SME Consulting

BUSINESS PLAN “Question & Improve” www.smeconsulting.co.nz

THE BUSINESS PLAN “The act of planning This business plan consists The real value of creating a business of a narrative and several plan is not in having the finished helps you to think financial worksheets. The product in hand; rather, the value narrative template is the lies in the process of researching things through body of the business plan. and thinking about your business thoroughly” It contains more than 150 in a systematic way. The act of questions divided into several planning helps you to think things sections. This business plan through thoroughly, study and although completed for the research if you are not sure of SME Consulting strategic the facts, and look at your ideas planning project, is also critically. It takes time now, but an important resource for avoids costly, perhaps disastrous, operating a consultancy mistakes later. such as SME. This therefore This business plan is a generic is also a template on which model suitable for all types of you may rely on, to define businesses. However, you should your client’s business model, modify it to suit the particular or re-aligning their strategy circumstances. Before you begin, to reflect their customer’s review the section titled Refining expectations. the Plan, found at the end. It To use this Business plan as a draft suggests emphasizing certain for your future you should skip any areas depending upon the type of questions that do not apply to your business (manufacturing, retail, client’s type of business. When service, etc.). It also has tips for you are finished writing your first fine-tuning the plan to make an draft, you’ll have a collection of effective presentation to investors small essays on the various topics or bankers. If this is why you’re of the business plan. Then you’ll creating the plan, pay particular want to edit them into a smooth- attention to the writing style. It flowing narrative using the template will be judged by the quality and provided on your “SME Consulting appearance of the work as well as brand resource DVD”. by the ideas behind it.

BUSINESS PLAN TABLE OF CONTENTS EXECUTIVE SUMMARY 4 GENERAL COMPANY DESCRIPTION 6 PRODUCTS AND SERVICES 8 MARKETING PLAN 10 Economics 1 Products and Services 14 Competition 14 Competitive Analysis 16 Niche 17 Strategy 18 Pricing 0 Distribution Channels 1 OPERATIONAL PLAN Legal Environment Personal Suppliers Credit Policies Managing Your Accounts Recievable 4 MANAGEMENT AND ORGANIZATION 5 PERSONAL FINANCIAL STATEMENT 7 START-UP EXPENSES AND CAPITALIZATION 7 FINANCIAL PLAN 8 RESOURCES 0 REFINING THE PLAN 1

EXECUTIVE SUMMARY “Strategically generic SME Consulting is a ready and secondary cities. Research has to run branded complete shown good interest in locations in nature, SME consultancy. within the Wairarapa, Kapiti Coast, Palmerston & Horowenua regions. Consulting has been It was established to be a packaged It is therefore to be assumed that brand company, meaning that the designed in a way initial hard work of developing a this business model and brand could easily be developed into a licensed to enable it to be brand and completing the required national company or as a locally run pre-entry market research has consultancy anywhere in the more developed to the already largely been completed. suburban/rural parts of the country. next preferred level Strategically generic in nature, SME Generally, when developing a Consulting has been designed in a market you find that you have to with ease” way to enable it to be developed re-educate your actual market to the next preferred level with targets to your ideas and methods. ease. All forms of media have been To do this in the geographical areas carefully developed by professional defined by our research, face to graphic designers to ensure a face cold calling is required to professional and modern brand. achieve the essential networking The resources included have needed. As any experienced sales been developed by experienced rep will tell you, the first impression Investment Bankers and Sales/ is the last impression. Therefore Marketing Consultants, whilst where most consultancies go wrong carefully packaged inline with are that they believe you have to the brand by experienced Brand have a good client network before Consultants. good, brand awareness, and this assumption is totally incorrect. The market is currently well developed for consulting services A complete modern and essentially within metropolitan areas. This fact relative brand is the key to these leaves the more rural and suburban initial contacts. SME Consulting market wide open to be targeted therefore provides that professional with few suppliers to the market and vision and focus to gain that crucial growing demand as urban property first time impression. Although prices force more and more small the brand is free to be developed to medium businesses to move in which ever way the operator out to the more rural townships chooses, many key resources 4

BUSINESS PLAN have been provided and designed to compliment the brand keeping inline with the concept by utilising the logo and colour schemes and specially designed templates. In brief, a well designed and ready to run consultancy free to be developed into which ever niche market the operator chooses. Below are some examples of market niches that fit into the brand: • Brand Development • Process Improvement • Coaching/Mentoring www.smeconsulting.co.nz • Financial Planning • Strategic Marketing • Business Finance Broking • IT Consulting • Web Development • Accounting Economically we are now entering a cycle in which small business finance and consulting will become essential with the rising cost of money, as interest rates are steadily increasing on a global scale. Due to this, now is the time to establish a professionally trusted brand to reap the rewards in the near future as the market moves through this phase of the macro-economic cycle. 5

GENERAL COMPANY DESCRIPTION SME Consulting is a In a recent research on the saves the entrepreneur time and suitable investment for aspirations of today’s teenage therefore money, but also by having any of the following populace, the question was posed the brand professionally designed experienced professionals of “what do you want to do for and pre-packaged by several facets looking to start their own work when you leave school?” in of the business consultancy areas business: results of over 70%, the test group this entrepreneur will be able to answered that they wished to own leave a lasting impression of quality Sales & Marketing Executive their own small business and work professional service during the Accountant from home. The reality is that a initial client contact. large portion may at some stage of Banker Mission Statement: their lives actually attempt this, but SME Consulting’s mission is to Entrepreneur with odds of 1:9 of them actually provide a cost effective way to build managing to survive the first year Business Analysts a brand whilst reducing the time of trading, very few will actually frame of setting up a business to IT Professional succeed. virtually zero. Six Sigma Qualified Many of those failed start-ups did not portray the true essence of the Company Goals and Objectives: Importers & Exporters firm’s mission through a correct SME Consulting’s goal is very simply branding strategy. Branding is a to be a ready branded package for a Web Developer crucial part of starting a company. budding entrepreneur, whose skills Human Resources Manager It’s what defines the character, the lay outside of building a brand. This nature of what you are trying to gives the entrepreneur time to focus Finance Broker achieve and how you are trying to on building his or her client network Commercial Lawyer achieve it. Whether that is through from the outset with virtually no a conservative colour scheme and distractions from building the discrete logo, for say a consultancy marketing side. SME being a or a stylish and modern one to very generic brand was carefully portray an upmarket hotel chain. designed to be exactly that, generic. Giving the operator freedom to add Therefore this research has now their own fine touches or to perhaps proven the need for ready branded to even refine it in line with their company set-ups, for those types particular skill sets. of people looking to move on from their 9-5 bank jobs in the city for Business Philosophy: In business example. Having a ready packaged trust from the outset is what brand from the outset not only makes or breaks a consultancy. A 6

BUSINESS PLAN professional brand gives that air of out on their own who can provide FASTEST GROWING quality service and professionalism niche skills such as sales, process, BUSINESS DISTRICTS to build lasting relationships from marketing, website development that crucial first contact. and many more aspects of managing a successful company. The market research carried Most small businesses cannot afford out has shown that currently to employ experienced staff in only non-metropolitan areas are one role of their firm, commonly QUEENSTOWN-LAKES underserviced by business referred to as multi tasking, most consultants in nearly all facets. The median age of people in the employees are required to cover Queenstown-Lakes District is 34.5, several positions and responsibilities With rising competition, and the compared with 4.8 for all of New within their day to day employment. cost of borrowing, refining business Zealand. This creates a sense of “Jack of all practices will be crucial to the future trades, but master of none” which of the small business market for the The most common language after is not beneficial to the operation’s foreseeable future. As prices rise English in the Queenstown-Lakes long term growth prospects. in the cities, more and more of the District is Japanese, spoken by SME Consulting is therefore a operations will relocate to the more .7% of people. For New Zealand professional brand for someone suburban areas and rural centres. as a whole, the most common looking to exploit this skill shortage Adding in the existing market language after English is Mäori as a form of outsourcing. in these locations, makes it a (4.5%). sufficient economy of scale for small All Resources have been developed ,688 households or 44.1% in the consultancies who manage to keep by experienced professionals within Queenstown-Lakes District have their overheads low and therefore the following fields: access to the Internet, compared their pricing inline with demand. Finance, Banking, Service, Graphic with 7.4% for all of New Zealand. Design, Website Development The strength of SME Consulting as Queenstown is New Zealand’s a brand is not only in the modern Legal form of ownership: Currently fastest growing city. aesthetics of the marketing material a sole trader operation, this has (Website, Logo etc), but also in the been the easiest form of operation, Abundance of SME’s, mainly based material provided. Although the although it is recommended that a in the tourism sector. material is not the business itself, company formation be completed. that is the operators abilities in a By leaving it as a sole trader field of business. Therefore SME enables the brand to be sold with Consulting is a fantastic opportunity no legal or financial obligations for an experienced business pending. professional looking to branch 7

PRODUCTS AND SERVICES SME Consulting has found to freelancers as they no longer have “...the brand itself date, that the geographical areas to deal with the client relationship is generic enough targeted as test cases, were very portion of the project. So not only responsive to web development can the freelancer design quicker, to be adapted to and re-branding projects. Using but SME Consulting is able to feed relationships with Graphic Designers the pipeline more business as they any professional and a Website Developer, this have more time to focus on sales expertise with area is to be considered a highly and service. This also has a major profitable and productive avenue impact on client satisfaction. complete ease...” to be explored . The business model used was that as a sales With all the benefits of the above, and service outsourcing agent for it’s also important to understand freelance designers. Therefore by the possible issues that can arise using several of these partners SME from such a structure and in the Consulting is able to confidently event of them arising, be prepared produce several websites at a to deal with them effectively. The time due to the construction major issue is with timing. This being done externally whilst also means that with external parties having more time to focus on the working on the same project timing ‘Business to Client’ relationship is of the essence. SME Consultants more effectively. If this as to be need to be able to provide accurate completed internally rather than time frames by understanding the through external third parties exact productivity ratios for their the costs would rise dramatically partners. This would enable all due to employing several high parties to be able to accurately income specialists. As Such, there keep the pipeline full but not over are no major overheads required full as that will lead to a damaged and in fact in a tax sense there brand image of SME Consulting are even major financial benefits and not the freelancers as SME is in outsourcing the construction responsible for the contract, just of any website developments. like a project management company Another major benefit of this type operates. Pricing for this is usually of structure is that it improves a commission of between $1000 not only the productivity of the to 100% of the cost and should sales pipeline for SME Consulting, be completed within 6 weeks (i.e but also the productivity for the total cost to construct $1,500 = 8

BUSINESS PLAN total price $,000 and $1,500 exercise for the founders who FASTEST GROWING profit that’s a margin of 100%!). typically have no time to give to this BUSINESS DISTRICTS Therefore managing the sales area which is also often confusing pipeline is the key to positive cash for them. Pricing for this form of flow from this enterprise project work can be charged at $100 - $150 per hour carrying very Another great new market is the Six little overheads. Sigma process improvement area. Although there are just two MACKENZIE Although normally a large corporate profitable areas outlined above, The median age of people in management enhancement the brand itself is generic enough the Mackenzie District is 38.3, methodology, it can very easily be to be adapted to any professional compared with 4.8 for all of adapted to medium business and at expertise with complete ease and New Zealand. a very profitable rate. Most of these with no need to alter the branding types of medium businesses have The most common language after in anyway. grown rapidly and to date are to English in the Mackenzie District is be considered successful start-up’s French, spoken by 1.6% of people. and probably are trying to move For New Zealand as a whole, the from the embryonic phase into a most common language after more mature established service English is Mäori (4.5%). provider. This is a very crucial stage The most popular occupational to the long term growth prospects group in the Mackenzie District is for these firms. Most are often agriculture and fishery workers. The owned and operated on a day to most popular occupational group in day basis by the founders who due New Zealand as a whole is service to the rapid growth have a need of and sales. independent and subjective analysis to be able to move the firm into Increase in property development the next phase of growth. Usually and net migration from Europe the founder is unprepared for the leading to increasing property success of the operation, and the values and therefore property firm is starting to lose its drive services. and direction. Six sigma methods Fast becoming the new place of usually are able to point out through choice for people, looking to obtain process mapping and other tools, the typical kiwi lifestyle. the areas of process which need to District Includes the Mt. Cook area. be addressed. A time consuming 9

MARKETING PLAN ”...the venture MARKET RESEARCH MARKET RESEARCH - WHy? - HoW? cannot succeed No matter how good your product Market research has been and your service, the venture performed more on identifying without effective cannot succeed without effective the market target profile, than on marketing” marketing. And this begins with the market as whole due to the careful, systematic research. It is fact of SME Consulting trying to very dangerous to assume that you retain a generic nature for future already know about your intended development. It’s therefore difficult market. you need to do market to define an exact market as research to make sure you’re on that would be dependent on the track. operators, particular skill set. In terms of the market in general, the ideal market target has proven to have the following characteristics: • Location is suburban to rural • Staff of -10 • Established operations, possibly fallen behind competition • Brand seen as stale • Trades related business • New management • Need to diversify services offered • Location has an increasing populace from outside the area Due to the nature of the target areas, it’s important to have an ability to prospect for clients by 10

BUSINESS PLAN cold calling. Before doing this, in Start with your local library. Most FASTEST GROWING depth research should be performed librarians are pleased to guide BUSINESS DISTRICTS on the brand awareness of the you through their business data prospect and its services offered. collection. You will be amazed at More often than not, the SME what is there. There are more online Consultant finds themselves in a sources than you could possibly position of educating the prospect use. Your chamber of commerce to the options available. Due to has good information on the local CENTRAL OTAGO nonexistent consulting services area. Trade associations and trade The median age of people in the offered to these areas within New publications often have excellent Central Otago District is 4.6, Zealand, the prospects usual answer industry-specific data. compared with 4.8 for all of to a cold call is “I just don’t have Primary research means gathering New Zealand. time to think about things like your own data. For example, you 93.8% of the population in the that” which is exactly why SME could do your own traffic count at Central Otago District (1,4) Consulting is needed. To make those a proposed location, use the yellow speak only one language, compared options available without placing the pages to identify competitors, with 8.1% for New Zealand as a customer under stress. and do surveys or focus-group whole. Below are some useful marketing interviews to learn about consumer 1,740 households or 0.8% in the ideas for the eventual operator to preferences. Professional market Central Otago District have access use, there are also resources on the research can be very costly, but to the Internet, compared with DVD supplied. there are many books that show 7.4% for all of New Zealand. small business owners how to do There are two kinds of market Fastest growing wine district in effective research themselves. research: primary and secondary. New Zealand leading to rapid In your marketing plan, be as increase in tourism based services. Secondary research means specific as possible; give statistics, Highest sunshine count in using published information numbers, and sources. The New Zealand providing a unique such as industry profiles, trade marketing plan will be the basis, lifestyle “Creating industry cluster journals, newspapers, magazines, later on, of the all-important sales groups with a view to developing census data, and demographic projection. their specific capabilities, economic profiles. This type of information contribution and export potential.” is available in public libraries, Central Otago District’s Economic industry associations, chambers of Strategy opens many opportunities. commerce, from vendors who sell to your industry, and from government agencies. 11

“SME Consulting ECONOMICS looking for a change in direction Facts about the SME industry: or lifestyle, the opportunity to hit gives someone the ground running. With having Fastest growing business districts a well developed and presented looking for a with the top 10 being as at the end brand already built and designed, of financial year 2005: change in direction the operator has only to begin 1. Queenstown-Lakes 9.1% prospecting within that area with no or lifestyle, the delays due to brand creation. 2. Mackenzie 7.5% opportunity to hit Although it is also important to . Central Otago 6.8% consider that as of February 006 the ground running” 4. Selwyn 6.5% more than 75% of all businesses 5. Chatham Is. 5.8% within New Zealand were based in the North Island, 5% of them in 6. Waimakariri 5% Auckland alone. 7. Tauranga 5% • Business and Property Services 8. Ruapehu 4.7% are the largest industries in New Zealand, not Agriculture as 9. Porirua 4.6% perceived. Construction is now 10. Southland 4.5% New Zealand’s second largest. Now this may not really seem so • In 006 77% of all companies wonderful when looking at these use broadband. small percentages, but when • Large untapped markets in compared to the national average of locations offering unique 3.3% growth and Auckland at 2.7%, lifestyles. Wellington .7% and Christchurch at 4.6% its then obvious which • Barriers to market entry for locations in New Zealand are in both the operator of SME need of independent small to mid Consulting and the competitors sized business consultants. are: Business specialisation, general business acumen, Also due to their isolation, these sales experience, knowledge areas are in general harder of internet development, to attract top staff. Therefore small business networks. SME Consulting gives someone 1

BUSINESS PLAN * (These barriers are actually a • Change in your industry: The benefit to the business model, consultancy will not only be up as it restricts market entry to to date on the latest methods, those few with the true ability but will actually invent and to deliver.) create some of their own. A consultancy teaches How could the following affect improvement and creative the company? thinking, therefore they must • Change in technology: SME also follow their own teaching. Consulting was founded to identify client prospects that are behind in the latest methods and systems, therefore change is the lifeblood of the model. • Change in government regulations: At this stage TAURANGA 5% there are no plans for the government to change RUAPEHU 4.7% regulations on business consulting. All the regulations are the same for all. Regardless of type (i.e. the privacy act.) PORIRUA 4.6% • Change in the economy: Business consulting is one of the few industries that benefits from all economic cycles. Due WAIMAKARIRI 5% to the nature of the business, SELWYN 6.5% a bad economy is sometimes MACKENZIE 7.5% better than a good one. QUEENSToWN-LAKES 9.1% CENTRAL OTAGO 6.8% CHATHAM IS. 5.8% SOUTHLAND 4.5% 1

“...using the PRODUCTS & SERVICES COMPETITION Below is a table of possible services fastest growing that fit into the brand. It’s important The Small Business Consulting market is well developed within the that the eventual operator of SME business districts more metropolitan areas of New Consulting has a clear selection of Zealand. Although, as discussed as a geographical the following and the experience earlier in this piece, the small and knowledge required to deliver market guideline professionally on these services. business market maybe moving away from these currently well would allow SME Website Development entrenched consultancies due to a Graphic Design demographic shift for small business Consulting to find in general as they seek to reduce IT based sales untapped markets Financial Broking overheads and/or change of lifestyle for the owners. for whichever niche Legal Consultancy Process Improvement SME Consulting therefore is about skill set is required” taking a professional brand actually Mentoring/Coaching to the client, as outlined above Sales Outsourcing in the fastest growing business Human Resources districts. With well established Marketing consultancies in the larger cities Credit Control like Wellington and Auckland for Branding example, it is currently very difficult Client Development to set up a brand new operation due to market oversaturation in Accounting these places. So by following the Import & Export demographic shift as outlined Management Services above, it is to be assumed therefore Please see the resource DVD for that using the fastest growing material relating to some of the business districts as a geographical above. market guideline would allow SME Consulting to find untapped markets for whichever niche skill set is required. The type and therefore amount of competition the eventual operator 14

BUSINESS PLAN will have is dependent on several How will your products or services FASTEST GROWING variables such as the niche services compare with the competition? BUSINESS DISTRICTS that the operator will decide to focus To understand the strengths on. our marketing research shows and weaknesses of a business, us that currently there is large it’s important to do a quick demand for branding expertise and SWoT (Strengths, Weaknesses, web development within the target Opportunities, Threats) analysis locations as outlined in a previous to have a general overview of SELWYN chapter. This is due to reluctance of where your business or operation The median age of people in the the larger firms who are currently needs to improve. This has been Selwyn District is 5., compared embedded within in the main completed as an example only and with 4.8 for all of New Zealand. centres, to actually target the this template can also be found on 95.2% of people (25,353) in the smaller end section of the market. the ‘Resources DVD’ as this is also Selwyn District said they belong This therefore leaves potential to a very important part of assessing to the European ethnic group. For owner operators to exploit with your future client’s competitive all New Zealand 80.1% said they little to no competition in locations position if so required. belong to the European ethnic outlined previously. group. Indirect competition will also The median income of people in remain in the form of lawyers the Selwyn District is $1,000, and accountants, although their compared with $18,500 for all of consulting skills are generally New Zealand. focused on the broader horizon than 1.0% of people aged 15 years and what is necessary for the day to over in the Selwyn District have day running of a successful firm. In an annual income of more than the modern market, a full range of $50,000, compared with 11.5% for professional services are paramount New Zealand as a whole. and that has created a need to The most popular occupational have specialists in several niche group in the Selwyn District is areas such as process improvement agriculture and fishery workers. The and web development that the most popular occupational group in enterprising business consultant New Zealand as a whole is service can target effectively with very and sales. high rates of return but as always Small business growth seen mainly dependent on the operators own around the tourist trail near Arthurs skill sets as to what area of service pass & the lakes. that is. 15

TABLE 1: CoMPETITIvE ANALySIS IMPORTANCE FACTOR ME COMPETITOR A COMPETITOR B TO CUSTOMER PRODUCTS 4 PRICE 5 1 5 QUALITY 4 5 5 SERVICE 5 4 RELIABILITY 5 4 STABILITY 4 4 4 EXPERTISE 4 5 COMPANY 1 REPUTATION LOCATION 5 1 4 APPEARANCE 5 5 SALES METHOD 4 CREDIT 4 4 1 POLICIES ADVERTISING IMAGE 5 4 4 5 TOTALS 50 41 40 5 5 = very strong This assessment was based on network. The target being at all 1 = weak the current positioning of SME times, the customers expectations. Consulting. The table shows us that This is a brief overview of a having a professionally presentable business’s current brand positioning brand when working within the as compared against internal business services industry is an assumptions, competitors and the essential ingredient when trying most important being what the to establish that crucial client customer expects in return for 16

BUSINESS PLAN their money. This table is a useful within New Zealand (i.e. Invercagill) FASTEST GROWING quick insight into assessing the and start their own business, it’s BUSINESS DISTRICTS clients (and SME Consultings) actual probably logical to expect that that current brand perception from person has many skills learnt as several different angles. a Business Banking rep that could easily be applied to their own clients The SME Consulting brand therefore needs. This person therefore would gives that air of professional logically move into the business experience needed to be successful CHATHAM IS. finance consulting market. The median age of people in the Some disadvantages do remain Example 2; a Marketing executive Chatham Islands District is .8, however, as it is still apparent that within a large corporate company compared with 4.8 for all of New a lack of advertising does make in Auckland, wishes to raise their Zealand. it hard to generate leads quickly. newborn child away from the cities Therefore the eventual operator Very Sparse population and closer to their own family will need to define the best source (i.e. Central Otago)whilst having a Fishing is the main industry of marketing dependent on the more relaxed lifestyle at the same operators chosen location and field 6.7% of people aged 15 years time, would easily find that the of expertise. and over in the Chatham Islands skills learnt in the corporate world District said they have no formal which the person has probably until NICHE qualifications, compared with 27.6% now taken for granted as standard Now that we have systematically of people aged 15 years and over in business practice, are in desperate analyzed the industry, the product, New Zealand. shortage in the locations outlined as customers, and the competition, being New Zealand’s fastest growing 51 households or .% in the you should have a clearer picture of business districts. This person would Chatham Islands District have where your future consultancy can then logically look to move into the access to the Internet, compared fit into the market. branding and strategic marketing with 7.4% for all of New Zealand. The particular niche of the nice of the industry. Although there has been a slight consulting market is entirely These are just two examples of increase in tourism, there is still too dependent on the operator’s skills, how the often taken for granted or small a population (800 apx) for it experience and chosen lifestyle. overlooked skills of the operator can to be considered a viable option. Example 1; if a business banking be used to exploit the exact niche representative who currently within the market to become a very is working in one of the large successful consultant. institutional banks but wishes to perhaps return to their place of birth 17

“Development STRATEGY Internet: Currently the strongest As above, giving an exact detailed and most effect form of internet of the current marketing strategy is dependent on marketing is via Google Adwords. knowing the right niche to target. website should be Google Adsense enables the Although some marketing tips and advertiser to pay as much per done inline with ideas are as follows: month as needed (min $50) and have a link placed onto hundreds if whichever niche the Cold calling: Door to Door, calling not thousands of different websites in on small businesses within the operator targets” area. Use of the resources on which have something in common with the advertisers particular the DvD is the key to this as a market segment and products/ professional presentation is required services supplied. from the offset. It’s Important to keep the time short but effective Once the funds have been paid as the objective is to gain a first via credit card, a simple link and/ name basis with the potential client or pictorial advertisement will be and arrange a more suitable time placed on any websites that have to do a proper presentation as placed Google’s code enabling this to the services offered, how they link to be shown. This also works can benefit the client and more both ways, as by enabling the importantly… why you. Google Adsense product, the cost of Google Adwords can be negated Referrals: Establish a relationship via page impression & click through with an accountant, lawyer, graphic advertisements placed on the SME designer, business broker etc within Consulting website. your area and feed off their client Both Products only require a simple list. Leave brochures in their offices registration at no cost and are or even in the office of a local hotel highly recommended as one of the that caters to businesspeople. Use most cost effective way to advertise. a client fidelity program to keep your brand at the forefront, using Development of the current a dedicated mailing list and post website should be done inline sale follow up... remember their with whichever niche the operator birthdays! Referrals are the life targets. Resources for the clients blood of a consultant as they will should become downloadable add in future goodwill. from using a logon and password system and then a download page 18

BUSINESS PLAN with .pdf links attached so that or local school with the correct Local Newspapers: These generally the client can then obtain copies technology (projector etc). Use your are not suitable for BB (business of any material required whenever accountant, lawyer etc to obtain to business) as these are targeting they require it (possible passive potential mailing lists and names of the consumer market and therefore income opportunity i.e. charge per attendees as well as a local radio/ are suitable for BC (business to download). newspaper advertisement combined consumer). Again this is heavily with posters strategically placed dependent on the actual location to Seminars: Arrange a seminar around areas that attract small be chosen by the eventual operator. type presentation. The objective business owners like the post office Local Radio: This is in general for the seminar is to create public or local bank. a very effective way to create awareness of the SME brand, create the ‘need’ (realisation Small high street office: As the awareness of the brand. Most that the client needs to use your geographical locations identified businesses in New Zealand have service) and generate leads by are more or less all semi-rural or the local radio station playing arranging appointments during rural districts (see fastest growing somewhere on the premises. the coffee break (also at the end, business districts), it’s not out of Although some leads can be but this strategy is more effective the question to eventually look at generated by this form of media, during the seminar). Seminars opening up a highly visible high it is mainly about creating brand should cover the following: current street office. This will add overheads awareness. market situation on a global & to the operation but due to the local scale, trend of that market, general nature of the commercial SME Consulting mission statement, lease expenses being lower than services offered, how those the national average, it’s therefore services can benefit the client, an important mid growth step to facts & figures on the success consider. Remember, for every dollar rate of your services, examples of you put into the operation… how situations where a company should many will you get back? This would bring in a consultant, disaster be ideal for when the business examples of where they didn’t, moves past the embryonic stage give names of existing or past and has a need to distribute some of clients (with permission) and lastly the more mundane responsibilities cost. Seminars of this type are by delegating this to employees. usually a - hour affair and light refreshment should be provided. It is important that the seminar is held at a proper venue such as a conference room of a hotel 19

How important Sponsorships: Quite often people • Should you have a system to think this means giving some money identify repeat customers and is price as a to the local sports club to have then systematically contact the logo included on team shirts. them? competitive factor? But the most effective form for a • How much will you spend on the Do your intended business such as SME Consulting items listed above? is to sponsor a business planning/ customers really innovation competition such as the PRICING “Cable Car Challenge” sponsored by make their purchase For most small businesses, having Rod Drury the founder of Xero Ltd. the lowest price is not a good policy. decisions mostly Again, this is very effective brand It robs you of needed profit margin; awareness creation. customers may not care as much on price? This is all very dependent on the about price as you think; and large location and niche to be targeted, competitors can under price you but the above can be used to define anyway. Usually you will do better the exact mix required. to have average prices and compete Important questions to be asked on quality and service. Therefore when defining that mix are as the following questions must be follows: asked by the operator: • How will you get the word out to Does your pricing strategy fit customers? with what was revealed in your • Advertising: What media, why, competitive analysis? and how often? Compare your prices with those of • Have you identified low-cost the competition. Are they higher, methods to get the most out of lower, the same? Why? your promotional budget? How important is price as a • Will you use methods other competitive factor? Do your than paid advertising, such as intended customers really make trade shows, catalogues, dealer their purchase decisions mostly on incentives, word of mouth (how price? will you stimulate it?), and What will be your customer service network of friends or and credit policies? professionals? • How do you want customers to see you? Is that inline with the brand? 0

BUSINESS PLAN Proposed Location DISTRIBUTION CHANNELS FASTEST GROWING How are you going to sell your BUSINESS DISTRICTS Once the geographical location has products or services? been selected, it’s important to remember that metropolitan based • Retail clients don’t care so much about • Direct (mail order, Web, where you are based but more catalogue) about the quality of service and reputation. If you have selected • Wholesale CHATHAM IS. one of the districts (or similar) • Your own sales force The median age of people in the outlined in this plan then where Chatham Islands District is .8, • Agents your operation is actually based compared with 4.8 for all of • Independent representatives does become an important factor for New Zealand. many prospective clients. • Bid on contracts Very Sparse population Generally this particular market • Sales Forecast Fishing is the main industry segment will trust locally run Use the sales forecast database businesses over the larger city 6.7% of people aged 15 years (Resources DVD) to prepare a based ones due to accessibility and over in the Chatham Islands month-by-month projection. The and convenience of the service District said they have no formal forecast should be based on the provider. Again this may also raise qualifications, compared with 27.6% marketing strategies that have just the question of the actual premises of people aged 15 years and over in been described and industry data, if of the operation. It’s important New Zealand. available. that if a client does come to you you may want to do two forecasts: 51 households or .% in the for a meeting, that there is an 1) a “best guess”, which is what you Chatham Islands District have actual ‘place of business’ feel to the really expect, and ) a “worst case” access to the Internet, compared premises whether that be a room low estimate that you are confident with 7.4% for all of New Zealand. in your own home used as an office or an actual leased office space. For you can reach no matter what Although there has been a slight example, is there off street parking? happens. increase in tourism, there is still too Are there any family pets? These Remember to keep notes on your small a population (800 apx) for it can all easily damage the image of research and your assumptions as to be considered a viable option. the operation. you build this sales forecast and all It could be prudent to ask “is subsequent spreadsheets into the it what your customers want plan. This is critical if you are going and expect”? to present it to funding sources. 1

OPERATIONAL PLAN “Do you know what LEGAL ENVIRONMENT PERSONNEL • Licensing of several software • Type of labor (skilled, unskilled, it will cost you to packages is a must such as and professional) MYOB or XERO (recommended) extend credit? Have • Where and how will you find the • If you will be offering Financial right employees? you built the costs Planning services then you • Quality of existing staff into your prices?” should check to make sure you have the relevant qualifications • Pay structure • Health, workplace, or • Training methods and environmental regulations are requirements adhered to • Who does which tasks? • Currently there is no compulsory regulation to have any formal • Do you have schedules and qualification to be a business written procedures prepared? consultant. (Does not apply to • Have you drafted job all services i.e. law) descriptions for employees? • Please speak to your local If not, take time to write business insurance some. They really help internal representative to understand communications with your requirements or we employees. recommend speaking to your • For certain functions, will you solicitor. use contract workers in addition to employees?

BUSINESS PLAN SUPPLIERS CREDIT POLICIES FASTEST GROWING Identify key suppliers: • Do you plan to sell on credit? BUSINESS DISTRICTS • Names and addresses • Do you really need to sell on credit? • Type and amount of inventory furnished • How will you check the creditworthiness of new • Credit and delivery policies applicants? We recommend Waimakariri • History and reliability www.creditconsultants.co.nz The median age of people in Should you have more than one • What terms will you offer your the Waimakariri District is 37.4, supplier for critical items (as a customers; that is, how much compared with 4.8 for all of backup)? credit and when is payment New Zealand. due? The population of the Waimakariri Do you expect shortages or short- District contains a smaller term delivery problems? • Will you offer prompt payment proportion of Pacific peoples (0.5%) discounts? Are supply costs steady or and smaller proportion of Asian fluctuating? If fluctuating, how • Do you know what it will cost people (0.8%) compared with the would you deal with changing costs? you to extend credit? Have you whole of New Zealand (at 6.5% and built the costs into your prices? 6.6% respectively). (Help with pricing is offered as 9.2% of people aged 15 years and part of the sale agreement) over in the Waimakariri District have an annual income of more than $50,000, compared with 11.5% for New Zealand as a whole. The most popular occupational group in the Waimakariri District is service and sales workers. This is also the most popular occupational group in New Zealand as a whole. 4,60 households or 4.7% in the Waimakariri District have access to the Internet, compared with 7.4% for all of New Zealand.

“We recommend MANAGING YOUR through outsourcing or factoring ACCOUNTS RECEIVABLE them on. They also would make a a reputable credit If you do extend credit, you should very useful partner for the operator do an aging at least monthly to of SME Consulting for future clients consulting agency track how much of your money is consulting packages. be brought on tied up in credit given to customers Managing Your Accounts and to alert you to slow payment Payable board...” problems. You should also age your accounts Accounts Receivable Aging payable, what you owe to your You will need a policy for dealing suppliers. This helps you plan whom with slow-paying customers: (see to pay and when. Paying too early Resources DVD) depletes your cash, but paying late • When do you make a can cost you valuable discounts and phone call? can damage your credit. (Hint: If you know you will be late making • When do you send a letter? a payment, call the creditor before • When do you get your attorney the due date.) to take legal action? Do your proposed vendors offer We recommend a reputable credit prompt payment discounts? consulting agency be brought on board such as Credit Consultants Ltd. By doing this you will be able to collect debts owing without having to waste valuable time and resources chasing them. Credit Consultants have an array of policies and products that can benefit a small business selling on credit. They also can help to manage your accounts receivable 4

BUSINESS PLAN MANAGEMENT AND ORGANIZATION PROFESSIONAL AND ADVISORY SUPPORT FASTEST GROWING BUSINESS DISTRICTS Support type: Name Name Board of directors Management advisory board Attorney Accountant Tauranga Support type: Name Name Insurance agent The most popular occupational Banker group in Tauranga District was Consultant or consultants Service and Sales Workers (16.8 Mentors and key advisors percent). The most popular occupational group for New Zealand In the tables above, list the support www.net24.co.nz (Current as a whole was Service and Sales people you wish to use. reseller agreement in place) Workers (14.8 percent). Thriving economy, driven by The following are our recommended Net4 is one of New Zealand’s commercial enterprise and tourism suppliers for various services: leading web hosting and data combined with ten years of strong (The Vendors are under no hosting providers. We have been property values. financial obligation to make these providing robust, secure and fast recommendations and are made New Zealand based web hosting Large population of 109,100 (2006), solely as a means of providing services to New Zealand businesses Tauranga is growing by 5 people credible contact information for since 1999. Learn about our data a week and 88 new dwellings per future needs) centre and find out why thousands month creating demand for all retail of businesses trust Net4. services www.creditconsultants.co.nz www.1stdomains.co.nz Papamoa is expected to become a Credit Consultants provides a wide city itself within 15 years range of credit management and See Net 4. New Motorways are almost near related services throughout New www.webdeveloper.com completion which is expected to Zealand and Australia. Our clients A web developer forum and lower the drive time to Auckland include private and public sectors resources, database. Links web significantly and result in a much organisations, large corporate and developers from all over the world higher influx of new residents. small/medium sized businesses. to solve any coding issues. Also provides useful, free educational resources. 5

Graphic Solutions www.buildwebsite4u.com www.business.govt.nz Web page templates are ready- You’re at the New Zealand is a graphic design made Web pages created to use government business site. The business based in as a basis for fast and high-quality information and tools here are website development. All you need designed to help you start, manage Wellington which is to add your text and pictures to or grow your business and deal with your Web design template - and the day-to-day challenges along the provides highly you’ll get a functional and individual way. innovative branding site ready for upload. www.leasetech.co.nz and marketing www.graphicsolutions.co.nz You don’t have to be a big business solutions. Graphic Solutions is a graphic to enjoy the benefits of leasing design business based in Wellington with Leasetech. Get the capital which provides highly innovative equipment you need with one of our branding and marketing solutions. business friendly leases and enjoy (The SME Consulting brand was smoother cash flow, tax effective developed under their guidance) payments and flexible options. Leasetech is ideal for any business, www.francisconsulting.co.nz small, medium or large and gives Francis Consulting is a boutique you the choice of equipment business advisory and chartered supplier. accountancy firm in the heart of Wellington’s CBD. We are committed to providing business owners with new ideas and quality advice www.iponz.govt.nz This New Zealand Government website provides information on patents, trade marks and designs. Here you can search the registers, pay renewal fees, file trade mark applications, and find forms and guides on intellectual property in New Zealand 6

BUSINESS PLAN PERSONAL FINANCIAL STATEMENT You should also complete personal FASTEST GROWING financial statements (See Resources BUSINESS DISTRICTS DVD) for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and Ruapehu these statements will show what is available. Bankers and investors The most popular occupational usually want this information as group in Ruapehu District was well. Agriculture and Fishery Workers (.5 percent). The most popular occupational group for New Zealand START-UP EXPENSES as a whole was Service and Sales AND CAPITALIZATION Workers (14.8 percent). Increasing amount of tourism It’s important to estimate expenses it destroys the accuracy of your development due to the ski fields accurately and then to plan where carefully wrought plan. The second Strong Hospitality industry with you will get sufficient capital. approach is to add a separate festivals held at ohakune every This is a research project, and line item, called contingencies, to year for the start of the ski season. the more thorough your research account for the unforeseeable. This This creates more demand for new efforts, the less chance that you is the approach we recommend. bars and cafes. will leave out important expenses or underestimate them. (See Talk to others who have started The tourist towns of Whakapapa, Resources DVD) similar businesses to get a good National Park and ohakune are also idea of how much to allow for located here. Even with the best of research, contingencies. If you cannot get Population is decreasing due to however, opening a new business good information, we recommend rising property values as more has a way of costing more than a rule of thumb that contingencies city based investors are buying up you anticipate. There are two ways should equal at least 0 percent holiday homes around the main to make allowances for surprise of the total of all other start-up tourist spots of ohakune and expenses. The first is to add a expenses. Whakapapa. little “padding” to each item in the budget. The problem with that approach, however, is that 7

FINANCIAL PLAN (SEE RESouRCES DVD) The financial plan consists of a 12- so that you can explain them later if “If the profit month profit and loss projection, a necessary, and also so that you can projection is the four-year profit and loss projection go back to your sources when it’s (optional), a cash-flow projection, time to revise your plan. heart of your a projected balance sheet, and a FOUR-YEAR PROFIT break-even calculation. Together business plan, PROjECTION (OPTIONAL) they constitute a reasonable The 1-month projection is the cash flow is estimate of your company’s financial heart of your financial plan. This future. More important, the process the blood...” of thinking through the financial section is for those who want to carry their forecasts beyond the first plan will improve your insight into year. the inner financial workings of your company. of course, keep notes of your key assumptions, especially about 1-MONTH PROFIT AND things that you expect will change LOSS PROjECTION dramatically after the first year. Many business owners think of the 12-month profit and loss projection PROjECTED CASH FLOW as the centerpiece of their plan. This If the profit projection is the heart is where you put it all together in of your business plan, cash flow is numbers and get an idea of what the blood. Businesses fail because it will take to make a profit and be they cannot pay their bills. Every successful. part of your business plan is important, but none of it means a Your sales projections will come thing if you run out of cash. from a sales forecast in which you forecast sales, cost of goods sold, The point of this worksheet is to expenses, and profit month-by- plan how much you need before month for one year. start-up, for preliminary expenses, operating expenses, and reserves. Profit projections should be you should keep updating it and accompanied by a narrative using it afterward. It will enable you explaining the major assumptions to foresee shortages in time to do used to estimate company income something about them—perhaps cut and expenses. expenses, or perhaps negotiate a Research Notes: Keep careful notes loan. But foremost, you shouldn’t be on your research and assumptions, taken by surprise. 8

BUSINESS PLAN There is no great trick to preparing And of course, depreciation does FASTEST GROWING it: The cash-flow projection is just not appear in the cash flow at all BUSINESS DISTRICTS a forward look at your checking because you never write a check account. for it. For each item, determine when you actually expect to receive cash (for OPENING DAY BALANCE sales) or when you will actually SHEET A balance sheet is one of the have to write a check (for expense Porirua fundamental financial reports that items). any business needs for reporting The most popular occupational you should track essential operating and financial management. A group in Porirua City is clerks. data, which is not necessarily part balance sheet shows what items The population of Porirua City of cash flow but allows you to track of value are held by the company contains a larger proportion of items that have a heavy impact (assets), and what its debts Pacific peoples (26.7%) and on cash flow, such as sales and are (liabilities). When liabilities smaller proportion of Asian inventory purchases. are subtracted from assets, the people (4.0%) compared with you should also track cash outlays remainder is owners’ equity. the whole of New Zealand (at prior to opening in a pre-start-up 6.5% and 6.6% respectively). Use the start-up expenses and column. You should have already capitalization spreadsheet as a The median age of people researched those for your start-up guide to preparing a balance sheet in Porirua City is 0.8, expenses plan. as of opening day. Then detail how compared with 4.8 for all your cash flow will show you you calculated the account balances of New Zealand. whether your working capital is on your opening day balance sheet. 8.0% of people (1,87) in adequate. Clearly, if your projected optional: Some people want to add Porirua City are aged under 15, cash balance ever goes negative, a projected balance sheet showing compared with .7% for all of you will need more start-up capital. the estimated financial position of New Zealand. This plan will also predict just the company at the end of the first Rapid expansion of SME’s when and how much you will need year. This is especially useful when seeking to lower their costs by to borrow. selling your proposal to investors. moving away from Wellington. Loan payments, equipment Again property inflation can be purchases, and owner’s draws blamed. usually do not show on profit and High Internet usage and loss statements but definitely do excellent modern transport. take cash out. Be sure to include them. 29

RESOURCES TO BE FOUND ON THE ‘RESOURCES DVD’ “A break-even BREAK-EVEN ANALYSIS ü Brochures and advertising A break-even analysis predicts the materials analysis predicts the sales volume, at a given price, required to recover total costs. In ü Industry studies sales volume, at other words, it’s the sales level ü Magazine or other articles a given price, that is the dividing line between supporting findings operating at a loss and operating at required to recover a profit. ü Copies of any contracts total costs” Expressed as a formula, break-even ü Any other materials needed to is: support the assumptions in this plan Breakeven Sales = Fixed Costs ü Market research studies ü original files specific to SME Consulting (logo etc) ü Databases ü Brand Manual ü Stationary (invoices, letterhead etc) 0

BUSINESS PLAN REFINING THE PLAN The generic business plan presented FOR INVESTORS FASTEST GROWING here in should be modified to suit Investors have a different BUSINESS DISTRICTS your specific type of business perspective. They are looking for and the audience for which the dramatic growth, and they expect to plan is written. This can be done share in the rewards: in collaboration with the current operators of SME consulting at an • Funds needed short-term extra cost to be negotiated as part • Funds needed in two to Southland of the sale agreement. five years The median age of people in the FOR RAISING CAPITAL • How the company will use Southland District is 6.8, compared You will need to supply the following the funds, and what this will with 4.8 for all of New Zealand. information in a professional format. accomplish for growth. 3,030 households or 29.7% in the • Estimated return on investment Southland District have access to FOR BANKERS the Internet, compared with 7.4% Bankers want assurance of orderly • Exit strategy for investors for all of New Zealand. repayment. If you intend using this (buyback, sale, or IPo) plan to present to lenders, include: The Southern Institute of • Percent of ownership that you Technology offers free education. • Amount of loan will give up to investors This brings net youth migration, • How the funds will be used • Milestones or conditions that leading to an increased demand for you will accept all services & hospitality. • What this will accomplish— how will it make the business • Financial reporting to be Stewart Is. is becoming a major stronger? provided tourist attraction. • Requested repayment terms • Involvement of investors on the Currently one of the fastest (number of years to repay). board or in management growing property markets left in New Zealand due to economic You will probably not have expansion. much negotiating room on interest rate but may be able to negotiate a longer repayment term, which will help cash flow. • Collateral offered, and a list of all existing liens against collateral 1

MANAGING THE BRAND “Don’t try to COLOURS There are 3 main colour spaces, RGB, CMyK and PANToNE. you will find the reinvent the wheel, SME Consulting logo supplied in all of these formats on the Resources DVD. Below are the explanations and SME brand colour information. keep ‘it’ clean and RGB (red, green, and blue) refers to a system for representing the colors consistent” to be used on a computer display. Used in basically anything intended to be viewed on screen(note Microsoft applications also use RGB). R:159 G:39 B:41 R:181 G:176 B:173 CMYK (cyan, magenta, yellow and black) This most common colour space used for professional level print. Also called full colour, and is used for any printed work using photographs. (Digital Printing only uses CMyK) C:25 M:96 Y:90 K:21 C:30 M:6 Y:8 K:0 PANTONE A set of standard colours for printing, each of which is specified by a single number. Pantone Colours are also sometimes referred to as corporate colours and are mostly used for printing of company stationery or in one or two colour print runs. PANTONE 704 PANTONE Cool Gray 6 FONTS Logo Font: Trade Gothic ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz General Use Font: Verdana ABCDEFGHIJKLMNoPQRSTUvWXyZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNoPQRSTuVWXYZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz

BUSINESS PLAN OPENING DAY BALANCE SHEET ASSETS LIABILITIES & NET WORTH Current Assets Current Liabilities Cash in Bank $- Accounts Payable $- Inventory $- Taxes Payable $- Prepaid Expenses $- Notes Payable (due within 1 months) $- Other $- Current Portion Long-term Debt $- Total Current Assets $- Other current liabilities (specify) $- Total Current Liabilities $- Fixed Assets Machinery & Equipment $- Long-term Liabilities Furniture & Fixtures $- Bank Loans Payable Leasehold Improvements $- (greater than 1 months) $- Property / Buildings $- Less: Short-term Portion $- Other $- Notes Payable to Stockholders $- Total Fixed Assets $- Other long-term debt (specify) $- Total Long-term Liabilities $- Other Assets Specify $- Total Liabilities $- Specify $- Owners’ Equity (Net Worth) $- Total Other Assets $- Total Liabilities & Net Worth $- Total Assets $-

BUSINESS PLAN STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS ANALYSIS My Company Competitor 1 Competitor Competitor STRENGTHS What are your business advantages? What are your core competencies? Where are you making the most money? What are you doing well? WEAKNESSES What areas are you avoiding? Where do you lack resources? What are you doing poorly? Where are you losing money? What needs improvement? OPPORTUNITIES Any beneficial trends? Niches that competitors are missing? New technologies? New needs of customers? THREATS obstacles to overcome? Aggressive competitors? Successful competitors? Negative economic conditions? Government regulation? Changing business climate? vulnerabilities? 5

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