guide

if and/ or w hen I consider starting a business like C O N SU LTA N T H Q in the future.


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M ISSIO N , G O A LS A N D O BJEC TIVES

G eneral D escription of the B usiness

C O N SU LTA N T H Q is a full-service consulting firm that specializes in facilitating relationships

betw een business ow ners and professional consultants. C O N SU LTA N T H Q has tw o distinctcustom er groups: professiona l consultants and the sm all to m edium -sized b usinesses in Kansas.

Kansas has the largest percentage of sm all businesses in the U nited States, and because of their

size, business ow ners often contract out for professiona l services such accounting and m arketing

to foreg o the expense of hiring a full-tim e em ployee. C O N SU LTA N T H Q provides these

businesses a central source for inform ation. C O N SU LTA N T H Q m aintains a m em bership file for

professional co nsultants in the surrounding area listing the services and expertise o ffered, as

w ell as other pertinent inform ation a bout the consultant, thus allow ing the business to contact the

appropriate consultant w ith ease. From the consultants perspective, the need to netw ork and

com m unica te his or her area of expertise and services is clearly evident. N etw orking takes

considerable tim e, and by serving as an agent,C O N SU LTA N T H Q w ill provide an outlet for all

Kansas consultants to advertise their services directly to those businesses seeking advice.

C O N SU LTA N T H Q is in the developm ental stages, but once stable, its potential for exp ansion is

considerable. The netw orking service m ay be offered to consultants outside K ansas and

expand ed into surrounding regions and other areas tha t dem onstrate the entrepreneurial spirit of

Kansas. O nce the system of contact, follow -up, and service is standardized, C O N SU LTA N T

H Q could be expanded into all regions w ith operation left to an executive director.

M ission Statem ent

C O N SU LTA N T H Q is a full-service consulting firm that specializes in facilitating relationships

betw een sm all businesses seeking professional, qua lity services and professional co nsultants

seeking new clients. W e a im to provide personalized service, exhibit genuine concern for all

custom ers, and dem onstrate ethica l beha vior in furthering our success and the success of our

clients.


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BA C KG RO U N D IN FO RM ATIO N

Backg round Industry Inform ation

C O N SU LTAN T H Q is breaking ground in an industry that has show n high percentages of grow th

and success w ithin the last tw enty years. The consulting business ha s developed due tocorporate dow nsizing , techno logica l developm ents and the outsourcing of business functions.

C orporate professionals ha ve taken their expertise and left the co rporate structure to start their

ow n consulting businesses. The dem and for professiona l consulting services has stem m ed from

the need of sm all and m edium businesses to outsource and hire indep endent contractors (rather

tha n hire full-tim e em ployees) to save m oney. By outsourcing , these businesses avoid the cost of

em ployee benefits and taxesquite attractive to a sm aller business tha t m ay not need these

professional services on a full-tim e basis. C onsulting businesses ca n be large team s of

professionals or a one-person office. Size is irrelevant to qua lity service. This encourages start-

up s w hich furthers the grow th of the co nsulting industry.

C urrent and Future Trends

A s the consulting industry continues to grow , there m ay be a tim e w hen the m arket becom es

saturated. Kansas is an excellent place to do consulting due to the num ber of sm all to m edium

sized firm s. H ow ever, as w ith any ind ustry, if the supply of services surpasses the dem and ,

the ind ustry w ill show signs of chang e. C onsultants m ay low er their fees or seek w ork outside

the im m ediate a rea w hile forcing the less successful consultants to go out of business. This

cyclehelps to restore the balance of supply and dem and in the consulting industry.

C urrently, profit m argins are relatively high in the consulting industry. O perational and start-up

expenses are m inim al; therefore, depend ing on the fee, a consultant can reach high p rofit

m argins. This m argin is obtained a ssum ing the cost of ed uca tion has been paid. Because

consulting proves to be a lucrative business, this fact serves as an incentive for start-upsthus,

encouraging grow th to continue.

C onsulting m ay becom e m ore specialized. M anagem ent consultants w ill be exp ected to assist

w ith sexual harassm ent training, im plem entation of the A m erica ns w ith D isabilities Act, and

cultural transform ations that m ight includ e total qua lity m ana gem ent (TQ M ) training . 1

Specialization in a ll areas of expertise w ill be expected: m arketing consultants w ill specialize in

brochure and graphic d esign, sales, or other area s and accountant w ill be req uired to know tax

1 Tom pkins, N eveill C . Specializa tion fuels grow th of consulting . H R M agazine July 19 9 5 , v4 0 , n7 , p11 0 (4)


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accounting, cost accounting, and the latest com puter softw are a ids. It w ill be the consultants

responsibility to focus on the area needing m ore em phasis.

Background o f C O N SU LTAN T H Q and its fit

The idea of a netw ork agency nam ed C O N SU TLA N T H Q originated from the d ifficulty a young,

sm all, or start-up co nsultant has in identifying clients and finding business. N etw orking is the

key to finding business, and although C O N SU LTA N T H Q is not designed to rep lace this function

for a consultant, it w ill serve to facilitate relationships betw een new clients and the co nsultant.

Likew ise, sm all and m edium businesses often need professiona l services, but are not w illing to

hire full-tim e em ployees to m eet the need. W ord of m outh and referrals are usually the source

businesses use to find a consultant. C O N SU LTA N T H Q provides these personalized services,

but the difference lies in the selection of the consultant. C O N SU TLA N T H Q offers a choice of

consultants in the desired area of expertise w ith a choice of price ranges, personalities, and

locations. In sum m ary, C O N SU LTA N T H Q offers the sm all business a central source ofinform ation and a selection of choices to m eet its needs.

C O N SU LTA N T H Q is a start-up business. It fits w ell w ithin the ind ustry due to the increased

num ber of consultants in the m arket and the num ber of sm all and m ed ium sized businesses w ho

choose to loca te o r expand into Kansas. It fulfills the need of businesses seeking professional

services and of consultants seeking new clients.


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O RG A N IZATIO N A L M A TTERS

Business Structure, M anagem ent, and Personnel

Business Structure

C O N SU LTA N T H Q is a sole p roprietorship. It requires only the expenses associated w ith doingbusiness, such a s office equipm ent, pho ne lines, and m arketing m aterials. The risks associated

w ith this business are sm all, and w hen recruiting consultants to becom e m em bers of

C O N SU LTA N T H Q s netw ork, each consultant w ill be required to carry his or her ow n

professional liability insurance policy.

C O N SU LTA N T H Q is a netw orking agency; it does not provide the a ctual consulting services,

and the sm all business is the party responsible for choosing the consultant it w ill w ork w ith. A s

a younger person, I ha ve few er assets and therefore, the extent of m y financial and personal loss

is m inim al. I am the ow ner and m anger and assum e the earnings or losses in m y ow ner personalincom e taxes.

M anagem ent, Personnel, and O utside Services

A s sole ow ner and m anager of C O N SU LTAN T H Q , I represent the m anagem ent team . I have

an education and professiona l background in m arketing , and I ha ve assisted in several consulting

projects. I possess a strong w ork ethic, excellent organiza tional skills, and good w ritten and

oral com m unica tion a bilities. The success of Kansas sm all businesses is vital to the States

econom y, and in crea ting C O N SU LTA N T H Q , I aim to p rovide a resource to those businesses

seeking to im prove and grow . (Please see resum e in Appendix A )

A s C O N SU LTA N T H Q grow s, I w ill be hiring a part-tim e adm inistrative assistant. D ue to the

nature of this business, typ ing, filing and com m unication skills w ill be required of this person.

H e or she w ill be expected to w ork ten hours a w eek in the beg inning from 9 :0 0 a.m . to 1 1 :00

a.m . I w ill use one o f the p ersonnel services in Tekkton to locate a qua lified person for this

position, and then, I w ill further train them m yself on the business concept of C O N SU LTA N T H Q

and the im portance of custom er service.

Beca use C O N SU LTA N T H Q has m inim al expense built into its structure, no production orm anufacturing of products, and no actual selling of products, the dem and for outside services is

sm all. I w ill com plete courses in accounting and taxes to refresh m y m em ory for running the

everyday operation so the business. H ow ever, I w ill hire the services of an accountant to file m y

tax return and consult w ith on a quarterly basis, or as needed. D epend ing on the extent to

w hich I m ust rem ind clients to pay their m em bership fees, I m ight consider using an outside


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collection agency. I do not w ant to hassle m y clients for their fees w hen m y priority is finding

them business and furthering their success. I realize, though, that I m ust collect their fees to

obtain a profit, and a collection agency m ay be the best w ay to do it. I w ill budget for the

services of a law yer, but this exp ense w ill be lim ited to approxim ately tw o hours of consultation.

Beca use of the nature of C O N SU LTA N T H Q , it is im portant to be aw are o f possible leg al issuesarising because o f contract term s and / or the extent of C O N SU LTA N T H Q s liability to the

consultant and the business.

A n advisory board m ade up of consultants and business ow ners w ill be organized as I identify

ind ividuals w ho have expertise and interest in the consulting profession and w ho have a n

entrepreneurial spirit. This group of ind ividua ls w ill ha ve no direct im pact on m y business, no r

w ill they have shares of the business. Ra ther, I w ill seek advice from them to help m e identify

areas of C O N SU TLA N T H Q w here I can im prove or offer better service. This advisory board

w ill be m ore like a focus group. A s C O N SU LTAN T H Q grow s, a sm all stipend m ight beissued to those ind ividuals serving on m y advisory board.

Risk M anagem ent

A s I stated earlier, consultants on file w ill have their ow n professional liability insurance. I w ill

ha ve a general liability insurance policy and m edica l insurance for m yself, but other than these

item s, I do not foresee other insurance policies. A s the business grow s, I w ill investigate the

policies and organiza tiona l structures available to m e to ensure that m y assets and

C O N SU LTAN T H Q w ill survive past m y ow nership.


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TH E M A RKETIN G PLA N

The Products/ Services

Product/ Services D escription C O N SU LTA N T H Q offers one p rim ary service to each of its tw o custom er groups. To the

consultant, C O N SU LTA N T H Q offers a netw orking service. C onsultants currently are

responsible for finding business throug h developing their ow n netw orking skills or throug h the

testim onies of existing clients or fellow professiona ls. C O N SU LTA N T H Q offers the consultant

m arket the opportunity to offer their services to interested custom ers w ithout the tim e

com m itm ent required to actively seek new clients, but w ith the personalized custom er service

necessary to recruit a new client.

C O N SU LTA N T H Q offers the sm all to m ed ium sized businesses in this reg ion a professionalservice. Businesses seeking outside expertise have a central source to contact in find ing the

rightconsultant for the job. Tem p agencies or sm all business developm ent advocates m ay be

able to refer several consultants to a business, but C O N SU LTA N T H Q has profiles of

consultants w ith va rying areas of expertise and personalities in w hich the business ca n resea rch

to find the right fit. C O N SU LTA N T H Q is a neutral party and serves only to m atch consultants

w ith businesses.

Features/ Bene fits

The netw orking service offered to surrounding consultants has several features. For a reasonable

annual fee, the consultant signs a contract (See A ppendix) w ith C O N SU LTA N T H Q that entitles

him or her to the follow ing : 1 ) a continuously updated consultant file m ade available to

interested clients show ing areas of expertise, education, backg round, and a persona lity profile o f

interests and values, 2 ) a m oney-back guarantee if C O N SU LTA N T H Q does not find at least one

lead for the consultant w ithin one year, 3 ) an option to term inate the contract up to the ninth

m onth for any reason and receive a percentage of the original fee back based on the num ber of

m onths rem aining in the contract year, 4 ) a persona l, non-biased representation of the consultant

to the client w ith a contract clause stating tha t inform ation on file has been approved by theconsultant and sha ll be w ithheld from com petition a t all tim es and to the client until at w hich

tim e the client w ishes to proceed w ith hiring the co nsultant, and, in the future , 5 ) an option to be

listed as co-insured under C O N SU LTA N T H Q s professiona l liability insurance policy.

C O N SU LTAN T H Q charges an annua l fee of $ 2 4 0 ($ 2 0 / m onth) to keep consultant files on

record a nd a 1 0 % com m ission on projects over $ 5 0 0 . Projects in the price range of $ 2 5 0 -


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$ 4 9 9 are based on a 5 % com m ission, and projects less than $ 2 4 9 are entirely paid to the

consultant.

In return for purchasing this service, the consultant receives the benefits of increased business,

convenience, tim e-saving s, a targeted approach to the recruitm ent of new clients, and security in

know ing he or she has the option of term inating the contract if C O N SU LTA N T H Q does not live

up to the consultants expectations.

The professiona l service offered to sm all and m edium sized businesses has several features as

w ell. C O N SU LTA N T H Q offers 1 ) specializa tion in services, 2 ) personalized custom er service,

3 ) w ide selection of co nsultants, 4 ) facilitation and negotiation of contracts, 5 ) profiles of

qua lified consultants, 6 ) a non-biased representation of the consultant, and 7 ) no direct fee

accrued from using this selection p rocess.

The business receives the benefits of tim e-savings, convenience, security in know ing the

consultant is w ell-qua lified and insured, and a fair and reasona ble fee defined w hen hiring the

consultant.

Life C ycles/ Seasonality

The netw orking service and the professiona l service are in the m ature stage of the services life

cycle. H ow ever, there is no ind ica tion tha t these services, regardless of w ho perform s them ,

w ill ever be unessential in the business clim ate.

H ow ever, as w ith m ost businesses, C O N SU LTA N T H Q w ill experience the effects ofseasonality. The m onths of N ovem ber, D ecem ber, and January m ay be slow due to the holidays

and the realiza tions tha t accom pany the exit of a year and the entrance of a new year. Retail

businesses are o ften busy during these m onths w ith custom ers, end of year inventory, and

review ing financial situa tions. N on-retail businesses have slow periods during this tim e, also,

due to sim ilar reasons. C onsultants of any kind are generally no t hired as m uch during this tim e,

so C O N SU LTA N T H Q w ill need to adjust its prom otional tactics and budget to address this

slow period. Perhaps, C O N SU LTA N T H Q could use this tim e to do it annual budget, review its

business plan, and plan for the upcom ing year. It could offer sm aller services to its consultants

like w orkshops, resum e services, or file up dating ; it m ight offer sm all businesses services such

as resea rch, m arket analysis, custom er and co m petitor profiles, industry trends, and on

prem iseprofessiona l consulting for no m inal fees.

D uring other tim e periods of the year, businesses m ay need specific skills w hich w ill result in an

em phasis on certain areas of expertise and types of consulting . C O N SU LTA N T H Q w ill need to


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be prepared for these instances and ha ve a num ber of consultants available to fill the businesses

need s. For exa m ple, during the m onths of Feb ruary through A pril, businesses m ay need advice

reg arding taxes or accounting and bookkeeping m ethods, and consultants w ith expertise in

accounting w ill be in dem and. C O N SU LTA N T H Q w ill need to heavily recruit accountants

during the m onths of D ecem ber and January to have consultants on file w hen custom ers com ecalling.

Product/ Services G row th D escription

Several services w ere m entioned above as potentially new services to be added in addressing

the sea sonality of professiona l services. A ll new services fitthe m ission of C O N SU LTA N T

H Q in tha t they add to benefits received by its tw o custom er groups and further each groups

general w elfare. A s C O N SU LTA N T H Q standardizes the p rim ary services, other services m ay

be offered as they are identified. W hen the business consulting services such as accounting ,

m arketing, financial, and m anagem ent are p rofitable for both C O N SU LTAN T H Q and itsco nsultants, other co nsulting services such as law (contract, em ployee relationships, etc),

architectural, or m anufacturing consulting services m ay be recruited depending on each services

dem and. Perhaps, if profits are stable, C O N SU LTA N T H Q could o ffer businesses a free one-

hour consultation b y consultants at the expense of C O N SU LTA N T H Q to help further the

consultant/ client relationship.


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The M arket A na lysis

C ustom er A na lysis

C O N SU LTA N T H Q has tw o custom er groups: the consultants and those businesses seeking

professiona l services. W hile it is difficult to define the dem ographics, psychographics, andlifestyle descriptions of ea ch g roup, C O N SU LTA N T H Q has determ ined a few generalities of

both g roups. A s C O N SU LTA N T H Q recruits consultants and advertises to businesses, it w ill

survey and question every potential custom er (consultants and clients) to better define those

dem ographics, psychographics, lifestyle patterns, and areas of service needing im provem ent.

First, C O N SU LTA N T H Q is targeting all Kansas consultants w ith educa tion or exp erience

equivalent to a co llege degree p lus one year of experience consulting . M ost likely, those

consultants w ho becom e m em bers of the C O N SU LTAN T H Q N etw ork w ill be:

relatively young, having a sm all clientele, or being a start-up s business possibly part-tim e consultants w ith full-tim e co rporate or otherw ise em ployed positions non-aggressive and / or shy ind ividuals heavily involved in o ther organiza tions and / or fam ily

C O N SU LTA N T H Q w ill be able to attract those established, rep utable consultants once it has

proven its w orthiness and com m itm ent to qua lity and its custom ers.

Second, C O N SU LTAN T H Q w ill prom ote to K ansas businesses. A gain, dem og rap hics,

psychographics, and lifestyle d escriptors are d ifficult to define; how ever, those businesses usingC O N SU LTAN T H Q s services m ight be described a s:

sm all to m ed ium sized efficiently operated (control costs) recently dow nsized loca l m om and pop businesses established businesses (in b usiness m ore tha n 1 year) values convenience and building relationships w ith its suppliers

Businesses seeking professional services m ay use C O N SU LTA N T H Q that lie outside these

descriptors, as w ell; in sum m ary, C O N SU LTA N T H Q w ill attract any business need ing

consulting services if C O N SU LTA N T H Q s m arketing plan is effective in reaching the business

m arket. O nce these businesses contact C O N SU LTA N T H Q , this custom er groups profile w ill be

better defined, and it advertising venues w ill be na rrow ed even m ore to attract those business

typ es.


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C om petitive A na lysis

C O N SU LTA N T H Q has identified tw o direct com petitors and tw o indirect com petitors. Each

com petitor is profiled below .

C onsultants

U nfortuna tely, C O N SU LTA N T H Q faces com petition from its target custom er group: consultants.

C onsultants have the option to forego the services offered by C O N SU LTA N T H Q and m arket

them selves to p otential clients. C onsultants are loca ted across Kansas, and beca use of this,

they often a re lim ited to serving those b usinesses in their surrounding area or otherw ise incur the

exp ense o f traveling to the client for the initial visit. Independent consultants offer personalized

service and begin building a relationship from the first phone call. They have the option of setting

their fees according to the p roject and their desired com pensation, and they have the expertise in

the area either the client identified or the consultant proposed. In com parison to C O N SU LTA N T

H Q , consultants offer the sam e basic service to businesses: professional consulting services.H ow ever, C O N SU LTIN G H Q offers the businesses a selection o f consultants in w hich to choose

and the personalized service of facilitating and negotiating a contract w ith the consultant that

w ill be fair to both parties.

C O N SU LTA N T H Q also advertises its services and its consultants (w hich decrea ses the

expense to both the independent consultant and client), gua rantees qua lity, sup erior consulting

services to its businesses, and provides a central source for businesses to contact seeking

professional services.

Sm all Business D evelopm ent C enters

Sm all Business D evelopm ent C enters (SBD C s) are located across the state of Kansas and offer

free advice/ consulting services to start-up businesses. C learly, the SBD C has a com petitive

advantage in the area of price because the service is free of cha rge, and the SBD C m ay refer a

selection of co nsultants to b usinesses seeking additional co nsulting services. H ow ever,

C O N SU LTA N T H Q offers a selection of consultants, on-going , personalized custom er service,

and specializa tion of consulting services.

Internet Indirectly, the Internet is considered to be a com petitor. C onsultants m ight ha ve their ow n w eb

page and an a ssociation called C onsultants N etw orkm aintains a w eb site listing services and

consultants across the country. Because of the im m ense inform ation tha t can be obtained on the

Internet and its grow ing popularity, businesses m ay use this m etho d to find a consultant.

H ow ever, if the key w ords are no t entered, the business m ight m iss the rightconsultant or the


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1 6

consultants that appear m ay be located 2 0 0 0 m iles aw ay from Kansas! O nce again,

C O N SU LTA N T H Q offers the personalized service and selection o f consultants in the

surrounding a rea. A lso, C O N SU LTAN T H Q could ea sily design a w eb p age of its ow n

advertising its services to those b usinesses w ho often use the Internet to locate consultants.

Tem p/ Personnel A gencies

A lthough, the threa t of tem p agencies directly com peting w ith C O N SU LTA N T H Q is m inim al at

present, the com petition could heat up if the a gencies w ere to add a consulting service to their

list of other services. In adding a consulting service, these agencies w ould be a ble to provide

the central source of inform ation, a great selection of consultants, and personalized service.

C O N SU LTA N T H Q offers the specialization in its ow n services through its em phasis on only

recruiting consultantsnot secretaries, m anual laborers, or other professions. C O N SU LTA N T

H Q w ill m onitor the progress and changes m ade in tem p/ personnel agencies so that it can

streng then its com petitive advantage and discourage those com petitors from entering theconsulting industry.

M arket Po tential

C urrent Trade A rea

C O N SU LTA N T H Q operates in Tekkton, Kansas and recruits consultants and services

businesses w ithin the state of Kansas and, eventua lly, the surrounding region. Serving as a

consultant headquarters,C O N SU LTA N T H Q m ust be centrally loca ted to its custom ers.

Kansas is not overly populated, no r is it too large to travel in one to tw o days. The surrounding

region is also w ithin a days travel and w ith the extrem e boost in the Rocky M ountain regionseconom y, it poses the opportunity for C O N SU LTAN T H Q to serve a grow ing m arket and expa nd

its services into C olorado.

M arket Size and Trend s

A ccording to the 1 9 9 8 Kansas Business D irectory 2, Kansas has a total of 2 8 ,0 0 0 businesses.

O f these businesses, 6 2 .9 % have 1-4 em ployees and 1 8 % have 5-9 em ployees. In sum ,

Kansas has 2 2 ,6 5 2 businesses tha t fit the sm all to m ed ium target for C O N SU LTA N T H Q s

services. Beca use of Kansass entrepreneurial spirit and reputation for encouraging sm aller

businesses, sm aller businesses w ill increase to the point w here the m arket ca n support it.

In the categories of pub lic relations counselors, tax co nsultants, financing consultants, business

m ana gem ent consultants, m arketing consultants, m arketing research and ana lysis, advertising

agencies and counselors, and accounting and bookkeeping general services,a total of 2 00


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1 7

co nsultants w ere registered w ith the Kansas B usiness D irectory w ho fit the profile of ha ving 1 -4

em ployees. Based on the assum ption that C O N SU LTAN T H Q w ould generate tw enty five

consultant leads from the Kansas Sm all Business D evelopm ent C enter directors and staff, tw enty

business gradua tes from the U niversity of Kansas per year, and forty leads from sim ply

netw orking and attending professional organizations m eeting, C O N SU LTA N T H Q has a potentialconsultant m arket of 2 8 5 Kansas consultants.

A s C O N SU LTA N T H Q establishes its rep utation a nd recruits consultants tha t have been

identified, then, possibly it ca n generate leads to other consultants and start its ow n directory.

C onsulting professionals w ill continue to increase due the industry trends discussed earlier.

C onsulting is relatively easy to enter and m ore and m ore people are leaving the corporate setting

to set up their ow n co nsulting business.

M arket Potential

A s stated previously, it is C O N SU LTA N T H Q s objective to recruit seventy five consultants in

the first year. By m ultiplying this num ber by $ 2 4 0 / consultant, the annua l sales volum e is

$1 8 ,00 0 .

There are 2 2 ,6 5 2 businesses registered in the Kansas Business D irectory tha t em ploy less tha n

nine em ployees in the State of Kansas. In estim ating that C O N SU LTA N T H Q can contact and

service .0 5 % of these businesses in Year 1 , the total num ber of serviced equals 11 0

businesses. Based on the follow ing assum ptions, C O N SU LTA N T H Q has the potential to earn

approxim ately $ 2 3 5 0 in servicing projects betw een the consultant and the business.

6 0 % of all projects w ill be betw een $ 2 5 0 --$ 4 9 9 and ea ch project of this am ount w illnet a 5 % com m ission (on averag e, $ 3 7 5 (.0 5 ) = 1 8 .7 5 ; 1 8 .7 5 (6 6 ) = $ 1 2 3 7 .5 0 )

2 0 % of all projects w ill be over $ 5 0 0 and ea ch project of this am ount w ill yield a 1 0 %com m ission ($ 5 0 0 (.1 0 ) = $ 5 0 ; 5 0 (2 2 ) = 1 1 0 0 )

2 0 % of all projects w ill be less than $ 2 4 9 , thus, no com m ission w ill be m ade onprojects of this am ount

In sum , C O N SU LTAN T H Q has the po tential to gross $ 2 0 ,5 0 0 in its first year 3. This estim ate

is extrem ely conservative for Year 1 . In each consecutive year, this num ber is expected to

increase due to an increased num ber of consultants joining C O N SU LTA N T H Q , added consultingservices, and targeting a greater custom er base of both new and existing business clients.

2 Inform ation in the Kansas Business Directory b ased on Yellow Pages listing s. 3 Please see Sa les Forecast 19 9 9 in A pp endix


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1 8

M arketing Strategies

Location/ D istribution

Initially, C O N SU LTA N T H Q w ill be operated out of the ow ners hom e in N orth Tekkton. The

services offered by C O N SU LTA N T H Q do not require a separate building and a sm all office inthe hom e designated for C O N SU LTAN T H Q services only w ill be adequate for the initial start-

up. A s C O N SU LTA N T H Q recruits a num ber of consultants and attracts businesses to use its

consulting businesses (scheduled for the first six m onths of operation), it w ill m ove out of its

hom e office and into a D ow ntow n Tekkton office. D ow ntow n is an excellent location for

C O N SU LTA N T H Q due to the high business concentration a nd sm all business setting.

A dditionally, C O N SU LTAN T H Q should be able to rent an office of 3 0 0 to 5 0 0 square feet at a

rea sonable rate, thus keeping exp enses low .

Price/ Q ua lity Relationship C O N SU LTA N T H Q m ight encounter inconsistencies w ith the desired price/ quality relationship in

loca ting its initial stages of developm ent in the ow ners hom e and in recruiting young or un-

established consultants into the netw ork. C O N SU LTA N T H Q prom otes an im age that portrays a

low price, high qua lity service. W hile this is the m ost desired price/ qua lity relationship for

consum ers, it is difficult for a business to develop because high q ua lity is often a ssociated w ith

a higher price.

By recruiting educated and/ or experienced consultants, C O N SU LTA N T H Q w ill prove its

quality. It w ill deliver a low er consulting fee because consultants w ill not need to figure theexpenses of tim e spent, netw orking , or advertising into the project agreem ent. These qua lities

enable C O N SU LTA N T H Q to obtain its desired im age of being the central source that helps

businesses grow and succeed.

Prom otional Strategies

Packaging

Because C O N SU LTA N T H Q is attem pting to project an im age of high quality w ithout the

accom panim ent of a high price, C O N SU LTAN T H Q s packaging w ill be sim ple and

straightforw ard w ith a disting uishing logo that em pha sizes the value of qua lity. (See A ppendix)

This packa ging w ill be consistent throug hout all m arketing m aterials, includ ing business ca rds

and stationary. The ow ner/ m anager w ill act, spea k, and dress in a professiona l m anner, and

any em ployees hired in the future w ill be exp ected to do the sam e.


19/39


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2 0

Enter a booth in the Sm all Business Show case Purchase a n ad in the D D A new sletter A dvertise services in front range publications like the Business Reportand Todays

Business Yellow Pa ges listing

Brochures D istribute brochures at N xLeveL C lass, Sm all Business Developm ent C enters, andBusiness A ssistance C enters

D istribute brochures at U W s C ollege of Business Internet hom e page

Please see a detailed advertising budget incorporating these item s in the A ppend ix.


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2 1

TH E FIN A N C IA L PLA N

Record Keeping Functions

Because C O N SU LTAN T H Q is a business solely ow ned and operated by m yself, the recordkeeping functions are entirely m y responsibility. I w ill keep records of acco unts receivable, cash

receipts, payroll expenses, and other operationa l expenses. C ash receipts w ill be deposited

w eekly, and accounts receivable w ill be recorded and m aintained m onthly. Payroll taxes w ill be

paid quarterly. Expenses incurred on a daily basis w ill be paid prom ptly w ith an em phasis on

paying ea ch account fully by the end of the m onth.

O ther O perations C ontrols

Excellent organization and record keeping is crucial to the every day operation of C O N SU LTA N TH Q . The office w ill be kept clean and files w ill be m aintained on a bi-w eekly basis. A lthough

C O N SU LTAN T H Q is a business staffed by one person, operational and recording keeping

controls w ill be existent. O utside service professiona ls such as an accountant and a co llection

agency w ill keep copies of m y records and clients; therefore, C O N SU LTA N T H Q w ill have a

checks and balancesin p lace to som e d eg ree.

Financial W orksheets and Statem ents

Brea k Even A na lysis

The Break Even A nalysis is based on a services pricingw orksheet. C O N SU LTAN T H Q has

tw o revenue g enerating sources: m em berships and com m ission-based projects. The brea k-even

analysis show s how the m em bership fee w as developed . To account for project costs

associated w ith the tim e spent w ith each consultant and business, 2 0 % of the total costs w ere

subtracted . The final result w as $ 1 9 .7 8 per m onth for each m em ber. C O N SU LTAN T H Q

charges $ 2 4 0 per year for each m em bership. M em berships are $2 0 per m onth.


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2 2

Break-Even A nalysis

Billable H ours TotalAnnualH ours

Potential H ours A vailable 1 04 0Less H olidays 1 6Less Vacation 1 2Less Sick-Tim e 1 2Less N on-billable H ours 4 0

Total B illable H ours 9 6 0O perating C osts A nnual ($ )Labor C ostsO w ner's Salary 6 0 0 0O ther H ired Labor 3 6 0 0Payroll-related taxes 3 0 0Fringe Benefits 1 2 0 0

Total A nnual Labor C osts 1 1 1 0 0

N on-Labor O perating C ostsO utside Services 1 0 0 0Insurance 2 5 0A dvertising/ Prom otion 3 5 0 0O ccupancy Expenses 6 0 0 0M iscellaneousO ffice Supplies 1 5 0M em berships 5 0 0Travel 1 0 0O ther 0Interest Expense 0Principal Paym ents 0Total A nnual N on-Labor C osts 11 5 0 0

D eterm ine H ourly Rate:Total C osts * 1 8 0 8 0Total Billable H ours 9 6 0D esired Profit 1 .0 5Rate Per M em bership (A / B)* C 19 .77 5

* N ote: 2 0 % of Total C osts w ere attributedto hand ling com m ission-based consultantprojects.


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2 3

C A SH FLO W A SSU M PTIO N S

1 . Beginning cash balance taken from Start-U p Expenses W orksheet. (See A ppendix)

2 . C ash receipts and accounts receivab le b ased on the a ssum ption that 2 5 % of allconsultants w ould pay the m em bership dues that sam e m onth, w hile the other 7 5 %w ould pay in 30 days. (Term s - net 3 0 -days)

3 . C om m ission-based incom e4 ba sed on the assum ption that projects w ould take, onaverage, tw o m onths to com plete w ith paym ent being at com pletion

4 . Bad D ebts based on the a ssum ption that 3 % of all consultants w ould not pay theirm em bership dues. M oney held in a reserve account.

5 . O w ners salary $ 5 0 0 p er m onth. In m onth 6, adm inistrative assistant is hired . Term s ofpart-tim e em ploym ent are 1 0 hours per w eek at $ 7 / hour. Federal taxes $ 2 5 / m onth.

6 . A ccountant hired to consult, answ er any questions, and m aintain a nd/ or correct boo ksevery six m onths at the rate of $ 1 5 0 / hour.

7 . Lega l advice budgeted for one hour per year at $1 0 0 / hour.

8 . C ollection agency hired every six m onths to collect bad debts.

9 . Business insurance is $ 2 5 0 in m onth 1 2 and ow ners health insurance is $ 1 0 0 / m onth.Business insurance policy covers replacem ent cost of fixed assets, m oney and securitieson the prem ises, loss of business incom e, and business liability (includ ing m edica l,personal and advertising injury, fire, lightning, or explosion).

1 0 . See A dvertising Budg et (See A ppendix)

1 1 . O ccupa ncy expenses based on the follow ing assum ptions:

(a) First six m onths - H om e-based Business. office - 3 0 square feet in 3 0 0 square foot apartm ent. Rent is $ 2 7 5 . 1 0 % ofrent is $ 2 7 .5 0 / m onth. 2 5 % of all utilities and 5 % of m aintenance and repair

w ill be charged to business. (b) Starting June 1 st - Business m oves to D ow ntow n o ffice

office - 3 0 0 squa re foot office, utilities includ ed; Rent is $3 5 0 per m onth w ith adeposit on first and last m onths rent in m onth 6 .

1 2 . D ebt term s are a s follow s: Borrow $ 2 0 0 0 at a 1 5 % interest rate and p ay off in tenm onths.

1 3 . Interest paym ents are $ 3 0 / m onth.

1 4 . Principal paym ents are $2 0 0 / m onth.

1 5 . Beginning cash ba lance from end o f year 1 9 9 9 (C ash Flow Projections - 1 9 9 9 )

1 6 . O w ners salary increases to $ 1 0 0 0 / m onth

4 C om m ission-based incom e taken from sales forecast.


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2 4

Cash Flow Projection 1999M onths 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2

(A ) Beginning C ash Balance 1 15 0 1 70 5 1 46 5 1 12 0 1 56 0 2 56 0 3 10 5 3 03 5 2 84 0 2 03 5 1 97 5 1 88 0 C ash Receipts

M em berships 240 360 360 480 600 480 360 240 480 360 360 240C om m ission-based incom e 0 0 0 90 220 290 320 255 190 130 255 190 C ollect A ccounts Receivable 0 720 1080 1080 1440 1800 1440 1080 720 1440 1080 1080 M iscellaneous Incom e 0 0 0 0 0 0 0 0 0 0 0 0

(B ) Tota l C a sh Receip ts 2 40 1 08 0 1 44 0 1 65 0 2 26 0 2 57 0 2 12 0 1 57 5 1 39 0 1 93 0 1 69 5 1 51 0 C ash D isbursem ents

Bad D ebts 240 0 0 0 0 240 0 0 0 0 0 Pay A ccounts Payable 0 0 0 0 0 0 0 0 0 0 0 0Salaries/ W ages & Benefits 500 500 500 500 500 500 825 825 825 825 825 825 O w ner W ithdraw als 0 0 0 0 0 0 0 0 0 0 0 0

N on-Labor ExpensesO utside S ervices: A ccounting 0 0 150 0 0 0 0 0 1 50 0 0

Legal 0 0 0 0 0 100 0 0 0 0 0 C ollection A gency 0 0 0 0 0 150 0 0 0 0 0

Insurance 100 100 100 100 100 100 100 100 100 100 100 350A dvertising 600 245 560 135 185 410 135 65 290 285 85 135O ccup ancy Expenses: Rent 30 30 30 30 30 30 700 350 350 350 350 3

Phone/ Fax 150 150 150 150 150 150 150 150 150 150 150 1U tilities 15 15 15 15 15 15 0 0 0 0 0

M iscellaneous Expenses 50 50 50 50 50 50 50 50 50 50 50 50

O ffice Supplies 0 0 0 0 0 50 0 0 50 0 0 50Purchase of Fixed A ssets 0 0 0 0 0 0 0 0 0 0 0 0 D ebt Paym ent - O ld

(C ) To ta l C a sh D isb ursem ents 1 68 5 1 09 0 1 55 5 9 8 0 1 03 0 1 79 5 1 96 0 1 54 0 1 96 5 1 76 0 1 56 0 2 06 0 1

N et C ash Flow (B - C ) -144 5 -10 -115 670 1230 775 160 35 -575 170 135 -550 A djustm ents to N et C ash Flow

(+ ) N ew D ebt 2000 (+ ) N ew O w ner Investm ent (-) N ew D ebt - Interest Paym ents -30 -30 -30 -30 -30 -30 -30 -30 -30 -30 -30(-) N ew D eb t - Princip al Pa ym ents -2 00 -2 00 -2 00 -2 00 -2 00 -2 00 -2 00 -2 00 -2 00 -2 00 -2 00(-) N ew O w ner W ithdraw als

(D ) A djusted N et C ash Flow 5 55 -24 0 -34 5 4 40 1 00 0 5 45 -7 0 -19 5 -8 05 -60 -9 5 -5 50

Ending C ash Balance (A + D ) 1 70 5 14 65 1 12 0 1 56 0 2 56 0 3 10 5 3 03 5 2 84 0 2 03 5 1 97 5 1 88 0 1 33 0


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2 5

C ash Flow Projection - 2 0 0 0

M onths 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2(A ) Beg inning C ash B alance 13 30 4 0 3 0 -2 40 -4 00 9 35 2 09 0 1 99 5 1 86 5 1 47 0 1 32 5 2 06 0

C ash ReceiptsM em berships 540 660 660 780 900 600 480 360 780 660 660 360 C om m ission-based incom e 190 130 200 255 255 290 300 210 160 130 255 225 C o llect A cco unts Receiva ble 7 2 0 1 6 20 1 9 80 1 9 80 2 3 40 2 7 00 1 8 00 1 4 40 1 0 80 2 3 40 1 9 80 1 9 80 M iscellaneous Incom e 0 0 0 0 0 0 0 0 0 0 0 0

(B) To ta l C a sh Receip ts 1450 2410 2840 3015 3495 3590 2580 2010 2020 3130 2895 2565 C ash D isbursem ents

Bad D ebts 240 0 0 240 0 0 240 0 0 240 0 Pay A ccounts Payable 0 0 0 0 0 0 0 0 0 0 0 0Sa la ries/ W a ges & B enefits 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 1 3 25 O w ner W ithdraw als 0 0 0 0 0 0 0 0 0 0 0 0

N on-Labor ExpensesO utside Services: A cco unting 0 0 150 0 0 0 0 0 0 0 0

Legal 0 0 0 0 0 100 0 0 0 0 0 C ollection A gency 0 0 150 0 0 150 0 0 150 0 0

Insurance 100 100 100 100 100 100 100 100 100 100 100 350A dvertising 525 445 835 960 1 85 160 460 1 65 240 1060 185 185

O ccupa ncy Expenses: Rent 350 350 350 350 350 350 350 350 350 350 350 35Phone/Fax 150 150 150 150 150 150 150 150 150 150 150 15U tilities 0 0 0 0 0 0 0 0 0 0 0

M iscellaneous Expenses 50 50 50 50 50 50 50 50 50 50 50 50 O ffice Supplies 0 0 0 0 0 50 0 0 50 0 0 50Purchase of Fixed A ssets 0 0 0 0 0 0 0 0 0 0 0 0 D ebt Paym ent - O ld

(C ) Tota l C ash Disbursem ents 2740 2420 3110 3175 2160 2435 2675 2140 2415 3275 2160 2760 3

N et C a sh Flow (B - C ) -1290 -10 -270 -160 1335 1155 -95 -130 -395 -145 735 -195 A djustm ents to N et C ash Flow(+ ) N ew D ebt (+ ) N ew O w ner Investm ent

(-) N ew D ebt - InterestPa ym ents(-) N ew D ebt - PrincipalPa ym ents(-) N ew O w ner W ithdraw als

(D) Ad justed N et C a sh Flow -1290 -10 -270 -160 1335 1155 -95 -130 -395 -145 735 -195

Ending C ash Balance (A + D ) 4 0 30 -2 40 -4 00 9 35 2 09 0 1 99 5 1 86 5 1 47 0 1 32 5 2 06 0 1 86 5


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2 6

Projected Incom e Statem ent for 1 9 9 9

M onths 1 2 3 4 5 6 7 8 9 10 1Sales - M em berships 240 1080 1440 1560 2040 2280 1800 1320 1200 1800 1440 C o m m ission-basedIncom e

0 0 0 90 220 290 320 255 190 130

C O G S 0 0 0 0 0 0 0 0 0 0 G ross M argi 240 1080 1440 1650 2260 2570 2120 1575 1390 1930 1695

O perating ExpensesSalaries/W ages &Benefits

500 500 500 500 500 500 825 825 825 825

N on-Labor ExpensesO utside Services 0 0 150 0 0 250 0 0 150 0 Insurance 100 100 100 100 100 100 100 100 100 100 A dvertising 600 245 560 135 185 410 135 65 290 285

O ccupancy Expenses 195 195 195 195 195 195 850 500 500 500 M iscellaneous Expenses 50 50 50 50 50 100 50 50 100 50 D epreciation 88 88 88 88 88 88 88 88 88 88 8Interest - O ld D ebt 0 0 0 0 0 0 0 0 0 0 0Interest - N ew D ebt 0 30 30 30 30 30 30 30 30 30 30Total O peratingExpenses

1533 1208 1673 1098 1148 1673 2078 1658 2083 1878 16

N et O perating Profi -1293 -128 -233 552 1112 897 42 -83 -693 52 17 6O ther G a ins/ Losses

N et Profit or LosBefore Inco m e Taxe

-1293 -128 -233 552 1 112 897 42 -83 -693 52

O w ner W ithdraw als 0 0 0 0 0 0 0 0 0 0 0


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2 7

Projected Incom e Statem ent for 2 0 0 0

M onths 1 2 3 4 5 6 7 8 9 10 1Sales - M em berships 1260 2280 2640 2760 3240 3300 2280 1800 1860 3000 2640 C o m m ission-basedIncom e

190 130 200 255 255 290 300 210 160 130

C O G S 0 0 0 0 0 0 0 0 0 0 G ross M argi 1450 2410 2840 3015 3495 3590 2580 2010 2020 3130 2895

O perating ExpensesSalaries/W ages &Benefits

1325 1325 1325 1325 1325 1325 1325 1325 1325 1325 13

N on-Labor Expenses O utside Services 0 0 300 0 0 250 0 0 150 0 Insurance 100 100 100 100 100 100 100 100 100 100

A dvertising 525 445 835 960 185 160 460 165 240 1060 O ccupancy Expenses 500 500 500 500 500 500 500 500 500 500 M iscellaneous Expenses 50 50 50 50 50 100 50 50 100 50 D epreciation 71 71 71 71 71 71 71 71 71 71 7Interest - O ld D ebt 0 0 0 0 0 0 0 0 0 0 0Interest - N ew D ebt 0 0 0 0 0 0 0 0 0 0 0Total O peratingExpenses

2571 2491 3181 3006 2231 2506 2506 2211 2486 3106 22

N et O perating Profi -1121 -81 -341 9 1264 1084 74 -201 -466 24 664 2O ther G a ins/ Losses

N et Profit or LosBefore Inco m e Taxe

-1121 -81 -341 9 1 264 1 084 74 -201 -466 24 6

O w ner W ithdraw als 0 0 0 0 0 0 0 0 0 0 0


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2 8

Balance Sheet

Prepared as of: January 1 , 1999 Prepared as of: January 1 , 2000 Prepared as of: January 1 , 200 1A S SETS A SS ETS A S SETSC urrent A ssets C urrent A ssets C urrent A ssetsC ash 1150 C ash 1330 C ash A ccounts Receivable 0 A ccounts Receivable 0 A ccounts Receivable Invento ry 0 Invento ry 0 Invento ry O ther C urrent A ssets 0 O ther C urrent A ssets 0 O ther C urrent A ssets * A llow ance for Bad D ebts 0 A llow ance for Bad D ebts 480 A llow ance for Bad D ebts

To ta l C urrent A ssets 115 0 To ta l C urrent A ssets 1 81 0 To ta l C urrent AFixed A ssets Fixed A ssets Fixed A ssetsLand 0 Land 0 Land Build ings (less accum . depr.) 0 Build ings (less accum . depr.) 0 Build ings (less accum . depr.) Equipm ent (less accum . depr.) 0 Equipm ent (less accum . depr.) 0 Equipm ent (less accum . depr.) * * O ther fixed assets (lessaccum . dep r.)

3200 O ther fixed assets (less accum .depr.)

2144 O ther fixed adepr.)

Total A ssets 4350 Tota l A ssets 3954 LIA BILITIEIS LIA BILITIES LIA BILITIESC urrent Liabilities C urrent Liabilities C urrent LiabilitiesA ccounts Payable 0 A ccounts Payable 0 A ccounts Payable O ther C urrent Liab ilities 0 O ther C urrent Liab ilities 0 O ther C urrent Liabilities To ta l C urrent Lia bilities 0 To ta l C urrent Lia bilities 0 To ta l C urrent Lia bilities Long -term Lia bilities Long -term Liab ilities Long-term LiabilitiesD ebt 0 D ebt 0 D ebt O ther Long-term Liabilities 0 O ther Long-term Liabilities 0 O ther Long-term Liabilities

Total Long-term Liabilities 0 Total Long-term Liabilities 0 Total Long-term Liabilities Total Liabilities 0 Total Liabilities 0 Total Liabilities

O W N ER'S EQ U ITY 4350 O W N ER'S EQ U ITY 3954 O W N ER'S EQ U


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2 9

Statem ent of O w ner's Eq uity Statem ent of O w ner's Eq uity Statem ent of O w ner's Eq uity

at 1 / 1 / 1 9 9 9 at 1 / 1 / 2 0 0 0 at 1 / 1 / 2

Beginning capita l of ow ner 4350 Beginning capita l of ow ner 4350 Beginning capita l of ow ner N ew investm ent by ow ner 0 N ew investm ent by ow ner 0 N ew investm ent by ow ner N et incom e of business 0 N et incom e of business -3 96 N et incom e of business W ithdraw als of ow ner 0 W ithdraw als of ow ner 0 W ithdraw als of ow ner Ending capital of ow ner 4 35 0 Ending capital of ow ner 3 95 4 Ending capital of ow ner


30/39


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3 1

A PPEN D IX A- O w ners Resum e

N ot included in this plan copy due to proprietary nature of m aterials.

A PPEN D IX B- M arketing M aterials


A PPEN D IX C - M em bership A greem ent Form



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3 2

A PPEN D IX D- Sales Foreca sts

Sales Forecast A ssum ptions

1 . M em berships are based on targeted recruitm ent and sea sona lity. The m onths of January, July,A ugust, and D ecem ber show lesser m em berships due to the assum ption that during these

m onths, consultants are less likely to enroll in the consultant netw ork. January is the firstm onth of operation; Decem ber is holiday season; July and A ugust are the last m onths ofsum m er, and vacations, events, etc. are scheduled . Throughout the yea r, new m em bershipsper m onth are relatively conservative w ith a yearly total of 7 6 (objective for year 1 ).

2 . M em bership fees are $ 2 0 / m onth--$ 2 4 0 / year. See Break-Even A nalysis.

3 . To obtain figures for accounting projects, the num ber of m em berships (per m onth) w asm ultiplied by 2 5 % and that num ber (1 .2 5 ) w as m ultiplied by 2 5 % in the m onths of January,February, M arch, and A pril due to the assum ption tha t this taxperiod w ould be the besttim e for accounting consultants. Project figures for the rem aining m onths of the year w erebased on the assum ption tha t 1 5 % of all projects w ould be accounting-based .

4 . M arketing project figures w ere estim ated to be 2 5 % of all projects throughout the year.

5 . Finance project figures w ere estim ated to be 1 5 % of all projects throughout the year.

6 . O ther project (i.e. business plan w riting , graphic design assistance, etc.) figures w ere basedon a 1 0 % m ultiplier January through A pril and a 2 0 % m ultiplier M ay through D ecem ber.

7 . Project com m issions based on the follow ing assum ptions:

a.) 1 0 % com m ission on projects over $ 5 0 0 . Projects over $ 5 0 0 w ere estim ated to be2 0% of all projects. Therefore, the figure w as based on num ber of units m ultiplied by.2 0 m ultiplied by $ 5 0 . ((# of units* .2 0 )* $ 5 0 )

b.) 5 % com m ission on projects rang ing from $ 2 5 0 -$ 4 9 9 . A verag e project $ 3 7 5 .Projects of this am ount w ere estim ated to be 6 0 % of all projects. Therefore, thefigure w as based on the follow ing form ula: ((# of projects*.6 0 )* $ 3 7 5 )

c.) N o com m ission on projects under $ 2 5 0 . Projects under $ 2 5 0 w ere estim ated to be2 0 % of all projects.

1 . Increase in m em berships based on the loss of 1 5 % of 1 9 9 9 consultants. (O n average, oneconsultant is lost per m onth. Then, a stea dy gain of six m em berships per m onth w ere addedw ith the excep tion that a conservative increa se of tw o m em berships w ere a dded to them onths of June, July, A ugust, and D ecem ber.

N ote: M onthly m em berships w ere m ultiplied b y 25 % based o n the estim ate that C O N SU LTAN TH Q w ould crea te m ore than one project per consultant.

A 2 5 % cushion w as allow ed in figuring projects tha t w ere either 1 ) unsuccessful, 2 ) incom plete,or 3 ) com pleted outside the term s of C O N SU LTAN T H Q


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3 3

Sales Forecast - Year1 9 9 9

M onths 1 2 3 4 5 6 7 8 9 10 M em bershipsU nits Sold 4 6 6 8 10 8 6 4 8 6

Price per U nit 240 240 240 240 240 240 240 240 240 240 24Total M em bership Sales 960 1440 1440 1920 2400 1920 1440 960 1920 1440 1440

A cco untingU nits Sold 0 3 3 4 3 2 2 1 2 2 Projects: O ver $5 00 0.00 1.50 1.50 2.00 0.60 0.48 0.36 0.24 0.48 0.36 0.36 Betw een $2 50 - $49 9 0.00 0.90 0.90 1.20 1.80 1.44 1.08 0.72 1.44 1.08 1.08 U nder $2 49 0.00 0.60 0.60 0.80 0.60 0.48 0.36 0.24 0.48 0.36 0.36

Total C om m ission-based sales (Accting) 0.00 91.88 91.88 122.50 63.75 51.00 38.25 25.50 51.00 38.25 38.25 25.50

M arketingU nits Sold 0 0 3 4 5 4 3 2 4 3 Projects: O ver $5 00 0.00 0.00 0.60 0.80 1.00 0.80 0.60 0.40 0.80 0.60 0.60 Betw een $2 50 - $49 9 0.00 0.00 1.80 2.40 3.00 2.40 1.80 1.20 2.40 1.80 1.80 U nder $2 49 0.00 0.00 0.60 0.80 1.00 0.80 0.60 0.40 0.80 0.60 0.60

Total C om m ission-based Sales (M kting) 0 .00 0.00 63.75 85.00 106.25 85.00 63.75 42.50 85.00 63.75 63.75 42.50

FinanceU nits Sold 0 0 2 2 3 2 2 1 2 2 Projects: O ver $5 00 0.00 0.00 0.36 0.48 0.60 0.48 0.36 0.24 0.48 0.36 0.36 Betw een $2 50 - $49 9 0.00 0.00 1.08 1.44 1.80 1.44 1.08 0.72 1.44 1.08 1.08 U nder $2 49 0.00 0.00 0.36 0.48 0.60 0.48 0.36 0.24 0.48 0.36 0.36

Total C om m ission-based Sales (Finance) 0 .00 0.00 38.25 51.00 63.75 51.00 38.25 25.50 51.00 38.25 38.25 25.50

O therU nits Sold 0 0 1 2 4 3 2 2 3 2 Projects: O ver $5 00 0.00 0.00 0.24 0.32 0.80 0.64 0.48 0.32 0.64 0.48 0.48 Betw een $2 50 - $49 9 0.00 0.00 0.72 0.96 2.40 1.92 1.44 0.96 1.92 1.44 1.44 U nder $2 49 0.00 0.00 0.24 0.32 0.80 0.64 0.48 0.32 0.64 0.48 0.48

Total C om m ission-based Sales (O ther) 0 .00 0.00 25.50 34.00 85.00 68.00 51.00 34.00 68.00 51.00 51.00 34.00

Total M em bership Sales 960 1440 1440 1920 2400 1920 1440 960 1920 1440 1440 Total C om m ission-based Sales 0 .00 91.88 219.38 292.50 318.75 255.00 191.25 127.50 255.00 191.25 191.25 127.50

Total-A ll Product/ Service Sales 96 0.00 1,53 1.88

1,659.38

2,212.50

2 ,718.75

2,175.00

1,631 .25

1,087.50

2,175.00

1 ,6

N ote: Projected C ash Flow s and Incom e Statem ents differ from Sales Forecast because they have been prep ared on a cash ba sis.


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3 4

Sales Forecast - Year2 0 0 0

M onths 1 2 3 4 5 6 7 8 9 10 MembershipsU nits Sold 9 11 11 13 15 10 8 6 13 11 Price per U nit 240 240 240 240 240 240 240 240 240 240 24

Total M em bership Sales 2160 2640 2640 3120 3600 2400 1920 1440 3120 2640 2640

A cco unting

U nits Sold 3 4 4 4 3 2 2 1 2 2 Projects: O ver $5 00 1.38 1.75 1.75 2.00 0.57 0.39 0.30 0.24 0.48 0.42 0.42 Betw een $2 50 - $49 9 0.83 1.05 1.05 1.20 1.71 1.17 0.90 0.72 1.44 1.26 1.26 U nder $2 49 0.55 0.70 0.70 0.80 0.57 0.39 0.30 0.24 0.48 0.42 0.42

Total C om m ission-based Sales (Accting) 84.22 107.19 107.19 122.50 60.56 41.44 31.88 25.50 51.00 44.63 44.63 25.50

M arketingU nits Sold 3 4 4 4 5 3 3 2 4 4 Projects: O ver $5 00 0.55 0.70 0.70 0.80 0.95 0.65 0.50 0.40 0.80 0.70 0.70 Betw een $2 50 - $49 9 1.65 2.10 2.10 2.40 2.85 1.95 1.50 1.20 2.40 2.10 2.10 U nder $2 49 0.55 0.70 0.70 0.80 0.95 0.65 0.50 0.40 0.80 0.70 0.70

Total C om m ission-based Sales (M kting) 58.44 74.38 74.38 85.00 100.94 69.06 53.13 42.50 85.00 74.38 74.38 42.50

Finance

U nits Sold 2 2 2 2 3 2 2 1 2 2 Projects: O ver $5 00 0.33 0.42 0.42 0.48 0.57 0.39 0.30 0.24 0.48 0.42 0.42 Betw een $2 50 - $49 9 0.99 1.26 1.26 1.44 1.71 1.17 0.90 0.72 1.44 1.26 1.26 U nder $2 49 0.33 0.42 0.42 0.48 0.57 0.39 0.30 0.24 0.48 0.42 0.42

Total C om m ission-based Sales (Finance) 35.06 44.63 44.63 51.00 60.56 41.44 31.88 25.50 51.00 44.63 44.63 25.50

O therU nits Sold 1 1 1 2 4 3 2 2 3 3 Projects: O ver $5 00 0.22 0.28 0.28 0.32 0.76 0.52 0.40 0.32 0.64 0.56 0.56 Betw een $2 50 - $49 9 0.66 0.84 0.84 0.96 2.28 1.56 1.20 0.96 1.92 1.68 1.68 U nder $2 49 0.22 0.28 0.28 0.32 0.76 0.52 0.40 0.32 0.64 0.56 0.56

Total C om m ission-based Sales (O ther) 23.38 29.75 29.75 34.00 80.75 55.25 42.50 34.00 68.00 59.50 59.50 34.00

Total M em bership Sales 2160 2640 2640 3120 3600 2400 1920 1440 3120 2640 2640 Total C om m ission-based Incom e 201.09 255.94 255.94 292.50 302.81 207.19 159.38 127.50 255.00 223.13 223.13 127.50

Total-A ll Product/ Service Sa les 2,36 1.09

2,895 .94

2,895.94

3,412.50

3 ,902.81

2,607.19

2,079 .38

1,567.50

3,375.00

2,8

N ote: Projected C ash Flow s and Incom e Statem ents differ from Sales Forecast because they have been prep ared on a cash ba sis.


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3 5

A PPEN D IX E- Fixed A ssets

Fixed A ssets

List of Fixed Assets N ew or Used C ost Acquisition Date Useful Life (in m onths) M onthlyD epreciation AnnualD ep reciation

Fax M achine N ew $250 Jan-99 2 4 m onths 10.50 125.00O ffice Furniture

filing cabinet N ew $100 Jan-99 1 2 m onths 8.30 100.00desk N ew $250 Jan-99 2 4 m onths 10.50 125.00

chairs (2 ) N ew $100 Jan-99 1 2 m onths 8.30 100.00C om puter N ew $2,500 N ov-9 6 4 8 m onths 50.00 600.00

C ost M onthlyD epreciation

AnnualD epreciation

N ew Fixed A ssets 700.00 37.60 450.00

Existing FixedA sse ts 25 00 .0 0 50.00 600.00

Total Fixed A ssets 32 00 .00

87 .60 1050.00


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3 6

A PPEN D IX F- Start-U p Expenses

Start-U p ExpensesC ash Available N ow $3,000

Purchase fixed assets 700Rem od eling costs(fixtures, signs, paint, cleaning) 100Installation fees (equip., pho nes, hookup charges) 0D eposits (utilities, phone, hookup charges) 150Fees and Licenses 0Legal fees 100A ccounting and other professiona l fees 1 50Insurance 250Pre-opening labor expense 100Pre-opening training costs 0Beginning inventory 0Supplies (letterhead, form s, price tags) 200Prom otion (grand opening, prizes, give-aw ays) 0A dvertising (initial m edia, direct m ail, coupo ns) 0M iscellaneous 100

Total Start-up Expenses $1,850

Beginning C ash Balance $1 ,15 0

N ote: O w ner's personal saving s account source o f starting

cash.


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3 7

A PPEN D IX G - A dvertising Budget

A dvertising Budget - 1 9 9 9

M onth 1 2 3 4 5 6 7 8 9 10 11 12 Y

N ew spa perW Y N ew spaper 0 0 100 0 0 0 0 0 100 0 0 0Front RangeN ew spaper

0 0 0 0 0 0 0 0 0 100 0 0

C ham berN e w sletter/ Fa x

0 20 20 20 20 20 20 0 0 20 20 20

Trade Show 0 0 0 0 0 0 0 0 0 0 0 0D irect M ailM em bership N ew sletter

0 0 25 0 0 25 0 0 25 0 0 50

Recruitm ent M ailing 50 0 0 50 0 0 50 0 0 100 0 0Flyer to Sm allBusinesses

0 0 0 0 100 0 0 0 100 0 0 0

Yellow Pages (to belisted statew ide) 0 0 200 0 0 0 0 0 0 0 0 0

B rochures 300 0 0 0 0 300 0 0 0 0 0 0 C lub M em bershipsC ham ber of C om m erce

250 0 0 0 0 0 0 0 0 0 0 0

A m erican C onsultantsLeague

0 130 0 0 0 0 0 0 0 0 0 0

Tekkton Young Professionals

0 30 0 0 0 0 0 0 0 0 0 0

Rotary/ Kiw anis 0 0 150 0 0 0 0 0 0 0 0 0Luncheon Expenses 0 15 15 15 15 15 15 15 15 15 15 15O pportunity Fund 0 50 50 50 50 50 50 50 50 50 50 50

To tal A dvertisingExpenses

600.00

245.00

560 .00

13 5 .00

18 5.00

41 0.00

13 5.00

65.00

290.00

285 .00

85.00


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3 8

A dvertising Budget - 2 0 0 0M onth 1 2 3 4 5 6 7 8 9 10 11

N ew spa perW Y N ew spaper 0 0 350 0 0 0 0 0 100 0 0Front RangeN ew spaper

0 100 0 0 0 0 0 0 0 100 0

C ham berN e w sletter/ Fa x

0 20 20 20 20 20 20 0 0 20 20

Trade Show 0 0 0 500 0 0 0 0 0 500 0 D irect M ailM em bership N ew sletter

0 0 50 0 0 75 0 0 75 0 0

Recruitm ent M ailing 75 0 0 75 0 0 75 0 0 75 0Flyer to Sm allBusinesses

0 100 0 0 100 0 0 100 0 0 100

Yellow Pages (to belisted statew ide)

0 0 200 0 0 0 0 0 0 0 0

B rochures 300 0 0 300 0 0 300 0 0 3 00 0 C lub M em berships

C ham ber of C om m erce

150 0 0 0 0 0 0 0 0 0 0

A m erican C onsultantsLeague

0 130 0 0 0 0 0 0 0 0 0

Tekkton Young Professionals

0 30 0 0 0 0 0 0 0 0 0

Rotary/ Kiw anis 0 0 150 0 0 0 0 0 0 0 0Luncheon Expenses 0 15 15 15 15 15 15 15 15 15 15 O pportunity Fund 0 50 50 50 50 50 50 50 50 50 50 5

To tal A dvertisingExpenses

525.00

44 5 .00

835.00

960.00

18 5.00

160.00

460.00

16 5.00

24 0.00

10 60 .00


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A PPEN D IX H - Kansas Business D irectory Resources


A PPEN D IX I- Related Trade A ssociations


A PPEN D IX J- O ther Related M aterials


Consultant FaHQcilitation b Plan

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Transcript of Consultant FaHQcilitation b Plan