The following business plan was used for a college assignment CSU, Chico. All the information that it contains was used for educational purposes only.

Class Title: Business Plan Development and Financing Term: Fall 2015

Instructor: James Downing

Customer Relations Domain 8247 Avenida Tobalaba La Reina Santiago, Chile

+56 83639 029 crd@yahoo.cl

Justin Fodor ­ Founder justin.fodor@yahoo.com

619 977 6202

The enclosed information is confidential and is only intended for use by those permitted by

Customer Relations Domain.

Table of Contents

I. Executive Summary…………………………………………………………………………….2 II. Company Description…………………………………………………………………………..4 III. Industry Analysis………………………………………………………………………………..6

A. Size, Growth and Projections……………………………………...………………….6 A. Characteristics……………………………………………………....………………….7 B. Trends………………………………………………………………….………………..8 C. Key Success Factors………………………………………………………………....10

II. Market Analysis………………………………………………………………….……………..11 A. Segmentation and Target Market Selection………………………...……………...11 B. Buyer Behavior………………………………………………………….……………..11 C. Competitor Analysis…………………………………………………….……………..12 D. Estimate of Annual Sales and Market Share……………………………………….13

III. Marketing Plan…………………………………………………………………….……….......15 A. Overall Marketing Strategy…………………………………………………………...15 B. Pricing Strategy…………………………….…………….........................................16 C. Sales Process……………………………………………………………..........……..16

I. Management Team and Company Structure……...……………………………………......18 A. Individual Descriptions……………………............................................................18

II. Operations Plan………………………………....................................................................19 A. General Approach to Operations ……………………………….............................19 B. Location, Materials, Equipment, Regulation………………...................................20

III. Material Design and Development Plan……………………………...................................22 A. Timeline……………………………………………...................................................2

2 B. Retrofitting the Building ……………………………………………..........................22 C. Design and Development Budget ……………………..........................................23 D. Intellectual Property Information…………………………………...........................23

IV. Financial Projections …………………………………………………..................................24 A. Source and Use of Funds…………………………………………….......................24 B. Assumptions……………………………………………...........................................24 C. Pro Forma Income Statement……………………………………...........................25 D. Pro Forma Balance Sheet………………………...................................................25 E. Pro Forma Cash Flows…………………………….................................................26 F. Ratio Analysis ………………………………………………....................................27

V. Works Cited…………………………………………............................................................28

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Executive Summary

Introduction The quality of customer service for the retail industry in Chile is extremely poor. This creates a need for customer relations instruction. Customer Relations Domain will address that need. Through interactive instruction and state­of­the­art tools, CRD will be the best place of its kind to send your employees to better their interpersonal communication skills in efforts to maximize the sale and increase profits for the retail. Company Description Customer Relations Domain is planning to begin operations in a three classroom brick­and­mortar facility in the downtown region of Santiago, Chile. This city is home to over 5 million inhabitants creating an enormous market for retail stores and restaurants.

Our company will utilize classrooms, a fictitious retail store, as well as online courses for specifically tailored customer service training. Industry Analysis CRD will compete in the “Business Coaching in the US” industry (NAICS 61143). This industry includes companies that offer short duration courses and seminars for management and professional development. The 11.7 billion industry is still in its growth phase. Growth for the “Business Coaching” industry is due to mainly to business sentiment and long­term trends. The industry’s biggest challenge is companies wanting to reduced money spent on training and instead, use internal resources to train employees.

The industry is competitive only regionally. Non­employing businesses represent an estimated 91.1% of revenue. The key success factors are flexibility, connections, reputation, partners and expertises. Market Analysis CRD’s trade area will be Santiago, Chile, but for the purposes of this market analysis we used data for San Diego, California. With 97 firms in the San Diego area, it is a very competitive marketplace. However, most of these firms are very broad in their approaches to business training. We believe that by focusing solely on motivation and customer service instruction, we will be able to carve ourselves a solid niche in the marketplace.

Customer Relations Domain’s student and income goals are as follows:

Month Total Students Total Projected Income August 20 $5,140 January 120 $107,940 April 180 $200,460 July 240 $292,980

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CRD will be focusing its efforts on the private sector since it accounts for 50% of the business coaching industry. We are expecting to be able to attain two new clients each month, with an average of ten employees each. This would allow CRD to have 120 students at the end of its first six months. Marketing Plan The overall marketing strategy goal of Customer Relations Domain is to make business owners and managers aware of the benefits of having their employees specially trained in customer service and sales.

Customer Relations Domain’s points of differentiation are as follows:

Curriculum is based on that of a highly competitive environment Only institute that focuses primarily on customer service and sales techniques as well as

English language learning programs Strong emphasis on bettering the employee attractiveness of each individual student

CRD’s promotional activities mix will be more heavily focused on grassroots marketing techniques and then social media and advertisement. Talks are underway to solidify relationships with employers and companies. Management Team and Company Structure Customer Relations Domain currently has a three person management team led by CEO and Founder, Justin Fodor, age 21. From a very young age Justin was always very motivated and enthusiastic. He strongly believes that a positive outlook and state of mind is very important in nearly any given situation. Justin has a Bachelors Business Entrepreneurship and Minor in Spanish Language.

Customer Relations Domain will likely be adding another manager in the future in order to cover more necessary skill sets. A board of directors still needs to be chosen. Operations and Development Plan Customer Relations Domain has not yet leased the building that it will be using. We are expecting for the lease to cost approximately $21,000 per year. Retrofittings will include the installation of white boards, computers, projectors, and speakers. We have estimated these retrofittings will cost approximately $50,000. As well as an imitation sales setting and desks for all of the students. Apart from the building, Customer Relations Domain still needs to develop the course materials that will be used in their classes. Financial Projections The business plan includes a set 2 years set of pro forma income statements, balance sheets, and cash flows. Customer Relations Domain projects steadily gained profit for the second year. Projected ROS for the first year is 8.44% and 8.71% the second year.

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Funding Sought In order to begin operations, CRD will require total funding of $322,000. This includes $30,000 invested by the management team, as well as $292,000 from an angel investor. Company Description

Intro Customer Relations Domain is proposing to open an educational space to provide the optimal place for employers to send their workforce to receive instruction on how to provide high­quality customer service.

Customer Relations Domain’s cofounders are Justin Fodor, Whitman Burke and Danna Thao. The company will be located at 247 Avenida Tobalaba La Reina Santiago, Chile. Justin Fodor can be reached by phone at 619­977­6202 or via email at justin.fodor@yahoo.com. Company History While studying abroad during college in Santiago, Chile in the spring of 2015, Justin Fodor, the founder of Customer Relations Domain was observed an opportunity in the marketplace for a viable business. He found that nearly without fail, no matter where he found himself spending money, he was dissatisfied with the quality of customer service he received. Often times, he left retail stores and restaurants thinking, “Why did I give that guy my money?”

Justin is acclimated to highly competitive customer service like that of The United States. With that, he thought that he could bring the style of how customer service is conducted in the States over to Santiago by training customer service employees. Mission Statement The mission of Customer Relations Domain is to provide the optimal place for employers to send their workforce for instruction on how to provide high­quality customer service. Tagline The company’s tagline will be what catches the potential customer’s attention so that he or she is able to re­paint the the original picture that they had of their business. “With us, your business’ potential is limitless.” From here, the idea is that potential customers of CRD will be filled with motivation and will be eager to enroll their workforce in our instructional services. Product and Service After conducting primary research throughout the city of Santiago composed of surveys and questionnaires to all people types, it was discovered that the customers are well­aware of the poor quality of customer service that is given in Santiago. Based on these research findings, CRD will provide courses targeting the topics that follow.

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Presentation: This course is designed to instruct the students how to present and conduct themselves while the customer is in the store. It will touch on dress code, posture, voice tone, etc.

Motivation: The intention of this course is to not only motivate the students in the workplace, but to also motivate them in their own lives. The idea behind this is that if employees are motivated outside the workplace, they will be motivated inside it.

Role­Play: This interactive instruction will place the student in a life­like sale setting. Real customers (not CRD staff) will be incentivized to participate in this tool to teach the student how to react based on how different types of customers shop.

Sales: The material covered in this course will focus on techniques and process used in successful selling.

English: The tourist industry is on the rise within the city of Santiago and many of these tourists are from English speaking countries. These tourists make up a large percentage of customers in retail stores and restaurants.

Current Status Customer Relations Domain is still very much in its planning stage. We have yet to file our articles of incorporation, and are not expecting to be ready to commence operations until mid to late 2016. The following milestones have been completed, and the following milestones remain to be completed for the company to start operations. Milestones Completed

Business plan completed $15,000 invested by management team $15,000 invested by family

Milestones Remaining to Be Completed

Feasibility analysis Gathering a management team Gathering a board of directors Leasing a building $292,000 invested by angel investor Create course materials Select and purchase equipment Hire personnel Prepare for grand opening

Funding Sought Shown in detail in the Financial Projections section of the business plan ­ $322,000

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Legal Status and Ownership Customer Relations Domain will be incorporated in Santiago, Chile as a Limited Liability Corporation. It will be owned by the management team, as well as an angel investor. We provided a detailed schedule of ownership in the “Management Team and Company Structure” section of our business plan. Industry Analysis

Industry Definition CRD will compete in the “Business Coaching in the US” industry (NAICS 61143). This industry includes companies that offer short duration courses and seminars for management and professional development. Training is provided through public courses or through employers' training programs, and the courses can be customized or modified. Instruction may be provided at the company's training facilities, client or educational institutions, the workplace or the home via television and the internet. There are currently no major players within the industry. Source: IBISWorld A. Industry Size

2012 2013 2014 2015 Industry Sales $10.4 mil $10.8 mil $11.3 mil $11.8 mil Number of Establishments 45,827 44,664 46,215 47,007 Employment 134.10 136.36 139.02 141.31 Industry Growth

2012 2013 2014 2015 Industry Sales 16.3% 4.6% 4.4% 4.0% Number of Establishments 21.0% ­2.5% 3.5% 1.7% Employment 1.7% 1.7% 2.0% 1.6% Industry Sales Projections

2016 2017 2018 Industry Sales $12.3 mil $13 mil $13.6 mil Growth Rate 4.6% 5.7% 4.6% Source: IBISWorld: October, 2015 Summary

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The industry is in the growth phase of its life cycle. This is due to mainly business sentiment and long­term trends. The industry’s biggest challenge is companies wanting to reduced money spent on training and instead, use internal resources to train employees.

According to IBISWorld, the Business Coaching industry is expected to grow faster than the overall economy to the year 2020. Industry value added, a measure of the industry’s contribution to the overall economy, is expected to increase at an annualized 6.9% from 2010 to 2020, while the US economy is expected to grow at an average annual rate of 2.5% over the same period. Since the beginning of the economic recovery and subsequent expansion, there have been steady increases in the number of operators, rapid technological change and new products, skewing industry growth. More companies have embraced professional skills programs as an important method of training key management personnel, which is indicative of the industry’s growing life cycle stage. Senior managers are leading organizations in an increasingly competitive and global economy, so businesses use this industry’s services to teach managers to navigate these problems.

Industry participants are facing increasing external competition from other education operators involved in the Colleges and Universities Industry (IBISWorld report 61131a) and the For­Profit University Industry (IBISWorld report 61131b). This competition is evident in the large increases in Masters of Business Administration degrees, which involve similar content to some of the courses delivered through the Business Coaching industry. Industry operators also face competition from internal training and development departments of larger corporations. B. Industry Characteristics Structure: The concentration for this industry is considered to be low. IBISWorld estimates that the three largest companies account for less than 5.0% of industry revenue. As a result, the Business Coaching industry is highly fragmented, with a large number of small enterprises operating throughout the United States. The vast majority of operators are nonemployers that service only their local area. Non­employing businesses represent an estimated 91.1% of all companies operating in this industry. In spite of this, sole proprietors generate only 11.1% of industry revenue.

Other structural characteristics of the industry include the following:

Competitors: There is a large number of operators that have a relatively small number of employees. About 73.3% of employing companies have fewer than five employees, while companies with fewer than 10 employees represent 84.7% of enterprises. This low level of concentration causes most competition to occur on a regional basis; however, larger organizations operate in more than one location.

Barriers to entry: Overall, there are few barriers to entry for Business Coaching industry. Investment requirements are low, and there is minimal regulation of the industry. As a result, the industry has a low concentration with a large number of owner­operated businesses. The ease of entry allows these non employing businesses to enter and exit the industry in line with changing conditions. Business coaches are good examples because they have minimal fixed costs and can set up or leave the industry with little expense incurred.

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Credibility: Reputation is important; therefore, new establishments in this industry may

initially face difficulties attracting students. Establishments generally need to have a quality training reputation to attract both individual students to public seminars and courses and corporations seeking customized training for their professional and management staff. This industry requires a relatively low amount of start up capital. Technology is changing at a medium pace. The volatility of this industry is at a medium level. There is not much regulation. Source: IBISWorld Trends The business coaching industry is currently in a growth stage after bouncing back from the 2008 recession. As businesses are continuing to recover, corporate profit margins are steadily improving at around 4.6% annually, and they are expected to continue growing at that rate until 2020. As corporate profits increase, so do other factors in the growth of the business coaching industry. As corporate profits increase, so to does disposable income, which has increased at an annual rate of 2.4%.

These expansions in corporate profits and disposable income set the stage for some real growth in the business coaching industry. With all this extra money entering the playing field, it is a good time to be entering the field. Especially as viewpoints on the value of business training are becoming more accepting.

However, with conditions ripe to start a business in this industry, we are not going to be the only ones to do so, and competition will be growing in the coming years. Along with increasing competition, we are in a time where technology is growing and getting more advanced faster than it ever has before, and these changes are making there way into the education field as well. Online training is becoming more and more popular due to its minimal financial requirements. And with online classes and other uses of technology potentially reducing the start up costs of a business in this industry significantly, it will grow more difficult to effectively differentiate from other firms in the industry while still keeping costs low. Long­term Prospects Things are looking pretty good for the business coaching industry at the moment. They have been growing at a rate faster than the US economy for the past five years, and they are expected to do so again for the next five years. After dropping down to a $6.94 billion industry due to the 2008 recession, business coaching has made a great turnaround, growing nearly 70% between 2009 and 2015 to a total revenue of $11.76 billion. The industry is expected to continue this growth period in the coming years, and if analysts are proven right, business coaching should be a $15.74 billion industry by the year 2021.

One of the main difficulties moving forward will be keeping up with technology. Technology is advancing now faster than it ever has, and it could potentially be very expensive to keep up with the times if we hope to be strong in technological education. It will likely be very

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important to stay up to date on technology since the business coaching industry has moved past its quantity growth stage and into in quality growth stage, and in today’s world students expect to be taught about emerging technologies. Cost Structure IBISWorld Profit: Over the past five years, the industry experienced a rise in profit margins due to a surge in industry demand. Many industry clients are slowly increasing non­core spending after a period of cost cutting to maintain their own profit margins. The fall in profit for industry operators caused consolidation, with some operators closing branch offices and reducing employee headcount. Smaller companies experienced the biggest fall in profit in light of the poor operating conditions, causing many to leave the industry altogether. Although improving demand is boosting profit, the industry’s low barriers to entry will ultimately limit the profit growth over the next five years. Wages: Wages and salaries account for the largest portion of industry revenue because most teaching is conducted on a face­to­face basis. Wages account for an expected 28.5% of industry revenue in 2015, which includes wages for teaching, administration and management staff. The wages category also includes an allowance for the wages of self­employed operators in the industry. This proportion is lower than the average for the overall industry. During the next five years, wages are expected to fall marginally as a proportion of revenue as increases in the cost of purchases offset the further development of online courses reducing the need for live coaches and trainers. In 2020, IBISWorld estimates that wages will represent 27.9% of industry revenue. Purchases: Purchases form a significant proportion of overall costs, at 10.4% of industry revenue. Purchases include materials, equipment and property and leasehold improvements. Course development costs, which are associated with developing and refreshing courses, are also considerable, at an estimated 7.0% of total industry revenue. Because it is important for providers to offer courses that are current, they must frequently invest in updating course material. Over the next five years, this segment is expected to increase, due to higher costs of the cost of materials and equipment. Marketing: Advertising and marketing expenses make up a large cost for industry operators because business coaching is still gaining acceptance and competition is strong. The larger companies in the industry have emphasized the importance of marketing and advertising in their operations. Marketing is expected to account for 3.0% of industry revenue in 2015, and is projected to increase as operators continue to incorporate new products into their portfolios. Rent and utilities: The cost of rent varies among operators: while some own their training facilities, others rent them. Operators that serve business clients may use the business’ facilities to reduce costs. This move reduces capital and also rent and utility expenses, which are estimated to represent 4.8% of industry revenue. However, over the past five years the cost of

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utilities has risen. Electricity prices have increased due to higher input prices such as coal. In addition, water and gas prices have risen and hurt industry profit margins. Other: Industry operators also incur a variety of other expenses, such as fees for legal and accounting work. Operators must also pay for other day­to­day costs of running a business, such as administrative expenses and travel to and from clients. Continuing education and training fees also contribute to these costs. For those who are self­employed, self­employment taxes account for a significant amount of profit earned. In total, these other costs are estimated to represent 42.1% of industry revenue. Key Success Factors IBISWorld

Flexibility: Ability to alter goods and services produced in favor of market conditions: Establishments in this industry must be able to change or adapt the courses offered to suit the needs of attendees. For instance, recently there has been increased demand for IT management training and quality assurance training.

Connections: Provision of superior after sales service: Establishments that provide a

higher level of after­sales service have a competitive advantage over those that do not in cementing client relationships.

Reputation: Having a good reputation: The perceived value of a company is important

for the recruitment of new clients for seminars and workshops.

Partners: Being part of a franchising chain: New establishments in this industry can benefit from offering courses under license from a larger organization. This reduces the costs associated with establishing new courses and maximizes economies of scale.

Expertise: Access to highly skilled workforce: Trainers in this industry must have an

appropriately high level of skills and experience.

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Market Analysis

Market Segmentation and Target Market Selection For the purpose of the Customer Relations Domain (CRD) business plan, the Business Coaching in the U.S. industry is segmented by the type of background of which the firms originate. The total dollar amount of the Business Coaching industry is $11.8 Billion. Private Sector: 50% Public Sector: 24% Individual: 18% Non­profit: 8% Figures found on IBISWorld Additional ways that this market is segmented include the number of employees that business coaching firms contain and the type of skill that is focused. Target Market Selection: CRD will target the private sector that is 50% ($5.9b) of the industry. Private sector The majority of enrollments in this industry are through corporations and the private sector, accounting for an estimated 50.0% of industry revenue. The majority of participants are from middle management and upper­middle management. In this segment, training courses and seminars may be customized to some degree to meet the specific requirements of the particular corporation. The training may be general in nature or on a specific topic relevant to the company at the time. For instance, companies might send senior employees to a training seminar on change management during a period of company restructure. However, low corporate profit caused many companies to reduce spending on training expenses, slowing demand for training in this segment. Demand from this segment is expected to return as business sentiment continues to improve over the next five years. Buyer Behavior Buyer behavior in the business coaching industry varies greatly by the products that are being offered. In the case of professional development and management development, industry revenues are very much tied with overall corporate profits. Companies generally only spend money on employee training when they have discretionary funds. Because of this, the B2B business coaching market took a considerable hit during the 2008 recession. It has however, bounced back considerably since then and is now at an all time high of $11.8 billion. IBISWorld

In the B2C business coaching industry, buyer behavior is very different. Instead of revenues being linked to corporate profits, revenues are more tied to the unemployment rate and governmental assistance. Customers in this industry are often unemployed people who are seeking to acquire new skills and lengthen their resumes so that they are able to obtain employment. Because they are unemployed, and likely to be suffering from little income, this

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market is also significantly affected by government assistance programs such as the Federal Government Workforce Investment Act. Competitor Analysis San Diego There are 97 firms in San Diego ­Bizminer Direct Competitors

Train Up University of San Diego, School of Business Administration Mastery of Training

Most of CRD’s direct competitors focus on a broad range of business training. CRD will focus solely on motivation and customer service instruction. Most firms have customer services training but the courses are primarily one or two day seminars. CRD will polish and make our students become experts in customer service by offering a 6 month series of courses. Moreover, many of CRD’s direct competitors do not have courses geared towards motivation. CRD will establish a competitive advantage in Santiago by focusing on motivation and customer services instruction in addition to English language curriculum. Indirect Competitors Indirect competitors are firms that are offering business skills but does not focus on customer services or sales. Many of the companies in the San Diego County focus mainly on training entrepreneur and startup companies. Future Competitors The business coaching industry is expected to grow in the coming years as indicated in the industry analysis earlier. Most of the industry contains of nonemployers and are local so future startup companies will most likely be local competitors. CRD hopes to establish a strong brand and connection to business before these competitors move into the market. Competitive Analysis Grid

Name CRD Train Up USD, School of Business Administration

Mastery of Training

Geographic Location

Even Even Even Disadvantage

Staff Even Even Even Even

Price Advantage Even Disadvantage Advantage

Breadth of clientele

Disadvantage Advantage Advantage Advantage

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Summary The grid shows that CRD will compete on par with competitors regarding location and staff. In comparison, CRD will have a disadvantage with customers since the competitors have been around and CRD has started in the market. However, CRD will have an advantage over price by offering courses that deliver more value and more affordable. Estimate of Annual Sales and Market Share The following steps were taken to estimate annual sales for Customer Relations Domain. Step 1: Determine number of students CRD will have.

CRD’s student target for the initial 6 months of operations is 120. An average of two new firms each month with an average of ten employees per firm. Each month after our first 6 months of operations, 20 students will graduate, but they will be replace by 20 new students. Step 2: Based on 240 students, what will CRD’s annual sales be?

CRD estimates it will take 12 months to reach 240 students. Projections for the end of year 2016 will be 240 students reached and 250 students reach in 2017. It will generate income in the following two ways: Student Fees: Firms will select and pay for any or all of our five courses. Our courses are also offered online for a discounted price. CRD estimates that 70% of our students will be classroom based and 30% online. Classroom courses are $335 each and online are $75 each. 2016 Students Enrollment Projection

Number of New Members On Site Online Total

August 14 6 20 September 14 6 20 October 14 6 20 November 14 6 20 December 14 6 20 January 14 6 20 February 14 6 20 March 14 6 20 April 13 5 18 May 13 5 18 June 15 7 22 July 15 7 22 Total 168 72 240

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Total Projected Revenue: August: $5,140 September: $10,280 October: $15,420 November: $20,560 December: $25,700 January: $30,840 February: $30,840 March: $30,840 April: $30,840 May: $30,840 June: $30,840 July: $30,840 Annual Projected Revenue of 2016: $262,140

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Marketing Plan

A. Overall Marketing Strategy: The overall marketing strategy of Customer Relations Domain is to make business owners and managers aware of the benefits of having their employees specially trained in customer service and sales. We plan to sell them on the idea that our educational institute is the best place for their employees to obtain the necessary characteristics that are needed to provide exceptional customer service and to increase sales. Our primary tactic is to physically enter the local retail businesses and restaurants to present them with we have to offer and how we can help improve their productivity in regards to sales.

We believe that managers and owners in the current market desire to improve sales and increase profits. We also acknowledge that the current members of the customer service industry generally do not contain the traits that are needed to generate healthy sales numbers and long­term profits. At CRD, companies will be able to send their employees to gain this particular knowledge and expertise in effort to overcome their competitors by properly accommodating their customers and maximizing sales opportunities. The proper training from CRD will assure happier customers for our clients.

Positioning: CRD’s target market is small to mid­sized retail and restaurant businesses that have the ambition to improve the experience of their employees in effort to increase sales, within the region of Santiago, Chile. Our position in the market is to offer specific programs focused on improving the customer service and sales skills of our students at a price that is affordable to small to mid­sized firms. Points of Differentiation:

Curriculum is based on that of a highly competitive environment Only institute that focuses primarily on customer service and sales techniques as well as

English language learning programs Strong emphasis on bettering the employee attractiveness of each individual student

Product Attribute Map: CRD’s positioning strategy and its primary point of differentiation is displayed below in the product attribute map. Employers will know that they are enrolling their employees in a program that is tailored to specifically to one goal in supplement to English language instruction: the improvement of customer service skills. There is no concern of other topics or subjects. CRD ranks lower in comparison to universities because we do not offer a range of topics for instruction. In contrast, we rank at the top of the needs of our clients because we solely focus on delivering information that directly applies to customer service and business sales.

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B. Pricing Strategy: CRD will adopt a policy of value­based pricing and will charge enrollment fees based on course modules (online vs. in person), the size of the firm and number of students that are going to be enrolled. Our prices will structured (1) in reference to our direct competitors in the same district and (2) the value of the criteria perceived by our clientele. Prices vs Direct Competitors

CRD Direct Competitors Average

Courses Online $75 $75 Courses On Site $335 $433

Summary: The chart shown above displays that CRD’s prices are more affordable in comparison to our direct competitors. C. Sales Process / Cycle:

1. Prospecting Referrals from current and previous employers

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Direct mail Responses from emails Responses from billboards and posters throughout the city Walk­in personal advertising

2. Initial Contact Prospects are provided an information packet about CRD Radio and print ads will direct potential employers to CRD’s website which will

contain informational videos, promotional materials, and the beginning of the enrollment process.

3. Qualify the Lead If a potential student does not join initially, they will be contacted by email or

phone as a follow up. 4. Sales Presentation

Potential clients will be given a facility tour, and will be able to sit in on a class. A packet of client testimonials will be developed provided to potential students. Videos on website will encourage potential clients to begin the process online

5. Meeting Objections and Concerns Employees will be trained on how to answer common objections and concerns. In response to pricing objections, a video will be prepared that compares CRD’s

tuition fees to other vocational schools Another video has been made to compare CRD’s course selection to the

selection of other schools. 6. Closing the Sale

All employees will be trained to ask potential employers to join. Website will encourage potential clients to enroll their workforce, as well as

making it very easy to sign up on the spot. 7. Follow­Up

CRD will contact each client after their workforce has completed our program Clients will be asked about the improvement of their sales Satisfaction surveys will be distributed

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Management Team and Company Structure

Introduction The management mindset at Customer Relations Domain in centralized on motivation, energy and passion and to provide. At CRD, a welcoming environment will be created for both the staff and students. Employees will be selected based on qualification and overall motivation, as well as their dedication to providing an exceptional learning experience for our students. A. Management Team Justin Fodor, Founder and CEO, Age 21

Motivated, enthusiastic and charismatic, Justin will be responsible for executive decisions and style of operations of CRD. From a very young age, Justin was very motivated and maintained a positive outlook on like. He discovered that his state of mind during any given situation has a very strong impact on attitude and performance. Justin has always been very observant how employees conduct themselves and how that reflects his purchase experience. He has a Bachelors Business Entrepreneurship and Minor in Spanish Language and with his education and mindset, he does not see failure as an option.

Danna Thao, Marketing and Sales, Age 22

Responsible for marketing and sales of Customer Relations Domain. She has a Bachelors Business Entrepreneurship and a minor in International Studies. Danna co­founded her own organization successfully in Oroville for 4 years before merging into a bigger company. Including the years she spent on marketing and sales in her own organization and 2 years prior to that in another organization, Danna has 6 years experience in marketing and sales. Whitman Burke, Chief Technology Officer, Age 21

Very hard working and dedicated, Whitman will be responsible for setting up and maintaining computers and internet networks, building and teaching online course materials, and finding ways to increase efficiency through technology. Whitman has a bachelor’s degree in entrepreneurship. While studying to get his degree, he also worked on starting his own business. From this he gained some experience in software development, and became accustomed to working very long hours in order to reach his goals.

Summary: Due to the stage of development that CRD finds itself in, there are many gaps is the skill profile table. While the company remains small during initial startup phases, much of the responsibility will lie on our CEO. The company realizes that rapid growth will entail acquiring personnel to operate. Human resource acquisition will come with time and only the best types of people will be chosen to fill the positions as they arise.

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Operations Plan

Introduction CRD will operate an educational institution for highschool graduates. The operating model for the school is explained in the subsequent sections. A. General Approach to Operations Operating a school that primarily focuses on quality customer service and sales skills is something that will require a welcoming and positive environment that will motivate those who are within. This calls for business attire and a similar setting. Our employees and persons on the facility will need to produce a professional yet inclining feel to our students. …

The biggest challenge in operating an educational institution is creditability. Considering we will be an institution in the developmental stage, consumers and businesses want to be sure the classes are worth their time and money. No one wants a certificate that they do not know the worth of or why it is needed. Therefore, CRD will focus operations to 1) creating connections with businesses and firms to prove to future students that CRD will guarantee them an increase in getter a job position 2) provide high quality equipments with instructors that will give excellent training and 3) having a prominent reputation within the community. Backstage (Behind­the­Scenes Operations Activities) Instructor Selection: The instructors selected to lead each class will go through a screening process that identifies the eligibility based on previous experience in customer service and sales. Not only will our instructors need to be properly qualified based on experience, but must also display a sense of care for sharing their knowledge and insights to their students. More importantly, our instructors must highly motivated and charismatic. Classes: Being the primary basis of what we offer, each class will be specifically tailored to individual aspects of employee­customer relations. Student Motivation: A very important aspect to the operation of CRD will be the effort to make the students feel motivated and ready to acquire the skills necessary to be successful in the sales world. Employee Training/Education: Each and every employee will be trained to interact with students in a motivating fashion ­ greet with a smile and verbal contact in effort to make the student feel motivated and happy to be widening their business skills. Emergency Plans: The safety of our students is amongst the top of our priorities. In the event of a natural disaster, fire or other safety threatening crisis, employees will be equipped with the procedure techniques necessary to keep our students safe. Dedication Commitment: Front Stage (What the Attendees See and Experience) Student Tours: A prospective student will be provided a tour of our facility and offered a trial session to get the feel for the vibe and how we conduct our classes.

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Acceptance: Prospective students will be required to go through an application and acceptance process. This process will evaluate whether or not we feel the applying student is fit for a sales position, let alone, prepared to take on the additional workload that our courses will require. Orientation: Mandatory orientation for the students will be provided. The basis of this orientation will not only allow the students and faculty to become acquainted, but also gives a chance for the students to converse and “break the ice” amongst each other. Hours: Due to the fact that the certification is designed to supplement a college degree, class will be generally held in the evenings, allowing the utmost availability to students that are currently enrolled in other courses, as well to those who have employment obligations during daytime hours. Equipment: Computers, projectors and other electronic equipment utilized in instructing assistance will be state­of­the­art and top of the line. Other instructional aids will be of high quality and well maintained by our facilities management and IT staff. Inventory Because of the nature of its operations, CRD will hardly be required to carry any inventory. Schedule of Classes and Management of Peak Times In the beginning, the scheduling of classes will depend largely upon the number of students who have signed up for the program, and the selection of class times will be limited. If only enough students have signed up to fill a single class, then we would likely only have a single class each day, which would be held in the evenings to best fit into our students schedules. At this time, the program would be held to a strict schedule, and only a single course module would be taught each week.

As our student body grows, and we add more classes to accommodate them, classes will be offered at a much wider array of times. Also, we will be able to run multiple sections of our six module program. Allowing classes for separate modules to be run simultaneously, and allowing for much greater flexibility for our students. B. Location: The not yet determined location will be in close proximity to the college district of downtown Santiago to allow low­effort access to college students. This aspect of location will provide ease for not only tens of thousands of college students to arrive at our facility after a day of classes at their university, but also this central location will be optimal for anyone living in near the center of the city. How the Material and Classes Are Chosen The overall effort of CRD is to provide the educational materials that are explicitly designed for instruction related to customer service and sales techniques. To reach that vision, the following steps are to be completed in order to gain the proper insight on what exactly needs to be offered in regards to curriculum, equipment and other instructional aids.

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Equipment Operating the school will hardly require any equipment. Each classroom will require a computer, a projector, and speakers. The cost of equipment for a new classroom would likely be somewhere around $1,000. Also, we will need to build a stage and a setting of a retail environment, where students will be able to act out extensive and realistic sales or customer service scenarios. Government Codes and Regulations Further research and investigation of permits to meet codes and regulations is pending due to the fact that there has not been an exact location identified to hold the activities our CRD. Relation Between Business Strategy and Operations Strategy In­House vs. Contract Activities In general, almost all operations of CRD will be performed in­house. The main activities of CRD which include marketing, designing course materials, teaching, and employment services, will all be done in house. It is possible that contractors may be necessary at some point in the development of course materials, but there are currently no such plans. We would also need to contract out the design of our website, as well as any graphics we use on our website or marketing materials. Contractors will be needed to retrofit the building as well.

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Material Design and Development

Timeline If funding is obtained, CRD will open in Santiago, Chile on January 15, 2016. The following milestones have been completed and remain to be completed to open the institution. Completed Milestones: October, 2015 ­ Completed feasibility analysis Milestones to Be Completed January, 2016 ­ LCS

­Apply for trademark and copyrights February, 2016 ­Sign lease on building

­Connections with businesses and firms

June­December, 2016 ­Obtain commitment for funding ­Make final decisions and completion on classes and modules ­Begin hiring and training staff and employees ­Marketing and public relations

January ­ June 2017 ­Participate in communities events

August, 2017 ­Hold grand opening Retrofitting of Building Pending funding the location to hold CRD, the exact retrofitting calculation has not yet been determined however, a general idea is known for the design of the institution. Certain areas have been considered in order to make the building appropriate for desired use.

Installation of whiteboards, computers, projectors and speakers Creation of an imitation sales setting Desks for students

Challenges and Risks

Developing coursework: With little experience in the customer service and no experience in teaching, developing the lectures, assignments and exercises will be a challenge.

Attracting Chilean teachers with experience in business: We are striving to only employ only the best instructors for each subject. This will be difficult and expensive.

Funding from Chilean government: Being an educational institute by nature, we believe that the Chilean government could potentially help fund our operations.

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Design and Development Budget The budget associated with creating a facility appropriate for instruction on it opening date, is as follows: Item Cost Retrofitting Building $50,000 Desks $5,000 Computer Equipment $15,000 Marketing $10,000 Other $5,000 Total $85,000 Patents: CRD will not be producing tangible products therefore, will not need to seek protection through patenting. Trademarks: All of Customer Relations Domain’s special designs, logos, name, tagline and marks will all be appropriately protected by trademarks. Copyrights: The PowerPoints and other presentation used by CRD for instructional purposes will be protected by copyrights. Trade Secrets: Material that CRD will consider as trade secrets are what follows: the business plan, client lists, prospective client lists, instructional material, client / student survey results and financial records.

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Financial Projections

Sources of Funds (Dollar Amount)

Sources (to be acquired) Management Team Investment: $15,000 Family Grant: $15,000 Total Funds Committed $30,000 Total Funds Required $322,200 Total Funds Needed from Equity Investor $292,200

Uses of Funds (Dollar Amount)

Cost (est.) Building Retrofittings 50,000 Classroom Equipment 7,500 Development of Course Materials 1,500 Computer / Technical Equipment 3,200 Sales and Marketing 3,000 Attorney Fees 5,000 Other 2,000 Cash (working capital and reserve to cover 2016 expenses) 250,000 Total Required Funds 322,200

General (Assumptions) 1. The need for sound customer service employees will continue to be necessary as market competition rises. Source: IBISWorld Financial Statements (Assumptions) Income Statements

1. Sales forecasts are based on the analysis presented in the “market analysis” section of this business plan. Sales are projected to increase 4% each year.

Balance Sheets 1. Accumulation of accounts receivable

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Pro Forma Income Statement 2016, 2017 (Dollar Amount) 2016 2017

Gross Sales 262,140 272,626 (Cost of Goods Sold) 12,000 12,000 Gross Profit 250,140 260,626 Expenses

Officers Compensation 55,599 57,823Salaries and Wages 97,140 98,631 Rent 21,076 21,076 Advertising 4,351 2,200 Taxes 8,257 8,588 Other General and Admin Exp. 60,188 63,396

Total Expenses 247,011 251,714 Net Income 3,129 8,912 Pro Forma Balance Sheets 2016, 2015 (Dollar Amount)

2016 2017

Assets: Cash 78,318 88,078 Receivables 0 0 Inventory 0 0 Other Current 12,200 9,560 Total Current 12,200 9,560 Gross Fixed 0 0 Accum. Depreciation / Amortization 2,440 2,440 Total Assets 88,078 95,198 Liabilities Accounts Payable 3,200 0 Other Current 4,000 0 Total Current 7,200 0 Loans / Notes Payable 292,200 289,071 Total Long­Term 292,200 280,159 Total Liabilities 299,400 280,159 Net Worth 22,500 23,500 Total Liabilities and Net Worth 321,900 303,659

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Pro Forma Cash Flow Statements 2016, 2017 (Dollar Amount) 2016 2017

Cash Balance at Beginning of Year 322,200 78,318 Cash Flow from Operating Activities Net Income 3,129 8,912 Additions (sources of cash) Decrease in accounts receivable 0 0 Decrease in inventory 0 0 Increase in accounts payable 3,200 (3,200) Increase in short term notes payable 0 0 Decrease in other current assets (12,200) 2,440 Subtractions (uses of cash) Increase in accounts receivable 0 0 Decrease in short term notes payable 0 0 Increase in inventory 0 0 Decrease in accounts payable (3,200) 3,200 Increase in other current assets 12,200 (2,440) Total Adjustments 9,000 760 Cash Flow from Investing Activities Subtractions (uses of cash) Purchase of furniture 7,500 0 Purchase of office equipment 3,200 0 Total Adjustments (10,700) 0 Cash Flow from Financing Activities Additions (sources of cash) Increase in long term notes payable 292,000 0 Subtractions (uses of cash) Decrease in long term notes payable 3,129 8,912 Cash Balance at End of Year 78,318 88,078

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Ratios Analysis 2016 2017

Profitability Ratios ROA 3.5% 12.5% ROS 26.08% 74.27% Liquidity Ratios Current Ratio 1.69 N/A Overall Financial Stability Ratios Debt Ratio 3.4% 2.94%

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Works Cited IBIS World https://sandiego.score.org/node/8046 http://www.sdentrepreneurcenter.com/ http://www.3coreedc.org/ https://cdcloans.com/finance­resource­center/business­mentorship/ http://www.trainup.com/Business­Skills­Training­In­San­Diego­CA/2381/87 http://www.mastery.com/products/coursecatalog/bytitle

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