Sample Business Plan

1 Recruiter Network Systems Business Plan

RECRUITER NETWORK SYSTEMS, INC. BUSINESS PLAN

File No. 8902 Vwodek Wojczynski, Partner 286 Spadina Road Toronto, ON M5R2V6 416-929-8415 [email protected] Brian Pho, Partner 400 Applewood Crescent, Unit 100 Vaughan, ON L4K 0C3 905-482-0636 [email protected] Date submitted: July 9, 2010


Table of Contents

1. Business Description ....................................................................................................10

1.1. Industry Overview ........................................................................................................10

1.2. Company Description ...................................................................................................12

1.3. History and Current Status ...........................................................................................13

1.4. Goals and Objectives ...................................................................................................13

1.5. Critical Success Factors ...............................................................................................14

1.6. Company Ownership ....................................................................................................15

1.7. Exit Strategy .................................................................................................................15

2. Products / Services .......................................................................................................16

2.1. Product/Service Description .........................................................................................16

2.2. Unique Features or Proprietary Aspects of Product/Service .........................................17

2.3. Research and Development .........................................................................................18

2.4. Production ....................................................................................................................19

3. The Market .....................................................................................................................20

3.1. Industry Analysis ..........................................................................................................20

3.2. Professional and Advisory Support ...............................................................................21

3.3. Market Analysis ............................................................................................................22

4. Marketing Strategies and Sales ....................................................................................23

4.1. Introduction ..................................................................................................................23

4.2. Market Segmentation Strategy .....................................................................................23

4.3. How RNS will become real in our market .....................................................................23

4.4. Targeting Strategy ........................................................................................................23

4.5. Positioning Strategy .....................................................................................................23

4.6. Service Strategy ...........................................................................................................24

4.7. Pricing Strategy ............................................................................................................24

4.8. Distribution Channels ...................................................................................................24

4.9. Promotion and Advertising Strategy .............................................................................24

4.10. Sales Strategy ..........................................................................................................24

4.11. Sales Forecasts ........................................................................................................25

5. Development ..................................................................................................................26

5.1. Development Strategy ..................................................................................................26

5.2. Development Timeline ..................................................................................................28

5.3. Development Expenses ...............................................................................................28

6. Management ..................................................................................................................30

6.1. Company Organization .................................................................................................30

6.2. Management Team ......................................................................................................30

6.3. Management Structure and Style .................................................................................33

6.4. Ownership ....................................................................................................................34

6.5. Board of Advisors .........................................................................................................35

7. Operations .....................................................................................................................36

7.1. Operations Strategy .....................................................................................................36

7.2. Scope of Operations ....................................................................................................36

7.3. Ongoing Operations .....................................................................................................36

7.4. Location .......................................................................................................................38

7.5. Personnel .....................................................................................................................38

7.6. Production ....................................................................................................................38

7.7. Operations Expenses ...................................................................................................39

7.8. Legal Environment .......................................................................................................40


7.9. Inventory ......................................................................................................................40

7.10. Suppliers ...................................................................................................................40

7.11. Credit Policies ...........................................................................................................40

8. Financials .......................................................................................................................41

8.1. Start-up Funds .............................................................................................................41

8.2. Financial History and Analysis (current businesses only) .............................................41

8.3. Current Financial Position (current, takeover or franchise businesses only) .................41

8.4. Operating Forecast ......................................................................................................41

8.5. Break-Even Analysis ....................................................................................................41

8.6. Balance Sheet ..............................................................................................................42

8.7. Income Statement ........................................................................................................42

8.8. Cash Flow ....................................................................................................................42

9. Funding Request ...........................................................................................................43

9.1. Capital Requirements ...................................................................................................43

9.2. Risk/Opportunity ...........................................................................................................43

9.3. Exit Strategy .................................................................................................................44

10. Appendix A – Financial Information .............................................................................45

11. Appendix B – Charter Documents ................................................................................46

12. Appendix C – Detailed Job Description .......................................................................47


Statement of Confidentiality & Non-Disclosure This document contains proprietary and confidential information. All data submitted to Leadership Grant is provided in reliance upon its consent not to use or disclose any information contained herein except in the context of its business dealings with Recruiter Network System. The recipient of this document agrees to inform its present and future employees and partners who view or have access to the document's content of its confidential nature. The recipient agrees to instruct each employee that they must not disclose any information concerning this document to others except to the extent that such matters are generally known to, and are available for use by, the public. The recipient also agrees not to duplicate or distribute or permit others to duplicate or distribute any material contained herein without Recruiter Network System's express written consent. Recruiter Network System retains all title, ownership and intellectual property rights to the material and trademarks contained herein, including all supporting documentation, files, marketing material, and multimedia. BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE BOUND BY THE AFOREMENTIONED STATEMENT.


Executive Summary

Business Description

Recruiter Network Systems, Inc. is a new IT company serving the recruiting industry, located in Toronto, Canada. As a company our Mission is to make a powerful, positive impact for recruiters in North America. Collectively, we live from the intention of transforming the recruitment industry. Our mission is to make a powerful, positive impact and transform the recruitment industry, by democratizing the recruitment marketplace through our product that integrates a technology (Applicant Tracking Systems) and a proven revenue generating process (Split-Fee Revenue Model) for independent recruiters and small recruitment firms. What does this mean in practical terms? In essence, we are creating a way for recruiters to communicate with each other that will enable cooperation by leveraging already existing resources (a recruiter's database of unplaced candidates) and linking it with other recruiter's databases such that the correct candidates can be sourced and placed in companies that need the talent faster than was ever possible. Imagine if a recruiter is at a client's office and has exhausted his own and his personal network's resources to find a proper candidate for a job. At this point the recruiter has a few options, namely continue the search on the internet, call more people, and keep on making new connections with other recruiters. This process may work eventually, however it is time consuming. However, what if at this precise moment in time this problem disappeared? What if a recruiter had access to key information to hundreds of other recruiter's databases of unplaced and qualified candidates at the touch of a button on the internet or on a PDA application? Through our research into the marketplace so far, small recruitment firms and independent recruiters do not have the ability to compete with the larger, more established firms that have larger networks. What if we gave them an opportunity to level the playing field? As a robust online and mobile platform it will allow independent recruiters to work collaboratively and share half of the revenues of the total fee paid by the client (through a split fee revenue model) on searches, while radically decreasing the amount of time it takes to source candidates. Best of all, there will be no commission fees for the recruiters -- any recruiter will be able to simply use the system by paying a standard membership fee. This will provide more money for the recruiters and allow us to expand our network rapidly to other cities in North America.

Products and Services

Our product is a software product to be used by independent and small firm recruiters. This software will combine a world class Applicant Tracking System (ATS) with a split-fee revenue generation service. We saw the need for this product based upon years of research within the recruitment industry. ATS has been around for awhile. Sharing commissions (split fee revenue) amoungst recruiter is also not a new concept. The marriage between an fully equipped ATS/split-fee revenue generation is a new concept not explored before within the recruitment industry. We believe this product will assist independent and small firm recruiters to gross an additional revenue stream which will be added on to a full recruiter production desk. In order to develop this product, we will manage an offshore development team in the Philippines. For this


product / service , we plan on charging a monthly membership fee of $49.99 per month per user in order to use our system once launch has been established. We will incorporate this software product with various social media platforms (Facebook, LinkedIN, Twitter) and local monthly networking meetings in order for recruiters to build long-term relationships to increase existing revenue production.

The Market

We are an Information Technology company that services the recruitment industry. The recruitment industry is a $9.2B industry in Canada. (According to Statistics Canada) Most of this industry is comprised of independent recruiters and small recruitment firms. (There are very few major players within the recruitment marketplace). RNS will cater towards independent recruiters, small firms and start-up recruitment firms that want to eliminate competition and encourage collobration between other recruiters. Within the first year of launch (Jan 2011), we expect to start locally in the Toronto marketplace and grow to 100 recruiters using our system before expanding to a new metropolitan city. We believe this will take approximately 12 to 16 months. The same model that will be used to grow in Toronto will also be replicated in Montreal. We plan on educating our customers of our product through social media, article writing in trade magazines and networking sites. We plan on writing specific targeted articles on recruitment to industry trade magazines (ACCESS) in order for recruiters to raise awareness with our product and our brand. Utilizing exisiting social media recruitment sites (i.e. Recruitingblogs.com, ERE), we plan on establishing a solid brand and product that will bring a value add to small and independent recruitment firms.

Competition

We have investigated the competition. Currently, we believe that there is only one network system that combines a full CRM service with a recruiter split fee network. We have found that our competition has a minimal amount of recruiters using their system as they are new and upcoming. (incorporated 2006). There are many Applicant Tracking Systems (ATS) on the market at this time. There are also many split fee revenue generation systems on the market that allow recruiters to collaborate with each other to increase revenue production. We have not found a suitable, world-class Applicant Tracking System that provides the recruiter with a split fee revenue generation methodology. Our competition also charges the recruiter a commission fee ranging between 6% - 10% on each placement the recruiter makes with their system. In addition to the commission fee, our competition charges a monthly service charge per each recruiter per month in order for them to use the system. We plan on differentiating ourselves in three ways:

• Integrate a world-class ATS system with a very simple candidate/job order sharing system

• Catering to the local city / municipality by social media and in-person after hour networking events with recruiters only to build relationships and focusing on increasing revenue generation

• Offering this product at an affordable monthly membership service with no commission charge on each placement.

We believe the market is ready for this type of product. Recruitment is an industry that is growing exponentially with an increase in small start-up and independent firms due to the low initial start-up costs. There are very few products that cater towards independent recruiters and small firms. We believe this product will assist recruiters to increase revenue placement and be


able for recruiters to find new homes for their candidates and bring new job orders to the marketplace.

Operations

Our operations consists of in-house and outsourced resources. This department is designed with our clients in mind. Our intention is to build long-term relationships with our clients. We will be hiring part-time temporary employees through the first year of operation. Also, the software development will be outsourced. Operations within RNS will have three distinct phases:

a) Research and development b) Software development c) Software launch

We will be hiring people in four different categories:

• Short-term contract (full-time and/or part-time) • Outsourced • Contractors • Full-time/part-time permanent employees

We have minimized operational expenses by using existing resources from previous businesses. Also by using virtual services such as Fresh Books, Mozy and Intelligent Office.

Management Team

Our management team has a combined over 30 years experience in management roles. The key members of the management team are Brian Pho, Iffy Kazim and Vwodek Wojczynski. Mr. Pho has over 8 years experience operating a recruitment firm in downtown Toronto. As a recruiter, his expertise is in technical sales, engineering and manufacturing. Miss Kazim has over 13 years managing the operations of various businesses, with the key experience being at an IT firm where she managed a team of developers. Her expertise is in operations and financial management. Mr. Wojczynski has been in business for almost 9 years, initially in the design & advertising industry, and migrating to the coaching and consulting industry in 2006. As a business operator, coach and consultant, he has worked with over 30 businesses personally, has trained over 200 interns for him firm (over a period of 4 years), and has had personal experience in successfully accelerating the growth and development process of over 20 small businesses during the start-up/growth stages. Given our experience, we are clear about our strengths and weaknesses. As a team we have already been working together for almost 6 months. Organizationally, our chain of command will be Vwodek Wojczynski as the CEO (providing direction and decisions about the future), with Iffy Kazim, COO (operations and finance) directly reporting to him. Brian Pho, Marketing & Sales Manager will report directly to Iffy. (This is depicted in detail in our organizational chart).


As the business grows we will look at hiring new team members. We believe at this stage that the key management roles we will consider initially is for the Blue Ocean Department (Research & Development) Customer Service, and Finance. If a member of our management team leaves, our operations plan is to document the position such that new people can be developed to fulfill the role.

Risk/Opportunity

We have considered the possible risks involved with this business. These risks are:

� Market risks o New to the market o Not being able to obtaining customer/client base o Lack of ease of entry o Slow industry traction o Slower than expected adoption o Slow-times or recession o Slight risk of competition

� Operational risks o Slower than expected software development o The nature of software development and all the variables that contribute to

successful production � Staffing risks

o Finding the right candidates � Financial risks

o Mismanaged funds � Managerial risks

o Poor project management o Mismanagement of resources o Going off timelines

To mitigate the risks we have implemented the following:

� Methods and procedures to limit liabilities � Reserve fund � Continuity of operations plan

Financial Summary

We have calculated a start-up cost of $20,500. The operating forecast has been calculated for three different scenarios:

� Expected – this is the forecast we are using to for our operations and this is what we have based our plan on.

� Optimistic – this is the forecast where sales are beyond our expectations. � Pessimistic – this is the worse case scenario. This scenario provides forecast if

our sales do not go as planned and our costs are more than what we expected The numbers for the break even analysis are as follows:

� Total costs for the year = $174,795.00 � Therefore, break even sales for the year = $174,795.00


� Number of memberships sold for the year = $174,795.00/$50 = 3496 memberships � Each membership costs $50 (plus HST) per month. On average our monthly expenses

is $14,566.25. The number of units that would need to be sold on a monthly basis is $14,566.25/$50 = 292 (approximately).

Capital Requirements

We have $15,000 cash at hand and access to another $25,000 of invested liquid capital. To date no money has been invested in this business. However, there is some existing infrastructure and work that has been done previously around this concept that resulted in a BETA software system with $5,000.00 invested. The funds are required to start the business, and develop, market and sell the software. There are two items that we considered for capital requirements are:

a) Start up costs of $20,500, and b) The maximum loss incurred of $90,593.

Based on these two amounts we are requesting a $100,000 grant.

Source of funds:

Source Amount

Your contribution (If any) $15,000-40,000 Grant $100,000 Loans 0 Total $115,000-140,000


1. Business Description

The name of the company is Recruiter Network Systems, Inc. and its head office is located in Toronto, Ontario. The legal structure is a corporation, and it is a new company that is in its start-up phase. Our first product has been tested in beta, and we will require IT development staff to complete the beta software for alpha launch in the marketplace. The company will have 3 key partners, with outsourced IT development staff.

The people we market our products to are independent recruiters and small recruitment firms that intend on sharing half of the revenues (split fee revenue model) of the total fee paid by the client. The changes we see in the recruitment industry is the increased use of social media, collaboration and cooperation between recruiters. The reasons behind this trend are two-fold:

a) the need to increase gross revenue per recruiter will become more relevant in a hyper-competitive marketplace, and

b) socially people today are more inclined to collaborate and cooperate with each other, as evidenced by the explosion of social media tools and online sharing.

The way our company will respond to these changes is by offering a platform for recruiters designed by recruiters that leverages candidate and customer resources and support them in forming split placement revenue.

1.1. Industry Overview

The Recruitment Industry is a service based industry totaling $9.2 Billion Canada-wide as reported by Stats Canada in the chart below. Profitability of the industry has been marginally increasing over the past 5 years, with 66% of the total operating expenses going to paying for salaries, wages and benefits. Employment services. 2004 2005 2006 2007 2008p $ millions Canada Operating revenue 6,268.9 7,402.0 8,217.5 9,110.9 9,201.2 Operating expenses 6,033.4 7,130.8 7,938.1 8,751.5 8,807.1 Salaries, wages and benefits 4,517.8 5,268.0 5,704.4 5,826.7 5,788.6 % Operating profit margin 3.8 3.7 3.4 3.9 4.3 p : preliminary. Notes: - North American Industry Classification System (NAICS), 2007 - 5613. - Figures may not add to totals because of rounding. Source: Statistics Canada, CANSIM, table (for fee) 361-0001 and Catalogue no. 63-252-X. Last modified: 2010-03-31. In Ontario, our primary place of business, the industry represents well over half of the total output in Canada at 56.7%. While profitability has been steadily declining in Ontario it jumped


back in 2008 with the highest profit margin in 5 years at 3.7%. Salaries, wages and benefits represents 61% of the total operating expenses. Employment services, by province (Ontario) 2004 2005 2006 2007 2008p $ millions Ont. Operating revenue 3,770.8 4,392.3 4,722.7 5,299.5 5,220.3 Operating expenses 3,640.1 4,242.3 4,604.8 5,146.4 5,029.3 Salaries, wages and benefits 2,641.8 2,981.9 3,198.3 3,160.9 3,066.5 % Operating profit margin 3.5 3.4 2.5 2.9 3.7 p : preliminary. Notes: - North American Industry Classification System (NAICS), 2007 - 5613. - Figures may not add to totals because of rounding. Source: Statistics Canada, CANSIM, table (for fee) 361-0001 and Catalogue no. 63-252-X. Last modified: 2010-03-31.

Current Situation of the Industry

Based on conversations with recruiters and key customers we have outlined the current situation

of the recruitment industry below: 1. Saturated market 2. A lot of independent recruiters, working alone or in small groups 3. High competition, cut-throat marketplace with low margins 4. "Red ocean," over-saturated 5. Ease of entry into the industry (minimum requirements to start) 6. Entrepreneurial mind-set 7. Unlicensed industry, unregulated 8. There are no industry standards or compliance 9. Limited opportunities for recruiters to collaborate and co-operate 10. NPA and Top Echelon are both large global networks -- however, they are not focused

on local markets 11. Undefined industry practices 12. Split placements in the industry (NPA and Top Echelon), CRM systems exist

(PCRecruiter, HireDesk) 13. Low reputation of industry by key customers

Future of the Industry a) The use of social media is on the rise exponentially in virtually every industry (source:

Google.com) . b) As a service based industry recruiters will need to use a combination of direct search

and internet research (soft skills and hard skills) with an ever increasing rise of soft skills such as communication, collaboration and co-operation if they intend on being successful.

c) There is a lot of opportunity for growth and standardization d) The establishment of industry practices will emerge


Industry Market Segments

Industry market segments are defined by the recruiter and they can work with several industry

segments at the same time

For example, clinical, medical and bankruptcy/insolvency.

Impact of Recruiter Systems Network, Inc. on the Industry

Even though there is tremendous potential for it, no one has integrated the Split Placement Fees

and CRM systems into 1 application

Allow independent recruiters to join together to go after bigger clients “Simplify the placement process for both the recruiter and the client.”

1.2. Company Description

The legal name of the company is "Recruiter Network Systems, Inc." (RNS). We are an IT company servicing the recruitment industry. We are in the business of helping recruiters place more candidates faster through cooperation and collaboration. The product we offer is an online and mobile marketplace that integrates a CRM and split fee revenue system for independent and small recruitment firms. Our management offices will be at: 286 Spadina Road Toronto, M5R 2V6, and our branch office will be in Vaughan at: 400 Applewood Crescent, Unit 100 Vaughan L4K 0C3. The reasons for having these locations are to service different markets of recruiters.


Mission Statement Our Mission is as follows: Recruiter Network Systems, Inc. is an IT company that makes a powerful, positive impact for recruiters in North America. We live from the intention of transforming the recruitment industry. Inside of this intent we provide a world-class online community and marketplace for recruiters. Collectively, we are a path to collaboration, cooperation, membership, friendship and monetary growth. All of those who participate shall benefit from our organization’s intent, effortlessly and decisively, experiencing constant growth and fulfillment. Through each interaction, we serve the recruitment industry in the most positive of ways. Please refer to Appendix B for our Vision and External Mission.

1.3. History and Current Status

After building an initial business plan that combined Leadership Consulting and Recruitment we came up with a better idea that combined all of our expertise. The people that contributed to the formation of the Recruiter Network Systems were, Brian Pho, Iffy Kazim, Vwodek Wojczynski and Shauna McKenzie. The way the partners met was through networking and we developed our relationship through our work at RSC Business Group in the Sales & Marketing Leadership Training Program.

1.4. Goals and Objectives

We have outlined the key goals and objectives below.

• The top goal of the business is to reach $250,000 in revenues with 20% net profitability by end of fiscal year 2011.

• The plans for the future of the business are to launch new cities in Canada and the United States.

• The ambitions for the company are to be the world's largest global network for independent recruiters and small recruitment firms.

• The growth strategies we are developing are to grow the Toronto location to $120,000 at which point we will expand to other key cities in Canada and the United States.

• The rate of growth we are projecting for Toronto is exponential based upon the science of a network based model.

• As part of our growth strategy we plan on diversifying our offering to different cities across North America.

• Our short-term 90 day goals are: • To build a community of independent recruiters through social media • To source and manage an offshore IT development team • To obtain $100,000 in funding from the Leadership Grant • To establish a relationship with a SRED Consulant • Our long-term 3 year goals are:

o To have $480,000 in revenue generated from Recruiter Network Systems by August 1, 2013

o To have 6 other cities using the RNS (Recruiter Network Systems) (tm) by August 1, 2013

• Our long-term 5 year goals are: o To launch Elite Recruiter Systems for topflight recruiters in each location


o This system will focus on the top producers that are using our system, and will build a leadership program that will represent RNS in each city we have a presence in.

1.5. Critical Success Factors

The factors that will make this business a success are:

• Effective management of the IT Development Team • Adhering to the timelines of the project (development, implementation, beta testing,

alpha launch) • Effective Marketing and Sales System • Full participation of the recruiters/members on the beta launch of the Toronto Recruiter

Network • High adaptability and ease of use of software • The internal elements that have an immediate and direct impact on our business are: • Access to capital for the development of the software (delivery) and the company web

site (marketing) • Clearly documented specific and measurable goals for the first year (broken down into

quarters) • The external elements that have an immediate and direct impact on our business are: • Being known in the marketplace in the hearts and minds of our target market. (The way

we will cause existence of ourselves is described in detail in our marketing strategy). • A large recruiting community already existing in Toronto • Our major competitive strengths are: • Price • We have monthly membership dues for our services • There is no commission on recruiter split income • More accessible • Our fees are lower than our competitors • SaaS (Software as a Service, has no hardware requirements) • Mobile phone applications (Blackberry, iPhone) with instant access to RNS database • Ease of use • Contact data transfers from other CRM systems • Resume reader (parsing) • Integration with Microsoft Office • Free trial

During the BETA phase we will offer a full-out free trial where users will be invited to provide us with feedback. With the launch of Version 1.0, we will offer a membership and provide a deal for the BETA users . One of the major requirements for our success is the new capital to assist us in effectively meeting our upcoming challenges, including:

• Hiring IT Development staff for rapid growth • The development of our brand online (web site) • Marketing systems including: • Search Engine Optimization • Social Media Marketing Development (Blog, Twitter, LinkedIn, YouTube and Facebook)


• Email marketing system

1.6. Company Ownership

Ownership

1. Vwodek Wojczynski - Partner / Chief Executive Officer Brian Pho - Partner / External Division Director (Marketing, Sales & Customer Service) Each owner has 50% shares in the company The Management Team Vwodek Wojczynski, Chief Executive Officer Iffy Kazim, Chief Operations Officer Brian Pho, External Division Director Shaunna McKenzie, Sales Manager Robert S. Chun, Advisor John Morden, Advisor Ownership Chart As of August 1, 2010 Name Title (if Applicable) Number of

Shares Percentage of Ownership

Wlodzimierz Mikolaj Wojczynski

Partner, CEO 500 preferred shares

50%

Brian Yang-Ang Pho Partner, External Division Manager

500 preferred shares

50%

TOTAL 1000 preferred shares

100%

1.7. Exit Strategy

For our exit strategy we considered several options such as “Bleeding the company dry”, selling shares, liquidating, etc. Based on the advantages and disadvantages of each of these strategies we agreed upon having a Fair Buy/Sell Agreement. This agreement will be drawn at the time of incorporation.


2. Products / Services Recruiting Network Systems (RNS) is a recruitment marketplace built by recruiters for independent and small business owners in the recruitment space. We are an Information Technology company that merges the gap between a full recruiter CRM / contact management software service combined with a split revenue generation service. We provide this service on a monthly membership basis with no additional costs or hidden fees attached. The creation of a ATS service has been around for over 30 years. Split fee revenue generation amoungst recruiters has also been around for 30_ years. This product will be the first of its kind to introduce recruiters to a full contact management software database with the potential of increasing their production through sharing of candidates and job orders. There has not been a product out in the marketplace which can combine a full service ATS / CRM software with a split revenue generation service amongst recruiters. The product will offer the following services to the recruitment marketplace: Core Services (Recruitment) Full CRM software support Split fee revenue generation amoungst recruiters integrated with a full ATS software support Integration with many social media and mobile application server support for a variety of search functionality.

Pricing

We will be charging a monthly service fee of $49.99 per month per user. In order to attract recruiters, we will start beta testing and surveying recruiters in the Toronto region. Beta testers will be given access to the system for 3 months free to test out trails, bugs and troubleshoot the system. After a 3 month period, a monthly service fee of $49.99/month/user will be charged. For non-beta testers, we will provide one month free in order to generate critical mass for a certain population. Referral fees can be generated through existing members and through beta testers.

2.1. Product/Service Description

Our product is differentiated in the marketplace through price, ease of use and the use of split fee network systems. Other split fee network systems charge a commission for each placement that the recruiter uses in that network. These commissions range anywhere from 6% to 10% of the overall client fees. In addition to the commissions charged, a monthly service fee ranging from $80/month/user is charged to the recruiter that uses the system. This lowers the amount of commission the recruiter retains as we believe this system benefits the system user rather than the recruiter themselves. We differentiate ourselves in the marketplace by the use of a free beta testing network (anywhere from 1 month to 3 months) in which our service will be available on a subscription basis of $49.99/month/user. No commission will be obtained if a placement is made through our system and a minor set-up fee might be charged to the client. The system will integrate with many other social media platforms (Facebook, LinkedIN) in order to build local communities of recruiters in each major metropolitan region. RNS will also be developing monthly Recruiter Meetups and networking opportunities to meet other recruiters associated with the network in order to strengthen the relationship between recruiters who use the system. Recruiter meetups will also build a forum for recruiters in which recruiters can talk about their challenges that they


are facing within their industry. We believe that these network meetings can be promoted through social media sites and be charged on a free basis. Future membership to this service will be based upon referrals. We believe the potential of a recruiter network system is huge in order to grow candidate and job order base. By using this system, we believe recruiters can increase their level of production and be more efficient in placing hard to find candidates.

Future Applications of the Product

By having completed our initial research, and having two senior recruiters on our team, we believe that there is a large market for this product. Future applications include an enhanced membership package for recruiters who actively use our system in which we can increase our membership price. Large amount of tracking will be used to administer and track users within the system. Top producers will normally want to link with other Top producers who are actively engaged with our system and we believe an enhanced level of membership and services will be required to cater to these top producers. An enhanced level of membership will include: a) Access to other multi-national cities across North America with the potential of networking with other recruiters on an international level. b) An enhanced search capability to not only scan the candidates with one recruiter network but also with other potential recruiters. c) Exclusive face to face network opportunities with other recruiters who are also top producers to build relationships and increase revenues. d) A distinction between different recruiter niches for further recruiters to network within each speciality niche. (We recognize that recruiters specialize in certain market segmentations. The opportunity for like minded recruiters to network within a speciality niche can increase revenue production per recruiter).

Stage of Development Our product is in the early stage of development at this time. We believe that extensive

Research and Development with offshore development teams and product development will be required in order to bring this product from R&D to production. We plan on a March 2011 beta test launch timeframe with the remainder of this year used in product development, testing and beta-testing stage. We believe the market is ready for a product of this nature. Why? There are many independent recruiters that are working by themselves in order to create a successful practice. There are very little resources that cater towards independent recruiters at this time. We believe RNS would be a complete package offered to independent recruiters in which they can not only share resources but also take advantage of a full Applicant Tracking System in order to grow their business.

2.2. Unique Features or Proprietary Aspects of Product/Service

Our service is very unique in a very large industry which tends to be unregulated and entrepreneurial. According to Statistics Canada, there are over four thousand recruitment firms in the Greater Toronto Area. Within this group of recruitment firms lies independent recruiters, large multi-branch recruitment firms and small start-ups. Due to the low overhead costs of starting up a recruitment agency, we believe that many recruitment firms exist. However many


of these firms die out within the first 3-5 years of start-up. Our system caters towards small independent recruitment firms and help them survive the long start-up process that is required when starting any professional firm. We are offering a marriage between ATS and split fee revenue generation. We believe both of these markets have experienced tremendours growth throughout the years - however, there has not been a product that has a successful marriage between ATS and split fee revenue generation. The target audience has not seen an affordable, world class recruitment marketplace where recruiters can share candidates and client job orders in a system that is very easy to use. We can combine our recruitment experience and the I.T. knowledge of a professional management team to develop a world class system where many recruiters can share.

Our Uniqueness and Our Competition We want to start off as a local based community within a major metropolitan area. Our goal is to have every recruiter to use our system in order for them to be more productive in their environment and their work. Once local domination of a particular market / city has been achieved (100+ recruiters per city), we will then work in another location to build local recruiter domination. Currently, many split-fee recruiter networks are globally based that do not include participation with many local municipalities. Our competition does not promote monthly networking meetings in which recruiters can meet and build strong relationships with each other. We believe that existing systems are too complicated to use in an I.T. setting. Based upon these results, recruiters tend to shy away from networking or split-fee revenue generating systems. In order to maintain our growth, we plan on using an intern-based model system to keep our costs at a minimum. Using interns and more of a virtual based model to maintain and troubleshoot our sytem allows us to keep our costs affordable and lower as compared to many other split-fee network systems already on the marketplace. In order to promote our services, we can promote ourselves through regular governing boards (ACCESS) and also variety of Chamber events (Vaughan Chamber of Commerce and Toronto Board of Trade). Incorporation of RNS to existing networking social networking and regular networking sessions will be required in order to promote our product and/or services. (Toronto Buinsess Leaders, Vaughan Chamber of Commerce). We also plan on promoting our growth through educational articles written by RNS in recruitment trade journals and other human resource organizations.

2.3. Research and Development

We have a well positioned team in place and we are ready to develop the product in order to be successful. Our key contributors to this company will be the following:

Shauna McKenzie Marketing Director and R&D Shauna is responsible for Internet research, database administration, and providing support to our sales staff. Using NAICS classifications, she can identify different recruiter niches and maintain our current database of over 400+ recruiters. She will also be used for creating e-mail marketing campaigns, sales and business development. She is also responsible for all external development of RNS which includes customer service, account management and new business development. She is a recruiter / owner of a small recruitment practice as she brings over 7+ years of experience in the recruitment industry. Vwodek Wojczynski - Partner / CEO, Internal Division Manager Key individual accountable for the viability and profitability of the company. Vwodek will be responsible for direction, key decisions, organizational design and image, management structure, staff development, and research & development. Academic background: B. Honours in Design - York University/Sheridan College


Brian Pho - Partner / External Division Manager Key individual responsible for development of sales, customer service and account management. Responsible for new buisness development, application support and training. Brian brings 7+ years in technical recruitment working for both mid to large organization. Academic background: B. Chemical Engineering and Society - McMaster University). Iffy Kazim - Fulfillment Division Manager / Accounting Responsible for company operations, management of product development team, finances, book keeping and company accounting. (Academic Background: B. Civil Engineering - McGill). John Morden - Advisory services. Responsible for providing advice on company structure. Sits as a member of the Board of Advisors Robert Chun - Advisory Services Reponsible for providing advice on company structure and operations. Sits as a member of the Board of Advisors

2.4. Production

Service Our service is performed by in-house consultants with some contractor assistance in research and marketing. We will have 2 full time sales staff and an Operations member that will manage product development and programming teams. We deliver our service through a beta testing and survey approach which will include: initial assessment, business meetings, extensive phone consultation, one-on-one meetings and utilize a very specific coaching approach to our plan. We plan on marketing this product through the following approach:

Monthly recruiter meetup events. Article writing in HRPAO and trade organizations (ACCESS) Promotion through: Word of mouth Social media (Facebook, Twitter and LinkedIN) Online Video Opportunity for existing members to invite colleagues (Referral system)


3. The Market The market for our service is currently untested. Recruitment is a very volatile market in which few support services are specifically catered towards this industry. Currently many CRM software systems, to be useful for the recruitment industry, require heavy customization in order to bring an off the shelf CRM to a recruitment desk. There are many ATS systems currently available on the marketplace, however, none of these CRM combine a split fee recruiter arrangement in order for recruiters to increase their revenues. Our product caters directly towards the recruitment industry (NAICS: 561310 - Employment Agencies). Many recruiters are segmented by their very own niche specialities and rarely do these recruiters branch out from their niche markets. Split placements are currently performed by recruiters that share a similar speciality niche area , however these splits are done on a firm by firm level in which there is no forum or marketplace in which they can interact. Many organizations that offer split revenue placements are either globally based and do not emphasize on local concentration. One such firm is NPA (www.npainc.com) . NPA is a global organization that caters to 20 different countries around the world. Their goal is become more global and recruit more recruiters in other parts of the globe to become part of their system. This is the same model used by Top Echelon and other split fee networks.

3.1. Industry Analysis

Challenges to the Recruitment Industry The following challenges to the current recruitment industry are:

Lack of collobaration between recruiters in order to produce more split fee revenue. Lack of face to face communication with other recruiters in order to develop deeper relationships. Lack of trust amoungst recruiters. Most recruiters are working in competition with each other for very little profit and job orders. Lack of use in social media to network and market their own product The largest players to the recruitment industry are many split fee revenue generation networks. We also believe that many large recruitment firms have generated their own internal split fee networks that weed out independent recruiters and local competition. Some of the largest competitors in this space are: NPA - National Personeel Association Top Echelon and 3DORS.

We have seen many recruiting network systems move towards globalization. The advantage of large recruitment system is the potential of recruiting internationally however with this model, recruiters lose focus on localized issues. We then find too many recruiters too spread out throughout the network which causes lack of depth in each metropolitan area / region. Not only is the geographic region affected, but also market niches does not seem to be monopolized and a depth of knowledge in a certain niche area is not fully explored. We believe that the growth forecasts for recruitment networks are large and will grow exponentially. Due to the low start-up costs of a recruiter desk and a large lack of support for independent recruiters, we believe a system must be placed in order to serve this demand.


Having independent recruiters share in split revenue generation is one way that our system can grow and produce profitability. Stats Canada has already shown recruiting is a $4B dollar industry. 70% of these revenues are generated through small , independent recruitment firms in which RNS would provide a platform for.

Economic Indicators and The Effect of the Global Economy on Recruiter Network Systems (RNS)

With the fluctuation in stock markets, recruitment is bound to be affected by job loss, economic turmoil and natural disasters. All of these indicators point to job stability, economy and evidently the production potential of an independent recruiter. If a recruiter works independently, market fluctuations within a certain market segment affects the recruiter's income and production potential - sometimes the effects are magnified exponentially as evidenced in 2009 by several small recruitment firms we have spoken to. This is harmful financially for a small business owner, an independent recruiter or a small size firm that specializes in a specific niche. Recruiter Network Systems offers a pooled plan of recruiters in the same type of industry. We believe with a pooled plan of recruiters working in niche market segmentations will result in our system to be immune to market fluctuations. During any recession, one particular market segment is up while another market segmentation is down. Since RNS would be based on a membership only monthly fee, we believe that if we have a pooled resource of recruiters using the system at any given time, there will always be a recurring and constant flow of revenue into our system despite any market fluctuations. RNS would accomodate different market segmentations and have recruiters specialize in their own segmentation in order to become a collaborative resource. In this event, we do not believe that sharp fluctuations in the market will effect RNS production and revenue generation.

The Use of Technology, Vendors and Finances in Recruiter Network System In order to scale our operations, we plan on using virtual offices and communal business space in order to adapt and grow our business. We will use offshore development teams in Phillipines as most of the funding will be used to supervise, manage and develop the product. With a virtual officing environment, a monthly subscription fee can be paid to our vendor, Intelligent Office. The use of this subscription allows us to set-up satellite offices wherever Intelligent Office has a location. Currently, Intelligent Office has worldwide locations in over 60 countries. We will also use trade secret RSC Business Group Technology in order to survey markets, perform research and development and provide much needed market support in order to build an adaptable and robust system. RSC Technology will also be used in order to survey, assess and train recruiters and staff that will be available to maintain and troubleshoot the system. A Customer Service team can be used offshore to help RNS to reduce cost and maximize profitability. For our vendor list please review Section

3.2. Professional and Advisory Support

For our Profit Expectations Within First Year of Growth please refer to the Finance Section (Monthly Operating Forecast) Our vendors will be listed below: a) Phone System - Hip Communications - www.hip.ca b) Intelligent Office - Virtual Officing - www.intelligentoffice.ca c) RSC Business Group - R+D / Marketing and Survey Reporting - www.rscbusinessgroup.com d) Campbell Morden Inc. - Recruiter network system, link to market development, business development and sales.


Profit Expectations Within First Year of Growth

Our profit expectations are the following for the first year of growth after beta launch: Toronto - Membership $50/member Grow to 134 members = $6700 recurring revenue per month Montreal - Membership $50/member Grow to 100 members = $5000 recurring revenue per month Annual Projections for Two Cities: $11,700 *12 is approximately $140,000 per annum with two cities and gross annual revenue.

3.3. Market Analysis

There is a potential need for a recruitment marketplace in today's society. With gross annual revenues in the recruitment industry bloating to over $4B, many indepndent recruiters have nowhere to turn in order to build comradie, co-operation and most importantly, find a home for their hard to find candidates. There are current split revenue generation systems in place, however, these plans are more geared towards a global presence rather than focus on local concentration within a certain population. The demand is definitely in place - however, very little systems are created to cater towards this demand. There are many internal network systems within larger corporations. However, very few resources cater to the small start-up, independent and growing organizations. RNS will focus on localization rather than globalization. Few recruiters that produce large activity within a small segment will definitely benefit the system. The target audience are independent, small , home based businesses where they understand the use of collobration and co-operation in order to increase gross revenue in the end. Our localization can even be centered / focused upon certain geographic communities within the GTA. Vaughan is a growing yet bustling community with very little recruiter capitalization. We want to build recruiter systems that may be able to take advantage of the local community in order to grow and expand. Every year there are more independent and small recruiting firms sprouting up due to the low overhead cost it takes to enter the recruitment industry. Our product can cater to these groups of individuals and provide an open forum of colloboration, revenue growth and production control. Currently, there are no competitors in our space. There are many CRM and ATS systems out in the marketplace and there are many split fee revenue generation networks - however, we do not have a system that combines both of these together. Current Competitors for Split Fee Revenue Generation Networks are:

� NPA � Top Echelon

Current Competitors for CRM Systems are:

� PCRecruiter � Talent Technologies � Bullhorn


4. Marketing Strategies and Sales

4.1. Introduction

Our marketing plan will include local meetup groups, social media, referrals and writing in many trade organizations. Being recognized in ACCESS and ERE and other social media websites for online advertising will also be part of our marketing plan and strategy. We will use an already existing network of Toronto Business Leaders to promote RNS with selected speakers on a variety of topics within the recruitment industry. Once given, we will create Vaughan Business Leaders and start promoting our product through blogs, articles, social media and referral networks. Through mass media and viral, RNS will be able to branch out into other cities such as Montreal and Halifax.

4.2. Market Segmentation Strategy

The strength of RNS is based upon geographic localization and market segmentation.

Geographic segmentation: We will start by promoting our service through social media and networking groups around the city. With the addition of Toronto Business Leaders, we can definitely build more structure and networking opportunities amongst recruiters.

Product-user segmentation:

We can also start segmenting customers based on specific industry niches. Medical , Manufacturing, Industrial Distribution and sales can be grouped into same net base.

4.3. How RNS will become real in our market

We will target, create awareness and branch in 4 different ways: Hosting monthly localized networking events in conjunction with other already established networks. (JCI, NAAAP, Toronto Business Leaders) E-mail marketing campaigns with already built databases to these already established networks. Promotion of service through writing and being published in trade magazines and advertising with strategic partners (Monster.com, Workopolis.com) Branded logo on pens and stationary with our company name, number and e-mail attached. e) Attending tradeshows and unconferences will promote our brand and our awareness. f) We will employ the RSC Business Group training methodology and use interns to promote our brand. Compensating interns on a 'performance' basis will sort out the interns that truly intend on being part of our company and, those that do stay, will be developed to promote our brand in the marketplace. Our goal is to generate a culture that can provide what is needed and wanted to our market, and making sales happen by being of service to our community of recruiters.

4.4. Targeting Strategy

Recruiter Network Systems is focusing on Target (Niche) Marketing. Our niche market is

independent recruiters and small recruitment firms with a highly specialised offer.

4.5. Positioning Strategy

Our positioning strategy is in relation to our target/niche market. By using the principles of Blue

Ocean Strategy we are taking an already existing market and creating a new offer -- in effect it

is taking advantage of these markets and creating a new market out of it. Most of our positioning

strategy has been already discussed in Section 2 of our business plan.


4.6. Service Strategy

As discussed, we will be marketing towards independent recruitment firm, small firms and start-

ups. Our ease of use design and forming a recruitment marketplace for independent recruiters

to share databases and job orders in a cost effective structure will differentiate us from most of

the competition. Please refer to Section 2 & 3 for details on how we tend to market our strengths

to our customer base.

4.7. Pricing Strategy

As discussed, our pricing strategy is simple. A monthly subscription fee per user using our system. We plan on charging $49.99/month/user which can be paid through a merchant account (Visa, Mastercard) or online through paypal.

4.8. Distribution Channels

We will employ our own sales force and as of yet we are not thinking of selling our

product/service through distribution or channel network sales.

4.9. Promotion and Advertising Strategy

We plan on promoting our service through local networking groups, existing networking groups

(Chamber of Commerce, Toronto Business Leaders) and virally through social media.

(Facebook, LinkedIN, Twitter). We believe most recruiters are technology savvy and would be

able to find us by these means. Referrals from existing customers will also be a large part of our

marketing and revenue stream.

Marketing Vehicles

We will be able to create promotional materials in order to market our product. Sponsoring local

chamber events, promotional items and good old fashioned networking would be used in order

to spread the word of our service. Attendance in already large networking communiteies, golf

tournaments are all standards in order to promote our brand and our service.

In addition, we will be having a launch event for our software to introduce to our target market.

Promotional Budget

Most of our revenue costs will be allocated through advertising and promotions either through

corporate sponsorship, advertising or member participation.

4.10. Sales Strategy

We have already have a strong sales team consisting of 2 full time recruiters. Brian has over 9+

years of recruitment experience while Shauna has over 8+ years of recruitment experience. Our

existing networks combined with e-mail marketing campaigns and good old fashioned

networking will the bulk of our sales strategy.

Hiring of interns in order to develop lead generation would be ideal in order to be cost effective

during our start-up stage.


4.11. Sales Forecasts

We will start with Toronto. A monthly subscription fee of $49.99/month/user would be initially charged. Given that 100 recruiters within the Toronto marketplace use our system, this will produce an annual gross revenue generation of $5000. Once 100 recruiters has been attained, we will start branching off into other cities and repeat the process from Toronto. We are forecasting sales of $140,000 for the year.


5. Development Recruiter Network Systems is a new company. We will be launching it by August 15th, 2010.

5.1. Development Strategy

The attached diagram provides a sequence of events from the launch of RNS. The details for development of the business are provided below:

• Business Launch • Marketing and Research & Development

o Create target list of 300 recruiters to contact o Contact listed recruiters

� Introduce what we are doing � Schedule a survey � Offer them a trial offer of beta version

• Software development launch o Review feedback from surveys o Write business requirements report

� Review business requirements with stakeholders � Revise and finalise requirements document

o Hire programmers through ODesk o Work with programmers to develop the three main layers

� Data layer � Business layer � Graphical user interface

o Test system as it is being developed o Complete first phase of development

• Beta version launch o Offer beta version trial to recruiters that conducted survey with us o Get feedback o Incorporate feedback as required o Complete Version 1.0

• Software Launch Event • Version 1.0 launch • Sales (Beta conversion)

o Offer 3 month free trial to everyone who participated in beta version with one year contract

• New Sales o Offer to recruiters 12 month contract with one month free

• Continuous maintenance and tech support • Customer service development

o Conduct periodical surveys with existing users o Incorporate feedback

• Continuous new sales • Business Development and expansion into other Canadian cities

o Montreal o Halifax o Calgary o Vancouver o Winnipeg o Edmonton o Saskatoon


5.2. Development Timeline

The table below provides the development timeline: Development Item Launch Date Duration Business Launch August 15, 2010 - Marketing and Research & Development August 15, 2010 2 months Software development October 15, 2010 4 months Beta version February 15, 2011 1-3

months Software Launch Event February, 2011 - Version 1.0 March-May 15, 2011 - Sales (Beta conversion) March 15, 2011 - New Sales March 15, 2011 - Continuous maintenance and tech support

March 15, 2011 -

Customer service development April 15, 2011 - Business Development within other Canadian Cities

In the fourth quarter -

5.3. Development Expenses

Description of Start-up Costs Below is the description of the costs incurred at the start of the business. Please refer to Section 8.0 for actual cost of these items.

• Personnel: Required personnel costs to launch the business. At this time due to minimal set up required before the launch these are shown as zero.

• Legal/ Professional Fees: Any agreements that need to be drawn for setting up the incorporation of the company.

• Incorporation Fees: Fees to incorporate the business. • Rent: The down-payment for office space. There is no cost since we will be using

existing resources. • Equipment & IT infrastructure: This amount will be used to purchase a system to house

the software and build the network system. • Supplies: Cost incurred for office supplies, such as, paper, printers and toner, copier,

etc. • Salaries/Wages: None. • Payroll expenses: None. • Licenses/Permits: None. • Insurance: None. • Advertising/Promotions: The allocated amount will be used for promotional materials,

brand and related material development; website design and development, etc. • Accounting: The cost of accounting incurred during the incorporation and set up

process.

Description of Monthly Forecasted Costs Below is the description of projected monthly costs. Please refer to Section 8.0 for actual cost of these items.

• Accounting: a monthly fee for book-keeping and accounting. • Bank Fees: Monthly fees incurred for day-to-day business banking. • Salary: Salary for 3 key players. This is starting at a nominal amount. Once sales start

to happen then the salaries will be increased.


• Researchers/Surveyors: 3-4 researchers that will be working with us to conduct recruiter surveys. They will be employed for approximately 2 months.

• Software development: This is the cost of searching for and hiring developers. Paying programmers for development and maintenance. Our intention is to hire people through ODesk, in the Philippines.

• Fresh Books: On-line invoicing and accounting system. • Promotional materials: All materials used to market RNS Toronto. • Administrative Support: Any extra support we may require for basic office

administration. We will employ someone on as needed basis. • Legal: self-explanatory. We have put aside a contingent amount should we require it. • Marketing/Advertising: The cost of advertising in relevant publications. • Marketing Event – Software Launch: a large event that invites all recruiters to the launch

of the Software. • Mgt Team Bonus (split 3-ways): This 3-way bonus will start once we have started

making sales. • Mozy: On-line back-up system. • Networking: The network system required to run the software. • Office expenses: Incidental expense such as paper, pens, etc. • Phones: Monthly phone bills for use in office. • Rent: This is zero since we using existing infrastructure. • Licensing Fee: A 2% fee paid to RSC Business Group, Inc. in Los Angeles for

methodologies used. • Refund (Attrition): This is a contingent amount used to account for any attrition or loss of

existing business. It is 2.5% percent of total sales. • Sales Commissions: Sales commissions offered to any sales people hired. They are

10% of sales made. • Training: Cost for training that may be required for key players.


6. Management

6.1. Company Organization

Business Organization and Organizational Chart The business will be organized into 3 divisions, including:

• The External Division (Marketing, Sales & Customer Service) • Fulfillment Division (Finance, Delivery, Personnel) and, • The Internal Division (Quality Control, Communications, Administration, Blue Ocean).

The C-Level positions in the company will be Chief Executive Officer, Chief Operations Officer and Chief Financial Officer that will make the key directional/viability, operational and financial decisions for the company. As the company grows beyond 20 people we will also assign a Chief Culture Officer, that will be accountable for the development and maintenance of the company culture.

Ownership structure of the company The ownership structure is divided equally between two main partners: Vwodek Wojczynski and Brian Pho who will own 50% of company shares respectively.

Board of Advisors We currently have two members on the Board of Advisors, both providing distinct and essential support for the organization. Robert Chun Core Responsibilities:

• Support the executives in fulfilling on the company Vision and the future it stands for • Provide courage, inspiration, and spirit regardless of circumstances • Provide relevant information that can make a difference to company growth and

expansion John Morden Core Responsibilities:

• Provide relevant information on the recruitment industry • Support the executives as the company grows and expands • Be a sounding board

6.2. Management Team

Biographies of the Management Team

Brian Pho Biography Brian is a senior search consultant, technical recruiter and has been a partner with Campbell Morden, Inc. – an executive search firm located in Toronto, ON. He brings 7+ years of search consulting experience with a focus on technical sales, production/operations management and select opportunities in engineering and health informatics. He has provided many search assignments for companies in metal fabrication, CNC distributor/builder, production facilities, capital equipment manufacturers and select firms that specialize in providing application


development support to hospitals in health informatics. He holds a Bachelor of Engineering degree from McMaster University. Highlights

• 7+ years of technical recruitment expertise managing full 360 desk management. (Both customer and candidate development)

• Built a business with a strong manufacturing, engineering and service/distribution client base from ground zero.

• Forged strong relationships with key trading partners to develop long relationships in order to increase revenue. (NPA)

• Managed contractors on market segmentation, market development and hired / trained interns to document sales processes and procedures.

Responsibilities

• Produce sales results • Strategy development, business planning and execution for potential business growth • Management and hiring of interns and support staff in marketing and sales • Accountable for the development of the company website • Sourcing out strategic partners for rapid business growth

Vwodek Wojczynski Biography Vwodek is a growth coach and executive, and has been a partner with RSC Business Group, Inc. - a full service coaching and consulting firm headquartered in Los Angeles - for 4 years. He brings essential coaching and consulting experience with a focus on start-up and growing businesses, in Canada, United States and Turkey. He also brings a wealth of knowledge, know-how and skills from his work in branding, design and advertising assignments for clients such as Dell Canada, Campbell, Ontario Science Center and many other smaller organizations in North America and Europe. Highlights

• Owned a successful design & advertising business for over 5 years with key projects with Campbell's, Dell Canada and the Ontario Science Center.

• Managed a leadership team of 15 and an internship team of over 200 people in a global training and development company

• Produced breakthrough sales results at the global training and development company • Successfully trained over 250 interns, businesses and entrepreneurs since August 2006

as a Growth Coach, Culture Catalyst and Executive at RSC Business Group • Formally trained as an executive in the RSC Business Group Methodology by Founder,

Robert S. Chun • Has taught business courses at Ryerson University

Responsibilities

• Sets the direction of the company • Make decisions that enable the company to be viable and profitable • Fulfill upon short-term goals without losing sight of long-term objectives • Be accountable for all activities in the company, internally and externally • Train and develop company staff • Represent the company as an executive • Provide business development expertise


• Be accountable for the Research & Development department Iffy Kazim Biography Formally trained as an Engineer, Iffy brings a wealth of operational, financial, small business support, and management skills. Having worked in several management roles in her career, she brings essential process re-engineering and communications skills that allow her to look at the existing processes within any company and re-engineer them, thus maximizing profitability and producing results that lead to satisfaction and fulfillment for all involved. Highlights

• Formally trained as an Engineer • Volunteers at a global training and development company and produces courses of up to

200 participants • Has over 13 years experience managing teams of up to 40 people, at Service-Based

and Information Technology organizations • Has worked as a business analyst in a software company

Responsibilities

• Be responsible for the management of the IT Development Team • Manage the company finances as the Chief Financial Officer • Update the business plan, especially the development section. • Make course corrections as required • Represent the company as an executive • Provide operational support and solutions as the company grows

We are not planning additions to the management team within the first years. Officers and Key Employees Age % of Ownership CEO: Vwodek Wojczynski 30 50% External Division Director: Brian Pho 31 50% Fulfillment Division Director: Iffy Kazim 38 0% Internal Division Director: Vwodek Wojczynski 30 (same as above) Board of Advisors: Robert Chun 48 0% Board of Advisors: John Morden 60 0%


6.3. Management Structure and Style

Organizational Chart

Management Style

The foundation of our management style is based in "results based coaching management." This approach trains people to be responsible and accountable for the results they produce. In our management system the ultimate tool to examine what actions are to be taken -- or not to be taken -- is what happens in reality. While our methodology is ultimately a synthesis of a variety of different sources, the key management principles are derived from the RSC Business Group management philosophy. Other ideas can be found in "Management Rewired" by Charles S. Jacobs that challenges management principles based on the most recent brain science, the work of Ichak Adizes that identifies the ideal organizational life cycles, W. Edwards Deming who stresses timeless operational principles, and John King who shares about the power of organizational cultures and tribal leadership. The cornerstone to our management philosophy is creating a safe space where the truth can be told. The full extent of our management style and how the company will operate internally is outlined in our company's Internal Mission. The way we define an Internal Mission is a Promise our company makes to its members (the people within the organization) and determines how the company will behave. RECRUITER NETWORK SYSTEMS INTERNAL MISSION: As an organization and a system – collectively and individually: We are entrepreneurial, adaptable and flexible We cause, generate and maintain abundance, prosperity, profitability and viability for ourselves We adhere to our Charter – Vision, Mission, Internal Mission, culture code, values and operational definitions We live from compassion, honesty, generosity and wisdom We compensate those that produce correct results exceptionally well We respect individuality and work as a team We generate environments where the truth can be told We communicate openly and appropriately We operate transparently with nothing hidden We continuously recognize, reward, and remember our current team members and past members for their contributions We hold ourselves accountable for promises given and received We are responsible for all of our actions by acknowledging, making amends and cleaning up any and all mistakes we may cause directly and/or indirectly We always: Thoughtfully grow, develop and expand ourselves and the organization Account for and honor our humanity even as we grow, develop and expand

INSERT ORG CHART HERE


Make a positive, global impact together Generate our work and profit from living inside of an integrated global culture, effortlessly and decisively Take necessary steps to ensure ever-improving optimal individual and collective well-being, joy and vitality Operate at an optimal level collectively and individually Plan for, prepare, maintain, and develop new core competencies, foundations, and capabilities even as we reposition and build up our old competencies, foundations and capabilities. There is always more room at the top because: We are always growing and expanding our foundation, support and base We keep inventing, building, and reaching the next level – and the next level thereafter We leverage already existing resources while inventing, creating and maintaining new resources We never stop generating opportunities for those who will do what it takes to get us all to the next level Our door for growth, expansion, and advancement is open and will always remain open for anyone who wishes to walk through it and do what it takes. Whatever level people choose and build, they can have it and maintain it – or its equivalent – for their life. Each and every member of the organization is trained and developed in the business, cultural, social, emotional, intellectual, monetary and financial areas in the most positive, effective way possible. Each and every one of us grows as a human being and a fellow member of the company. The aspect of our management that is innovative is our sorting process for locating new talent so that people choose our company (versus the company doing the choosing). The innovative aspect of our management style is that the executives provide regular training and development for all interns and staff that join the company. We will not hire people from the outside of our culture unless they have gone through the basic training. This will protect our company culture and it is essential towards the growth and expansion of our business.

6.4. Ownership

The table below gives an outline of the ownership of this company. Name # Shares Held % Ownership Brian Pho, Partner 500 50% Vwodek Wojczynski, Partner 500 50%

6.5 Professional and Advisory Support Corporate attorney

Coutts Crane Barristers & Solicitors 480 University Ave., Suite 700 Toronto, Ontario M5G 1V2


Accounting firm William Yeung, CPA Compass Tax Planning 306-9140 Lelie Street. Richmond Hill, ON L4B 0A9

Application service providers www.Freshbooks.com (for invoicing) www.Mozy.com (for computer backup) GoogleApps (for email, documents and file sharing) www.1and1.com (for server infrastructure) GoToMeeting (for online meetings) www.Hip.ca (VOIP phone company) www.ODesk.com (for outsourcing IT talent and Virtual Assistants)

Professional service firms Intelligent Office (www.intelligentoffice.com)

Insurance agent Iliad Niaraki World Financial Group Consumers Road, North York, ON M2J 4R4, Canada (416) 492-3730

Bankers Royal Bank University & Dundas BR 443 University Avenue Toronto, ON M5G 2H6 Transit: 6542

Consultants We participate in online training provided by CultureSync, a consulting company based in Los Angeles.

6.5. Board of Advisors

Robert S. Chun brings over 22 years of coaching and management experience, having developed over 880 businesses directly and indirectly through the four coaching and consulting companies he has developed, built and maintained -- the newest company being RSC Business Group. As a strategist, futurist and an owner himself, Robert is an essential asset to the growth and development of the company, and its viability in the future. He can provide invaluable information, coaching, and guidance for the executive team. John Morden brings over 20+ years of recruitment experience as co-founder of Campbell Morden Inc. As a recruiter he placed top-level executives right to the C-Suite boardroom of several multi-national corporations in the plastics industry. Strategically he provides a vast range of experience and access to a global network.


7. Operations

7.1. Operations Strategy

Value for our customers:

As a robust online and mobile platform it will allow independent recruiters to work collaboratively and share half of the revenues of the total fee paid by the client (through a split fee revenue model) on searches, while radically decreasing the amount of time it takes to source candidates.

There will be no commission fees for the recruiters -- any recruiter will be able to simply use the system by paying a standard membership fee. This will provide more money for the recruiters and allow us to expand our network rapidly to other cities in North America.

Our customer service department will be able to follow up and offer additional services that makes a difference

� What is important to us:

For us what is important is long-term client building (customer service).

� We will have a procedures for customer service which includes: o Client relationship building o Dealing with clients with non-technical issues o Dealing with clients with technical issues

We are committed that recruiters form a network and have the ability to leverage their skills in partnership with others.

7.2. Scope of Operations

In-house and outsourced: • Marketing, sales and customer service will be conducted in-house. • Software development, maintenance and software trouble shooting will be out-sourced.

We are considering the following positions:

• Research assistants to assist in performing surveys. This is a short term contract position for about 3 months.

• Software developers with experience in ASP.net. We will be using an on-line service – and this is essentially being outsourced. However, ODesk requires us to interview people and “hire” them for the duration of the job.

• A customer service representative for non-technical service. Outside of technical issues all customer service will be done in-house.

• A programme specialists that will assist in trouble shooting. This will be outsourced. • An event planner to manage the software launch event. This is a short term contract. • We may hire an assistant as required.

7.3. Ongoing Operations

Operations within RNS will have three distinct phases: d) Research and development e) Software development f) Software launch


Research and development

During the R&D phase we will be conducting the following actions: • Contact recruiters and introduce ourselves and what are we doing • Invite them to participate in the survey • Let them know they will have an opportunity to try out the beta version of the survey • Schedule surveys • Conduct surveys • Log surveys • Analyse surveys • Gather business requirements from analysis • Create business requirements document

Software Development During the development phase we will conduct the following actions:

• Check software development progress • Find out what each developer is dealing and resolve issues • Attend weekly meeting to discuss progress and next steps • Provide guidance • Update other key members

Software Launch

Once the software has been officially launch we will be doing the following activities: • Ensure that the software is running reliably • Trouble-shoot any issues • Deal with customers as needed • Recommend upgrades as necessary to operations • This will be based on feedback that is received from existing customers

Our operations will be based on the context of our Company Charter which consists of the following components:

• Future History Strategy

• Vision

• External Mission

• Internal Mission

• Operational Definitions

• Core Values • The company will have the following structures and documentation: • Divisions

• Departments

• Operational Plan

• Procedure manual

• Sales manual

• Customer Service Manual

• List of Positions

• Job Descriptions (External and Operational Version)

• Job Process Flow


• Job Procedures

• Daily Activities and Practices

• Daily Checklist The key operational guidelines are as follows:

• Each person in the company has a job description (internal operational version and external public version for posting on job sites), with specific measurable outcomes that they create

• Management, staff and interns read the company charter daily

• Attend events that are targeted for recruiters

• Follow RSC Situational Formulas™ according to business conditions

• Quarterly planning meetings to be scheduled 1 year out

• Annual corporate retreats for annual planning

7.4. Location

Our program is internet-based, therefore, we do not require any permanent physical location. We will be utilizing existing infrastructure for any in-person meetings that may be required. Also, from time-to-time, we will be using Intelligent Office (www.intelligentoffice.com) for our office requirements. It is a virtual office solution provider with locations in Toronto, North York, Oakville, Hamilton, Vaughan, Mississauga and Ottawa and will enable us to scale our operation across the GTA with minimal investment.

7.5. Personnel

We will be hiring people in four different categories: • Short-term contract (full-time and/or part-time) • Outsourced • Contractors • Full-time/part-time permanent employees

For at least the first year we will be hiring people on a short term as needed basis. As demand increases we will part-time help to meet the increase. Besides the 3 executives we do not have any staff. Executive and managerial level positions are salaried. All junior level positions are paid by the hour. Due to the nature of our business and how we have operated at RSC Business Group Toronto and Campbell Morden, we want to ensure that anyone we hire on permanently is aligned with our culture and values. We will write job descriptions for all the different positions as we are set up operations documents. We will use the job format provided in Appendix C.

7.6. Production

The Recruiter Network Systems, Inc is an internet based company. Our interactions with our clients will be via phone and internet.


Virtual Delivery The software is internet based so once the client has signed the contract we will set up the necessary access and give them the password.

Customer service Our relationships with our customers are important to us and it is important that we provide value through the Recruiter Network – therefore our customer service program will be thoroughly developed to ensure the customer is getting what they want. The customer has the option to sign up for a news letter which will promote new programs, new research findings etc.

Quality control Quality control will be part of the customer service process. We will develop a Quality Control Survey that will be conducted regularly with customers and clients, their feedback will be used to up-grade our program.

7.7. Operations Expenses

We have minimized our overhead expenses by using already existing resources such as existing office spaces, utilities, equipment, etc. However, we have overhead expenses that are specific to this business, which are included in the following list.

� Accounting � Bank Fees � Fresh Books � Legal � Mgt Team Bonus (split 3-ways) � Mozy � Networking � Office expenses � Phones � Licensing Fee � Sales Commissions � Training � Transportation � Travel Expenses � Researchers/Surveyors � Software development � Promotional materials � Administrative Support � Marketing/Advertising � Marketing Event � Refund (Attrition)

Employee Expenses:

� Salary - Brian Pho � Salary - Vwodek Wojczynski � Salary - Iffy Kazim

Amounts pertaining to the above items can be found in Section 8 – Financial.

Cost Controls

The area with the most variables in terms of cost is software development. Our prior experience has taught us that software development usually goes beyond the dead-line and over budget.


To mitigate this we have allocated extra funds in the area of software development. A developer from the Philippines on average cost about $10/hour. We have allocated $15/hour for nearly 1,500 hours of development time. This cost will most likely be distributed among several developers. In addition, we have allocated 6 months for development which is more time than a project of this size should require.

Administrative and Financial Controls In order to provide controls over all operations of the company we will develop procedures for activities within the company. These will be followed. People will be rewarded for the work they produce. Financial controls are provided by monitoring cash flow and producing reports on a weekly basis to know what is the status of the finances at all times.

7.8. Legal Environment

We will use a license from RSC Business Group's licensing arm RSC TEK to use the business management know-how, business operations technology and financial reporting systems. The software developed is the intellectual property of Recruiter Network Systems. All contractors, employees, etc. are required to sign a non-disclosure agreement.

7.9. Inventory

This section is not applicable and will not affect the delivery of our service.

7.10. Suppliers

This section is not applicable.

7.11. Credit Policies

We accept all major credit cards including AMEX, MasterCard and VISA. All sales for the priviledge of using the Recruiter Network Systems are final. We do not offer refunds on our services at this time. If the RNS platform is not meeting your needs, it is your duty, job and obligation to inform us. Please contact us immediately and we will work with you to add the features you want or to correct any perceived issues with the platform. If you are dissatisfied with the level of support you are receiving from us after becoming a member, please contact us with your concerns so that we can address this issue immediately. We value you as a client and are committed to your satisfaction as a member of Recruiter Network Systems.


8. Financials In this section, we have developed the financials required for launching and operating Recruiter Network System, Inc. We have used numbers gathered from previous experiences. We have also consulted financial specialist, Gregory Doomanis, MBA, of RSC Business Group – who has over 25 years of experience in the financial sector.

8.1. Start-up Funds

The start-up budget is provided in the Appendix A. The cost listed are a combination of costs drawn from experience and estimated costs. We have calculated a start-up cost of $20,500.

8.2. Financial History and Analysis (current businesses only)

This section is not applicable.

8.3. Current Financial Position (current, takeover or franchise businesses only)

This section is not applicable

8.4. Operating Forecast

The operating forecast has been calculated for three different scenarios:

� Expected – this is the forecast we are using to for our operations and this is what we have based our plan on.

� Optimistic – this is the forecast where sales are beyond our expectations, our expenses for marketing and software development are lower than expected and attrition is only at .5%.

� Pessimistic – this is the worst case scenario. This scenario provides forecast if our sales do not go as planned. All expenses stay the same.

The tables with calculations are provided in Appendix A. We have attached tables for all three scenarios for the first year on a monthly basis, for years 2 and 3 on a quarterly basis and for years 4 and 5 on a yearly basis. Our company’s launch date is August 15, 2010. Therefore, the year is segmented as follows:

� First quarter – August 15 to October 31 � Second quarter – November 1 – January 31 � Third quarter – February 1 – April 30 � Fourth quarter – May 1 – August 14.

We have calculated sales based on number of memberships per month, and monthly expenses. We have also included a monthly Reserve Fund which is 7% of total sales per month.

8.5. Break-Even Analysis

The numbers for the break even analysis were obtained from Summary for the Expected Monthly Forecasts. Total costs for the year = $174,795.00 Therefore, break even sales for the year = $174,795.00


Number of memberships sold for the year = $174,795.00/$50 = 3496 memberships Each membership costs $50 (plus HST) per month. On average our monthly expenses is $14,566.25. The number of units that would need to be sold on a monthly basis is $14,566.25/$50 = 292 (approximately).

8.6. Balance Sheet

Since this is new company we do not have historical balance sheets. However, we have appended the balance sheet for 1756455 Ontario Inc. We have also included an opening day balance sheet and a pro-forma balance sheet for end of year 1 and year 2. At this time information is limited and as new data gets established around this business we will be updating these balance sheets accordingly.

8.7. Income Statement

We have attached the income statements for two companies: � 1756455 Ontario Inc. � RSC Business Group Toronto

These two companies have been owned and run by the two partners separately. Profit and Loss sheets are attached in Appendix A. Although, Recruiter Network Systems is a new company with no prior financial history, we have included these statements to give you sense of our progress over the last few years.

8.8. Cash Flow

A predicted cash flow sample is provided in Appendix A. We have used June 2011, a month where the income predicted is steady. However, there is no certainty of what the payment schedule for memberships will be. We made an assumption of how the membership fees will come in. Since there is no existing income (P&L) statement for this particular business, the forecasted operational costs have been used.


9. Funding Request

9.1. Capital Requirements

We have $15,000 cash at hand and access to another $25,000 of invested liquid capital. To date no money has been invested in this business. However, there is some existing infrastructure and work that has been done previously around this concept that resulted in a BETA software system with $5,000.00 invested. The funds are required to start the business, and develop, market and sell the software. There are two items that we considered for capital requirements are:

c) Start up costs of $20,500, and d) The maximum loss incurred of $90,593.

Based on these two amounts we are requesting a $100,000 grant.

9.2. Risk/Opportunity

Risks and their Management Below we have provided the major risks we anticipate and how we plan to deal with them. Risks

� Market risks o New to the market o Not being able to obtaining customer/client base o Lack of ease of entry o Slow industry traction o Slower than expected adoption o Slow-times or recession o Slight risk of competition

� Operational risks o Slower than expected software development o The nature of software development and all the variables that contribute to

successful production � Staffing risks

o Finding the right candidates � Financial risks

o Mismanaged funds � Managerial risks

o Poor project management o Mismanagement of resources o Going off timelines

Risk management plan

The table below provides methods to mitigate the above mentioned risks: Risk Risk Management Plan New to market • Starting to introduce ourselves and what we do from day 1

to all recruiters • Using RSC Business Groups robust marketing

methodologies which have been successfully implemented for over 880 business for over 21 years.

Slow-times or recession • We are clear that even in slow times if consistent actions are


taken the results will be there as well. • We will also be setting aside a reserve fund for any future

slow periods. • We have priced the product at a competitive price to ensure

accessibility to all recruiters Slight risk of competition There is only a handful of companies offering the services we

are offering and we have developed a unique product that is combination of two separate systems.

Slower than expected software development

Extra time and funds have been allocated to alleviate this risk. We have addressed this in the Operation section of the business plan.

Finding the right candidates

We will be using RSC Business Group methodologies and Campbell Morden’s recruiting experience to deal with this risk.

Mismanaged Funds We will use RSC Business Group Financial Control Strategies™ to mitigate this risk – by adopting these practices we will be providing financial information and reports to the key-players/stake-holders at any given time.

Poor project management

Again we will be managing the project using industry trusted products such as Microsoft Project™ and also tracking sheets to manage all aspects of development of this business.

In addition to the risk mitigation action stated above, we will be implementing the following to minimize risks:

� Methods and procedures to limit liabilities � Reserve fund � Continuity of operations plan

Opportunities

This software fulfills an unmet need in the recruiter marketplace. Through this product we are providing an easily accessible (both cost and ease-of-use), unique product that is not available in the market. The opportunity for the recruiter is that he/she will be able to access information at the push of the button and provide better service to the client. Also, recruiter will be able to connect with each other, work in partnership and contribute to each other.

9.3. Exit Strategy

For our exit strategy we considered several options such as “Bleeding the company dry”, selling shares, liquidating, etc. Based on the advantages and disadvantages of each of these strategies we agreed upon having a Fair Buy/Sell Agreement. This agreement will be drawn at the time of incorporation.


10. Appendix A – Financial Information � Financial Documents included in this section are: � Start-up Budget � Financial Projections � Financial Summary with forecasted sales � Balance sheet � Income statement � Cash flow statement


11. Appendix B – Charter Documents

Company Charter (Vision and External Mission) Vision Statement Every human being has a place to live, grow, contribute, and make a difference in our integrated global culture. This culture creates a world where no one is left out. This world creates a synergy that acts as a platform for the world to work for each and every human being, thus building a better world. In this world, we live from a simple, yet powerful recognition that:

• Our thoughts, intentions and actions impact every other human being • Everyone creates and lives a life of their choosing. • Each and every human being finds their own way and place in this civilization • Everyone learns, grows, develops and contributes continuously • We live a life that matters, making a powerful, positive difference • We create and provide that which is wanted and needed in this world • Each and every human being can experience satisfaction, integrity and fulfillment in their

life and work from choice. • There is already everything present in this world for each and every human being – with

nothing missing. Each and every day, we discover, cause, live and grow inside of the values and practices that make up this world. As we actualize this world, the highest dreams and aspirations of humanity are being fulfilled. As we live our daily lives and share this perspective, we grow beyond the limitations of size, structure, form, history and past. This world lives inside of each and every one of us – and is born anew and grows each new day – and it shall always be. External Mission Recruiter Network Systems, Inc. is an IT company that makes a powerful, positive impact for recruiters in North America. We live from the intention of transforming the recruitment industry. Inside of this intent we provide a world-class online community and marketplace for recruiters. Collectively, we are a path to collaboration, cooperation, membership, friendship and monetary growth. All of those who participate shall benefit from our organization’s intent, effortlessly and decisively, experiencing constant growth and fulfillment. Through each interaction, we serve the recruitment industry in the most positive of ways.


12. Appendix C – Detailed Job Description Name: Vwodek Wojczynski Position: Global Executive Manager Version 1.0 Initialization Date: 6/1/2010 Renewal/Completion Date: 12/1/2010 This position is used to produce (Valuable output): Profitable company Company direction Trained interns & staff Company growth Functional company Clear direction for the company Clear prioritization Ideal Input: External Division Takes people from strangers – to customers – to clients Measurements are: Raw data of strangers, customers & clients (numbers & graphs) Strangers to customers ratio (strangers divided by customers per time period) Ideally 80% or higher Customers to clients ratio (customers divided by clients per time period) Fulfilment Division All of the reports from Finance Department Time period between sale date & collection of money Time period between sale date & delivery of services Number of trained people Personnel Department is producing Number of people who know about RSC Business Group Internal Division Quality ratio of delivery service Quality ratio promises fulfilled Quality ratio of procedures complied with Ratio of communications recorded New products developed Particular type of businesses and companies Certain size, form & shape Where/Whom from which input is located/built: External Division Manager Fulfilment Division Manager Internal Division Manager Processes of the position: Find out from CEO what is to be accomplished. Prioritize & delegate projects to External, Fulfilment & Internal Division Managers Train External, Fulfilment & Internal Division Managers Receive reports from External, Fulfilment & Internal Division Managers & make choices Create & send report for CEO Valuable Output: Functioning, growing, viable, profitable, effective companies and businesses The way this output adds to to the intention, viability, growth of the company: Better companies build a better world because they providing jobs, what's needed & wanted by the community.


We get referrals. We get paid meaning that we can bring in more people into the company. We can build more divisions. The way this position fits into fulfilling the company charter is: By providing leadership for the company to fulfil the charter and operate consistently with it. The company continues to exist so that it has the opportunity to fulfil the Vision and the Future History document. Where/whom to which output is sent to: The output is sent to CEO, To be determined (TBD) Measurable Statistics for the position: Revenue Future revenue Expenses Future expenses Profitability Future profitability # of staff & interns Future staff & interns Operating capacity Integrity with the Charter Need to expand Tracking Report Forms used: Weekly Report & graphs Where/To whom is this report sent: CEO – TBD Direct Senior Staff: CEO – TBD Direct Junior (If any): External Division Manager – TBD Fulfilment Division Manager – TBD Internal Division Manager – TBD

Sample Business Plan

Documents

Transcript of Sample Business Plan