social media consulting business plan

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Mr.Niranjan Mutkekar in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Mr.Niranjan Mutkekar.

Upon request, this document is to be immediately returned to the undersigned.

Niranjan Mutkekar

Signature

Niranjan Mutkekar Name (typed or printed)

12/20/2010 Date

This is a business plan. It does not imply an offering of securities.

Table of Contents

Page 1

1.0 Executive Summary ................................................................................................................ 1

1.1 Objectives ............................................................................................................................... 1

1.3 Keys to Success .................................................................................................................... 2

2.1 Company Ownership ........................................................................................................... 2

2.2 Start-up Summary ............................................................................................................... 2

Table: Start-up ......................................................................................................................... 2

3.0 Services ....................................................................................................................................... 3

4.1.1 Companies Utilization of Social Media ................................................................... 6

4.2 Target Market Segment Strategy ................................................................................... 8

4.3 Service Business Analysis ................................................................................................. 8

4.3.1 Competition and Buying Patterns ........................................................................... 9

5.1 Website Marketing Strategy ............................................................................................. 9

5.2 Development Requirements ........................................................................................... 10

6.0 Strategy and Implementation Summary........................................................................ 10

6.1 SWOT Analysis .................................................................................................................... 10

6.1.1 Strengths ...................................................................................................................... 10

6.1.2 Weaknesses .................................................................................................................. 11

6.1.3 Opportunities ............................................................................................................... 11

6.1.4 Threats ........................................................................................................................... 14

6.2 Competitive Edge ............................................................................................................... 14

6.4 Sales Strategy ..................................................................................................................... 14

6.4.1 Sales Forecast ............................................................................................................. 15

Table: Sales Forecast ....................................................................................................... 15

7.0 Management Summary ........................................................................................................ 16

7.1 Personnel Plan ..................................................................................................................... 16

8.0 Financial Plan .......................................................................................................................... 16

8.1 Start-up Funding ................................................................................................................ 16

Table: Start-up Funding ...................................................................................................... 16

8.2 Important Assumptions.................................................................................................... 17

8.3 Break-even Analysis .......................................................................................................... 17

Table: Break-even Analysis ................................................................................................ 17

8.4 Projected Profit and Loss ................................................................................................. 18

Table: Profit and Loss ........................................................................................................... 18

Table of Contents

Page 2

8.5 Projected Cash Flow .......................................................................................................... 20

Table: Cash Flow .................................................................................................................... 21

8.6 Projected Balance Sheet .................................................................................................. 22

Table: Balance Sheet ............................................................................................................ 22

8.7 Business Ratios ................................................................................................................... 22

Table: Ratios ........................................................................................................................... 22

8.8 Bibliography…………………………………………………………………………………………………….31

Social Media Consulting

Page 1

1.0 Executive Summary

Social Media Market is expanding rapidly. With collective user base of over 1 Billion it will be the dream market for any company, brand or corporation. Social Networks contains most accurate data about users from around the globe. Social ‘U’ is a Social Media marketing firm aiming for that market with the help of dedicated and hardworking individuals. Social ‘U’ plans to leverage the existing users’ data on Social Networks to map out marketing strategies for our clients. We will ensure complete satisfactory solutions to companies’ social media networking needs. Social ‘U’ aims to specialize in creating targeted Social Media marketing strategies, map their implementation plans and efficiently use the generated data for analytics and ROI measurements. Given below are our forecasted sales, growth margin and Net profit. We will achieve high level of success by molding our strategies as per clients needs.

1.1 Objectives

1. Help businesses gain market penetration through Social Media Networks. 2. Achieving 30-60% more Social Media penetration. 3. Creating a reputation as a Social Media Consulting firm by providing targeted marketing strategies. 4. Focusing on our clients needs, wants and speculating the future demands by being proactive.

1.2 Mission

Social 'U' Consulting offers development and execution of 'Social Media Strategies' for your business. Is your business lacking the well deserved brand identity? We can provide you with the solution. We specialize in only one thing, Social Media Optimization. The wave of opportunity in Social Media Marketing is hitting the shores and every business is diving in. Are you the one lagging behind? We will guide you. We will create a targeted strategic plan to increase your brand identity and marketing penetration on Social Media Networks such as


Page 2

Facebook, Twitter etc. The new era of communications and marketing has come. Let us help you profit from it.

1.3 Keys to Success

Keys to success for Social 'U':

1. Development of exceptional Social Media Strategies which will be our core competency. 2. Targeted solutions addressing your specific needs. 3. Offering low-cost solutions which will generate high-value returns in Customer satisfaction. 4. Professional handling of client information - Your information is completely confidential and secure. 5. Increasing your customer base and ROI.

2.0 Company Summary

Social ‘U’ is a Social Media Consulting firm which will provide high-level expertise for developing and execution of strategies for social media optimization.

2.1 Company Ownership

The Company, Social U, is a currently a sole proprietorship, owned by Mr. Niranjan Mutkekar. As the operations will expand the owner will consider additional business partners specifically 'Social Media Marketers and Specialists'.

2.2 Start-up Summary

For the Start up of Social 'U', after initial home based operations will kick off we will be looking for rental space in near future. Our office will be located in the commercial district of Miami. The total current expenses for start-up will be around $5,100 (Home Base). The other cash at hand should be around $1000-$1500. The start up expenses is not much as we are going to supply our own furniture, laptops etc. till the business kicks off. After that we plan to expand both the office space and headcount.

Table: Start-up

Start-up Requirements Start-up Expenses Legal $500 Rent $1,000 Computer $800 Other $1,500 Total Start-up Expenses $3,800

Start-up Assets Cash Required $1,100 Other Current Assets $100 Long-term Assets $0 Total Assets $1,200

Total Requirements $5,000


Page 3

3.0 Services

Social U will provide expert solutions for your Social Media Optimization needs. Social U will handle everything from developing the customized strategies for your business. Social ‘U’ will implement them to achieve successful result. Social ‘U’ is performance driven company and we will help you achieve competitive advantage in this developing market.

We specialize in:

1. Facebook, Twitter, Friend feed real time analytics. 2. Analyzing existing businesses and crafting social media strategies based on clients needs. 3. Setting up Long-term and Short-term goals and objectives. 4. Creating and Executing Social Media Marketing campaigns. 5. Provide real time solutions for maintaining your social media campaigns. 4.0 Market Analysis Summary

Social Media Marketing is most recent and efficient way of communication. Users are now spending more and more time online on Social Media Networks. The main contender web sites for Social Media interactions are Facebook with 500 million active users, Twitter with 175 million users), MySpace with 130 million monthly active users. A study by Virtue for Facebook posts revealed that 1500 major brands shared 1.64 million posts and received 7.56 million comments from Aug 10, 2007 till Oct 10, 2010. The companies are also increasing their share in the Social Networks by utilizing it for sending messages, coupons, receiving real time feedbacks and providing valuable customer service.


Page 4

The influence of Social Media networks is spreading like wildfire. Different age groups have differentiated themselves for the usage of social media networks. For ages 25 and above, Social networks are medium to connect with old friends, colleagues and relatives. Place where people can stay in contact with family and friends. While younger generation is vibrant on social media sites, for them it is a medium to manage their complex social lives. With so many users, there 'likes' of fan pages and ‘followings’ of the brands one can imagine the amount of direct user related data which is available through social networking sites. The major core of Social Media marketing is based on utilizing the existing data (number of followers, there conversations and comments) available for various companies, activities and brands. This core data can be used to target the existing customers and also to attract more new customers by plotting and executing definitive strategies. The theme behind social media marketing is simple "Create, Converse and Utilize".

Social 'U' will be a forerunner in making existing as well as new coming brands more interactive and visible on the social media scene. Each company is different and their interaction with the customers will provide varied results. Thus, Social 'U' will engage in extensive research about the company and brand. Dedicate quality time to listen to customers and employees, and craft value adding strategies which will range from pushing the exact content users need to start social interaction and measure their feedbacks. The most important part will be utilization of information gathered wisely to generate quality content. The social engagement will result in more number of followers of the company/brand and create a specific social brand image in customers mind.

See below the Marketing compass created by Social Media Guru Brian Solis.


Page 5


Page 6

Social 'U' will define measurable goals and objectives which will focus exactly on what customers want to generate more traffic for their site. The social media networks will be used as enticers through pushing of quality data (new collections, items, coupons, sales, feedback on products etc) through which customers will be lead to the actual e-commerce web sites, blogs or brick and mortar stores. Social 'U' will always look for newer techniques and non conventional marketing strategies based on current market trends and implement them on Social Media sites.

4.1 Market Segmentation

Social Media market is huge with Facebook (500 million active users) and Twitter (175 million active users) leading the pack. In order to access the current customers and potential customers all the business to consumers companies will use our facilities. The companies can be differentiated based on the industry they are in and the company size. Our market can also be divided by types of products and services. But our main target market will be small business to customer companies which will use Social Media channels to better connect to their customers. The need for this interaction is mutual. With the social media channels in place, a company can push quality content to the consumers directly. This includes saving money on existing marketing practices utilized by companies for example: printing of large amount of coupons which people receive through their regular mails. By utilizing the targeted coupons and other promotional offers for consumers, companies can bring in more customers and cut down on their costs. Also a communication channel can be established in real time with the customers to measure their feedbacks, provide customer support and generate more followers.

4.1.1 Companies Utilization of Social Media

This is the infographic for how companies are utilizing the social media:


Page 7


Page 8

4.2 Target Market Segment Strategy

The main target market for Social 'U' will be local small businesses. They will be able to generate more followers and attract more customers through utilization of Social Media Marketing channels. This will enable them to increase their customer interactions and they can provide more products/services based on customers likes, wants and demands.

4.3 Service Business Analysis

The business of Social Media Marketing is split between large number of small and medium size consulting firms. Also every other large organization or company have their own marketing managers working on Social Media campaigns. But as this is a relatively new field there is large untouched market space. This mainly includes the small-medium size businesses which are still unaware of social media communication channels or which haven’t started using them for their businesses. As they will become aware of the Social Media Marketing and its direct impact on growth of businesses they will need help from consulting firms like Social 'U'. Social 'U' will compete against many social media marketing firms locally and nationally. The success of Social 'U' depends on successful content generation, marketing strategy development and execution for our customers and through increasing the number of followers on Facebook, Twitter and other social media web sites. See the below infographic to visualize the existing situation of marketers using Social Media:


Page 9

4.3.1 Competition and Buying Patterns

The major factor for our customers to utilize services with Social 'U' will depend upon success of our strategies. As we will gather experience, we will gather more followers and earn professional reputation.

5.0 Web Plan Summary

At Social 'U' we assess your needs for optimizing your social networking needs. Once we establish the needs we develop strategies around them and start addressing their engagement and deployment.

5.1 Website Marketing Strategy

Our website will feature our current clients. It will also include our social profiles and a running blog which will contain our discussions and communications. We will also create a map of activities which we are currently involved in so that current as well as future clients will understand extent of our work and various aspects of social media which we engage in.


Page 10

5.2 Development Requirements

The Social 'U' website will be developed along with our social networking profiles. It will be deployed in stages with first deployment anticipated month of Feb 2011. Our website will be developed in Flash and will be simple yet informative. The website logos, graphics and social engagement widgets of web sites such as (@Twitter, @Facebook, @Wordpress) will be mentioned on all the pages so that we get mass coverage. We will also include our running blog and features such as comments (provided via @disqus) and likes (provided via @facebook). The website currently will be maintained by Mr. Niranjan Mutkekar but in future the responsibility will be given to IT/Social Media person. The website will also contain our contact information in addition we are going to create a unique link so that our future clients can create projects in real time for our assessment. We project that we will be ready with full fledged website in July 2011.

6.0 Strategy and Implementation Summary

The Strategy and Implementation summary is as described below.

6.1 SWOT Analysis

Social 'U' is very strong on factors such as resources, talent etc. The growth of Social Media Networks is fast and Social 'U' is well prepared to help local businesses to utilize these networks. The strengths of Social 'U' include highly competitive work environment, Professional and multi-talented workforce, Out of Box thinking approach and high level of understanding of the Social Networks, their design and features.

6.1.1 Strengths

• High level understanding of Social Media Networks and their effective usage. Social 'U' will demonstrate a high level of knowledge about Social Networks. This will be done through the use of interactive media channels. This demonstration will be done for both marketing of the company and building strong professional reputation. The live examples without the specific details about our projects will be made available on our website. Social 'U' is highly capable of using the analytical and measurement tools for Social Media networks.

• High proficiency in drafting objective paths using existing Social Media frameworks. Social Media networks provide a basic framework for all the businesses to set up their presence on them. For example: Facebook has Company Pages which anyone can join or Fan pages for allowing users to be Fans of Brands social profile pages. Data can be pushed to all the fans/members of the community on Facebook. Twitter account can be opened and should be gotten verified (if possible) by Twitter. Twitter has its own analytical tool which gives details about followers/following relation, who is favorite follower etc. You Tube also has similar analytical tool which measures the number of hits over the period, which country it got most hits from and also the age group of the audience. Social 'U' is highly proficient in using these basic tools as well as expert tools provided by oneforty.com or Hoot suit.

• Effective problem solving approach with focus on detail. Social 'U' will map the basic requirement of using the Social Media by getting detailed knowledge from each of our clients. And then clearly identify the objectives to be set for the


Page 11

Social Media Networks. Once set the goals and objectives can be assessed through analytical tools which will measure the ROI for our clients on the basis of More followers, new customers, emotional attachment to the company, monitory gains etc.

• Exceptional sense for Strategic and Logical analysis of problem. Social 'U' employs best methods available for solving your Social Media problems. Most of the campaigns will be drafted after considering all the input and output conditions. We will provide Strong educational and professional employee backgrounds to answer your problems.

• Focus on customer needs and translating them into clear goals. Customers are everything for us. Social 'U' will work around customers’ time schedules and will put in extra hours to do the right job and achieve the high satisfaction scale with our customers.

6.1.2 Weaknesses

• Fast paced Social Media environment. Social Media Networking revolves around Facebook, Twitter, MySpace, Blogs and You Tube. There are varied numbers of tools or widgets which can be applied to these networks so that hits on particular page can be analyzed and assessed. Every day more of such applications load out in market making it questionable as to which particular application to be used and which will give the best results.

• Rapid change in technology and accessories. The technology change is immense. The social space is fast changing and to keep up with it will require hard work. Social 'U' should be up to date on the technology front as the products in technology have small life cycles and huge number of new products gets introduced on daily basis.

• Vast number of resources for analysis. According to SocialWiki there are more than 160 registered tools are available for social media analysis.

• Relatively new firm. Social 'U' is just setting off the ground. Thus initially it will be problematic for it to attract customers based on only the reputation. But Social 'U' believes to work hard to achieve the reputation desired to support bigger clients. We will be loyal to our old customers but at the same time will develop reputation to attract high end customers.

6.1.3 Opportunities

• Everyday growing population of Social Media users. Every day around 300,000 new accounts are added to Twitter while around 175 million people log to use it. The sheer number of people on Social Networks creates that much amount of data related to their tastes, preferences and activities. This is a great opportunity for companies whose products people use on regular basis to understand customers’ wants and needs. At the same time engage in a real time conversations which will help companies enhance their products and services.

• People providing data by their own this can be effectively utilized. People provide their own data, likes, preferences, activities etc. Real time conversations can be started which will give insight of customers’ mindsets for choosing a particular


Page 12

products/service.

• Social Media networks are very less cost high return investments. The basic network frame is all present- People, Networks and Groups. It’s very cost effective to set up a Social Media profile. And upon creating awareness, development of interests and engagement with customers on these networks the generated data can be utilized in many ways. For example : Rallying new campaigns, Testing new products/Services, Real time customer service etc.

• Still an emerging market so large chunk of untapped population. Even though Facebook boasts around 500 million users, majority of small/medium business units are either unaware or if aware don't know how to use these vast networks for their own use. Social 'U' is eyeing that market where old players want to jump SMOs (Social Media Optimization). And sooner or later every business has to get on the Social Media Marketing bandwagon.

• Following Infographic provides information about Increase in Social Media Ad spending.


Page 13


Page 14

Infographic created by Social media group ‘Flowtown’

6.1.4 Threats

• Still poor penetration of Social Media understanding. Social Media penetration is still poor especially in third world countries. And as most businesses boasts national & international customers it can be seen as a threat for newer companies who want to join in for Social Media Optimization.

• Old businesses which are egoistic and don't want embrace the changes. Many businesses are still being run old style. They have their tough bureaucratic systems in place which are tough to change.

• New opportunities but with added risk factors. Social Media is a two faced dagger. News is spread like wildfire on social media thus one has to be very careful about the content they provide and should be able to anticipate their followers’ perceptions. Bad publicity can be very bad for a company.

• Emergence of many small-medium firms providing similar services. Thus making it highly competitive market. Market entry is medium/easy thus there are many players who are actively engaging in Social Media Campaigns and marketing themselves as better company for SMO (Social Media Optimization). Many of these severely lack in quality and necessary skills which can harm the reputation of the Social Media Marketing scene.

• Social Media Networks also have many adverse effects if not used wisely.

6.2 Competitive Edge

Social 'U' has created a vision for its future. The first phase will involve increasing company’s social network presence. We have till now distributed quality content regarding Social Media technology and future. We have armed ourselves with analytics and ROI measurements of social networks. Our competitive edge is our strong background experience in Marketing, IT consulting and Customer service. We are channeling all our experience to build up a professional social media profiles. Our approach to the customers’ social media will be unique. We are detailed oriented and will not formulate any strategies unless we have all the information of customers wants and needs. We will speculate our clients’ future demands. We will handle maximum of 5 customers at a time thus giving our complete focus.

6.3 Marketing Strategy

The following sections describe marketing strategies for Social 'U'.

6.4 Sales Strategy

Our main sales strategy will have one agenda - 'Communication'. Through our Social Media profiles, blogs and our website the current and future followers will be constantly informed about our work. The sales will be by undertaking consulting projects. To achieve maximum efficiency and focus on customers we will handle 5 customers at a time.


Page 15

6.4.1 Sales Forecast

The sales forecast is based on our fee structure for per hour of our consulting services which are:

We are going to charge Twitter and Facebook marketing (Only writing Marketing plans) - $150 per hour. Analytics of Existing Twitter and Facebook accounts - $100 per hour.

The details of the sale forecast are as described in above table.

Table: Sales Forecast

Sales Forecast FY 2011 FY 2012 FY 2013 Sales Twitter and Facebook Marketing $17,214 $26,000 $40,000 Twitter and Facebook analytics $13,605 $20,000 $25,000 Total Sales $30,819 $46,000 $65,000

Direct Cost of Sales FY 2011 FY 2012 FY 2013 New Clients of Social 'U' $6,409 $8,000 $10,000 Maintaining existing clients Social Media profiles $4,273 $5,000 $6,000 Subtotal Direct Cost of Sales $10,682 $13,000 $16,000


Page 16

7.0 Management Summary

The initial Management team will be Mr. Niranjan Mutkekar and some prospective members. We will be adding additional team players and team leaders as we expand. The initial marketing will be dominantly through social media channels. Following infographic shows how we are going to handle social media on various levels:

7.1 Personnel Plan

As stated in management summary the work will be undertaken by Mr. Niranjan Mutkekar and some other interested members.

8.0 Financial Plan

Social 'U' being a consulting company, does not carry any tangible product inventory. All the expenses/sales will be on debit/credit basis.

8.1 Start-up Funding

The costing is explained in above table. As it’s a start-up firm we are still in the initial phases of acquiring additional investments.

Table: Start-up Funding

Start-up Funding Start-up Expenses to Fund $3,800 Start-up Assets to Fund $1,200 Total Funding Required $5,000

Assets Non-cash Assets from Start-up $100 Cash Requirements from Start-up $1,100 Additional Cash Raised $0


Page 17

Cash Balance on Starting Date $1,100 Total Assets $1,200

Liabilities and Capital Liabilities Current Borrowing $1,000 Long-term Liabilities $1,000 Accounts Payable (Outstanding Bills) $500 Other Current Liabilities (interest-free) $0 Total Liabilities $2,500

Capital Planned Investment Owner $0 Investor $0 Additional Investment Requirement $2,500 Total Planned Investment $2,500

Loss at Start-up (Start-up Expenses) ($3,800) Total Capital ($1,300)

Total Capital and Liabilities $1,200

Total Funding $5,000

8.2 Important Assumptions

We assume the Social marketing scene is going to grow rapidly and by 2015 around 80% of the companies will use social media marketing.

8.3 Break-even Analysis

Table: Break-even Analysis

Break-even Analysis Monthly Revenue Break-even $1,190

Assumptions: Average Percent Variable Cost 35% Estimated Monthly Fixed Cost $778


Page 18

8.4 Projected Profit and Loss

The below mentioned Profit Loss table is a rough draft. The rent and other additional expenses are shown to be zero as we will be operating from our individual houses till we find a place to rent. The first year estimated profits will be $15000 approximately but can increase and decrease depending upon the external factors. The table will be updated regularly as the information will flow in.

Table: Profit and Loss

Pro Forma Profit and Loss FY 2011 FY 2012 FY 2013 Sales $30,819 $46,000 $65,000 Direct Cost of Sales $10,682 $13,000 $16,000 Other Costs of Sales $4,273 $7,000 $12,000 Total Cost of Sales $14,955 $20,000 $28,000

Gross Margin $15,864 $26,000 $37,000 Gross Margin % 51.48% 56.52% 56.92%

Expenses Payroll $0 $0 $0 Marketing/Promotion $3,211 $5,000 $7,000 Depreciation $2,143 $3,500 $5,000 Payroll Taxes $2,901 $0 $0 Other $1,077 $0 $0

Total Operating Expenses $9,332 $8,500 $12,000

Profit Before Interest and Taxes $6,532 $17,500 $25,000 EBITDA $8,675 $21,000 $30,000 Interest Expense $450 $610 $960 Taxes Incurred $1,825 $5,067 $7,212

Net Profit $4,258 $11,823 $16,828 Net Profit/Sales 13.82% 25.70% 25.89%


Page 19


Page 20

8.5 Projected Cash Flow

The cash flow projections show that provisions for ongoing expenses are inadequate and will need to raise some more capital investment. But as the seed capital is made available the project will start generating revenues.


Page 21

Table: Cash Flow

Pro Forma Cash Flow FY 2011 FY 2012 FY 2013 Cash Received Cash from Operations Cash Sales $30,819 $46,000 $65,000 Subtotal Cash from Operations $30,819 $46,000 $65,000

Additional Cash Received Sales Tax, VAT, HST/GST Received $4,623 $6,900 $9,750 New Current Borrowing $2,650 $3,000 $5,000 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $2,999 $5,000 $5,000 Sales of Other Current Assets $2,143 $5,000 $6,000 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $43,234 $65,900 $90,750

Expenditures FY 2011 FY 2012 FY 2013

Expenditures from Operations Cash Spending $0 $0 $0 Bill Payments $21,796 $31,278 $42,145 Subtotal Spent on Operations $21,796 $31,278 $42,145

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $5,794 $7,000 $10,000 Principal Repayment of Current Borrowing $3,052 $5,000 $6,000 Other Liabilities Principal Repayment $3,152 $5,000 $6,000 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $2,530 $3,500 $4,000 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $36,324 $51,778 $68,145

Net Cash Flow $6,911 $14,122 $22,605 Cash Balance $8,011 $22,132 $44,738


Page 22

8.6 Projected Balance Sheet

The following table presents the balance sheet for Social 'U'.

Table: Balance Sheet

Pro Forma Balance Sheet FY 2011 FY 2012 FY 2013 Assets Current Assets Cash $8,011 $22,132 $44,738 Other Current Assets $487 ($1,013) ($3,013) Total Current Assets $8,498 $21,119 $41,725

Long-term Assets Long-term Assets $0 $0 $0 Accumulated Depreciation $2,143 $5,643 $10,643 Total Long-term Assets ($2,143) ($5,643) ($10,643) Total Assets $6,355 $15,476 $31,082

Liabilities and Capital FY 2011 FY 2012 FY 2013

Current Liabilities Accounts Payable $3,123 $2,521 $3,548 Current Borrowing $598 ($1,402) ($2,402) Other Current Liabilities ($4,323) ($9,423) ($15,673) Subtotal Current Liabilities ($602) ($8,304) ($14,527)

Long-term Liabilities $3,999 $8,999 $13,999 Total Liabilities $3,397 $695 ($528)

Paid-in Capital $2,500 $2,500 $2,500 Retained Earnings ($3,800) $458 $12,281 Earnings $4,258 $11,823 $16,828 Total Capital $2,958 $14,781 $31,609 Total Liabilities and Capital $6,355 $15,476 $31,082

Net Worth $2,958 $14,781 $31,609

8.7 Business Ratios

Business ratios are as shown in table. The industry profile ratios are based on Marketing Research/Consulting industry. We are not planning for any Long term assets currently thus we are not including them for second and third year.

Table: Ratios

Ratio Analysis FY 2011 FY 2012 FY 2013 Industry Profile Sales Growth 0.00% 49.26% 41.30% 11.29%

Percent of Total Assets Other Current Assets 7.66% -6.55% -9.69% 53.41% Total Current Assets 133.72% 136.46% 134.24% 74.67% Long-term Assets -33.72% -36.46% -34.24% 25.33% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities -9.48% -53.65% -46.74% 36.27%


Page 23

Long-term Liabilities 62.93% 58.15% 45.04% 17.17% Total Liabilities 53.45% 4.49% -1.70% 53.44% Net Worth 46.55% 95.51% 101.70% 46.56%

Percent of Sales Sales 100.00% 100.00% 100.00% 100.00% Gross Margin 51.48% 56.52% 56.92% 100.00% Selling, General & Administrative Expenses 37.66% 30.82% 31.03% 78.96% Advertising Expenses 10.42% 10.87% 10.77% 1.04% Profit Before Interest and Taxes 21.20% 38.04% 38.46% 3.23%

Main Ratios Current -14.11 -2.54 -2.87 1.46 Quick -14.11 -2.54 -2.87 1.19 Total Debt to Total Assets 53.45% 4.49% -1.70% 61.14% Pre-tax Return on Net Worth 205.64% 114.27% 76.05% 24.85% Pre-tax Return on Assets 95.72% 109.14% 77.35% 9.66%

Additional Ratios FY 2011 FY 2012 FY 2013 Net Profit Margin 13.82% 25.70% 25.89% n.a Return on Equity 143.95% 79.99% 53.24% n.a

Activity Ratios Accounts Payable Turnover 7.82 12.17 12.17 n.a Payment Days 28 34 26 n.a Total Asset Turnover 4.85 2.97 2.09 n.a

Debt Ratios Debt to Net Worth 1.15 0.05 -0.02 n.a Current Liab. to Liab. -0.18 -11.94 0.00 n.a

Liquidity Ratios Net Working Capital $9,100 $29,423 $56,251 n.a Interest Coverage 14.53 28.70 26.05 n.a

Additional Ratios Assets to Sales 0.21 0.34 0.48 n.a Current Debt/Total Assets -9% -54% -47% n.a Acid Test 0.00 0.00 0.00 n.a Sales/Net Worth 10.42 3.11 2.06 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Page 1

Table: Profit and Loss

Pro Forma Profit and Loss Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Sales $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889 Direct Cost of Sales $500 $550 $605 $665 $732 $805 $885 $973 $1,070 $1,177 $1,295 $1,425 Other Costs of Sales $200 $220 $242 $266 $293 $322 $354 $389 $428 $471 $518 $570 Total Cost of Sales $700 $770 $847 $931 $1,025 $1,127 $1,239 $1,362 $1,498 $1,648 $1,813 $1,995

Gross Margin ($700) $130 $653 $1,240 $1,654 $1,759 $1,872 $1,762 $1,872 $1,843 $1,885 $1,894 Gross Margin % 0.00% 14.44% 43.53% 57.12% 61.74% 60.95% 60.17% 56.40% 55.55% 52.80% 50.97% 48.70%

Expenses Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Marketing/Promotion $150 $165 $182 $200 $220 $242 $266 $293 $322 $354 $389 $428 Depreciation $100 $110 $121 $133 $146 $161 $177 $195 $215 $237 $261 $287 Payroll Taxes 15% $100 $115 $132 $152 $175 $201 $231 $266 $306 $352 $405 $466 Other $50 $55 $61 $67 $74 $81 $89 $98 $108 $119 $131 $144

Total Operating Expenses $400 $445 $496 $552 $615 $685 $763 $852 $951 $1,062 $1,186 $1,325

Profit Before Interest and Taxes ($1,100) ($315) $157 $688 $1,039 $1,074 $1,109 $910 $921 $781 $699 $569 EBITDA ($1,000) ($205) $278 $821 $1,185 $1,235 $1,286 $1,105 $1,136 $1,018 $960 $856 Interest Expense $26 $31 $35 $38 $40 $40 $40 $42 $41 $40 $38 $38 Taxes Incurred ($338) ($104) $37 $195 $300 $310 $321 $260 $264 $222 $198 $159

Net Profit ($788) ($242) $86 $455 $699 $724 $748 $608 $616 $519 $462 $371 Net Profit/Sales 0.00% -26.89% 5.71% 20.96% 26.09% 25.09% 24.04% 19.45% 18.28% 14.87% 12.50% 9.55%

Appendix

Page 2

Table: Cash Flow

Pro Forma Cash Flow Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Cash Received Cash from Operations Cash Sales $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889 Subtotal Cash from Operations $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889

Additional Cash Received Sales Tax, VAT, HST/GST Received 15.00% $0 $135 $225 $326 $402 $433 $467 $469 $506 $524 $555 $583 New Current Borrowing $1,000 $400 $300 $200 $100 $0 $200 $300 $0 $0 $0 $150 New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Long-term Liabilities $140 $154 $169 $186 $205 $226 $249 $274 $301 $331 $364 $400 Sales of Other Current Assets $100 $110 $121 $133 $146 $161 $177 $195 $215 $237 $261 $287 Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $1,240 $1,699 $2,315 $3,016 $3,532 $3,706 $4,204 $4,362 $4,392 $4,583 $4,878 $5,309

Expenditures Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Expenditures from Operations Cash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Bill Payments $523 $700 $1,041 $1,303 $1,591 $1,840 $2,007 $2,191 $2,329 $2,545 $2,743 $2,983 Subtotal Spent on Operations $523 $700 $1,041 $1,303 $1,591 $1,840 $2,007 $2,191 $2,329 $2,545 $2,743 $2,983

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $200 $230 $264 $304 $350 $402 $462 $531 $611 $703 $808 $929 Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $322 $354 $389 $428 $471 $518 $570 Other Liabilities Principal Repayment $0 $0 $0 $0 $100 $322 $354 $389 $428 $471 $518 $570 Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Purchase Other Current Assets $400 $500 $100 $0 $200 $0 $500 $600 $50 $50 $50 $80 Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent $1,123 $1,430 $1,405 $1,607 $2,241 $2,886 $3,677 $4,100 $3,846 $4,240 $4,637 $5,132

Net Cash Flow $117 $269 $910 $1,409 $1,291 $820 $527 $262 $546 $343 $240 $177

Appendix

Page 3

Cash Balance $1,217 $1,486 $2,397 $3,805 $5,096 $5,916 $6,443 $6,705 $7,250 $7,593 $7,833 $8,011 Table: Balance Sheet

Pro Forma Balance Sheet Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Assets Starting Balances Current Assets Cash $1,100 $1,217 $1,486 $2,397 $3,805 $5,096 $5,916 $6,443 $6,705 $7,250 $7,593 $7,833 $8,011 Other Current Assets $100 $400 $790 $769 $636 $690 $529 $852 $1,257 $1,092 $905 $694 $487 Total Current Assets $1,200 $1,617 $2,276 $3,166 $4,441 $5,786 $6,445 $7,295 $7,962 $8,342 $8,498 $8,527 $8,498

Long-term Assets Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Accumulated Depreciation $0 $100 $210 $331 $464 $610 $771 $948 $1,143 $1,358 $1,595 $1,856 $2,143 Total Long-term Assets $0 ($100) ($210) ($331) ($464) ($610) ($771) ($948) ($1,143) ($1,358) ($1,595) ($1,856) ($2,143) Total Assets $1,200 $1,517 $2,066 $2,835 $3,977 $5,176 $5,674 $6,347 $6,819 $6,984 $6,903 $6,671 $6,355

Liabilities and Capital Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Current Liabilities Accounts Payable $500 $665 $998 $1,250 $1,530 $1,773 $1,934 $2,113 $2,244 $2,454 $2,644 $2,875 $3,123 Current Borrowing $1,000 $2,000 $2,400 $2,700 $2,900 $3,000 $2,678 $2,524 $2,435 $2,007 $1,536 $1,018 $598 Other Current Liabilities $0 ($200) ($295) ($334) ($312) ($361) ($652) ($1,001) ($1,452) ($1,986) ($2,636) ($3,407) ($4,323) Subtotal Current Liabilities $1,500 $2,465 $3,103 $3,616 $4,118 $4,412 $3,961 $3,636 $3,227 $2,475 $1,544 $486 ($602)

Long-term Liabilities $1,000 $1,140 $1,294 $1,463 $1,649 $1,854 $2,080 $2,329 $2,603 $2,904 $3,235 $3,599 $3,999 Total Liabilities $2,500 $3,605 $4,397 $5,079 $5,767 $6,266 $6,041 $5,965 $5,830 $5,379 $4,779 $4,085 $3,397

Paid-in Capital $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 Retained Earnings ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) Earnings $0 ($788) ($1,030) ($945) ($490) $209 $933 $1,681 $2,289 $2,905 $3,424 $3,886 $4,258 Total Capital ($1,300) ($2,088) ($2,330) ($2,245) ($1,790) ($1,091) ($367) $381 $989 $1,605 $2,124 $2,586 $2,958 Total Liabilities and Capital $1,200 $1,517 $2,066 $2,835 $3,977 $5,176 $5,674 $6,347 $6,819 $6,984 $6,903 $6,671 $6,355

Net Worth ($1,300) ($2,088) ($2,330) ($2,245) ($1,790) ($1,091) ($367) $381 $989 $1,605 $2,124 $2,586 $2,958

Appendix

Page 4

8.8 Bibliography

1. Ira, G. (n.d.). 50 Ways to Measure Success in Social Media | Kyle Lacy, Social Media - Indianapolis. Kyle Lacy's Thoughts on Social Media Productivity, Innovation, and Marketing. Retrieved December 7, 2010, from http://kylelacy.com/50-ways-to-measure-success-in-social-media/

2. Kessler, S. (n.d.). 6 Essential Steps for Executing Your Social Media Strategy. Social Media News and Web Tips – Mashable – The Social Media Guide. Retrieved December 7, 2010, from http://mashable.com/2010/11/30/social-media-execution/

3. Kotadia, H. (n.d.). 3 Reasons why you should provide Customer Support on Social Media | Social... - StumbleUpon.StumbleUpon.com: Personalized Recommendations to Help You Discover the Best of the Web. Retrieved December 7, 2010, from http://www.stumbleupon.com/su/1cWGlZ/socialmediatoday.com/hkotadia/236851/3-reasons-why-you-should-provide-customer-support-social-media/

4. Naslund, A. (n.d.). The Social Media Measurement Paradox « Social Media Monitoring and Engagement – Radian6. Social Media Monitoring and Engagement – Radian6. Retrieved December 7, 2010, from http://www.radian6.com/blog/2010/11/the-social-media-measurement-paradox/

5. TechCrunch.com. (n.d.). Social Networking: The Future .TechCrunch . Retrieved December 7, 2010, from http://techcrunch.com/2010/12/05/social-networking-future/

http://techcrunch.com/2010/12/05/social-networking-future/

social media consulting business plan

Documents