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Business Plan template to ‘Grow a business’
 

Business Plan template to ‘Grow a business’

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The document is a template of a business plan for developing a social networking software company.

The document is a template of a business plan for developing a social networking software company.

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    Business Plan template to ‘Grow a business’ Business Plan template to ‘Grow a business’ Document Transcript

    • Writing a Business Plan A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals (source Wikipedia). Business plan is essential tool for any entrepreneur looking to start a business. The document should be aimed at helping you plan your journey from start to finish. My top tip when developing a business plan is to keep it simple to give anyone a quick overview of your business ambitions. You are encouraged to use this document as a guide, I would strongly discourage you to copy it blindly. Remember the business plan is primarily for you. This business plan was built over three months in 2007, to plan our growth. Kwiqq evolved and we have a very different business model now. I’m sharing this with the Out now on Amazon community, if you find this useful please Aug 2010 share it with others. The document serves as a mock and is not Kwiqq’s business plan. “Essential Social Media knowledge to grow your business...” Raj Anand Twitter | Blog | LinkedIn RajAnand.biz
    • Business Plan made by Raj Anand, Social Media Innovation Business Plan – <Company Name> 2 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Index Executive Summary .......................................................................................................................4 Background and Strategic Vision ................................................................................................5 Strategy for Growth .......................................................................................................................8 Technology ...................................................................................................................................9 Trademark and IP ........................................................................................................................9 Our Software ..............................................................................................................................10 Benchmark .................................................................................................................................10 Market ...........................................................................................................................................12 Growth of Social Networks .........................................................................................................12 Social Networking Phenomenon ................................................................................................12 For Corporate Clients .................................................................................................................13 3rd party Social Networks ......................................................................................................14 Market Share .............................................................................................................................14 Sales Strategy ............................................................................................................................16 Marketing ...................................................................................................................................17 Global expansion .......................................................................................................................17 Exit Strategy ...............................................................................................................................18 Organisation Structure ...............................................................................................................18 Current Structure ....................................................................................................................18 Structure in 6 months .............................................................................................................19 Structure in 1 year ..................................................................................................................19 Structure in 2 years ................................................................................................................19 <Company Name>’s Journey......................................................................................................20 Management Team ....................................................................................................................20 Finance .........................................................................................................................................21 Evaluation: .................................................................................................................................21 Advertising .............................................................................................................................22 User Generated Content / Users ............................................................................................22 Setup/Monthly cost .................................................................................................................22 Appendix 1 ...................................................................................................................................23 3 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Executive Summary <Company Name> is a company supplying social networking software to entrepreneurs and bluechip clients. The company was established on 15th January 200X in XXX. <Company Name> was formed out of the work XXX did whilst studying computer science and artificial intelligence (MRes) at XXX. After developing the first version of the software with the help of XXX(Creative) and XXX (Business Strategy and Legal), XXX met XXX. XXX co-founded a successful corporate entertainment venture establish over 9 years called the XXX with over XXX employees globally. XXX, XXX and XXX formed <Company Name> and undertook the roles as CEO, Technical and Creative Director respectively. A loan of £XXX was taken to fund the company by them. <Company Name> over the last year has been covered in various business and technology publications like: XXX, XXX, XXX and various local business magazines with focus on the founders and product. The company over the last one year has XXX clients in UK and US paying at an average £XXX (setup) + £XXX (monthly). The company is working with top brands like XXX, XXX and XXX. <Company Name>’s vision is to be the leading social networking software provider for corporate clients based on their product and experience in developing successful communities. <Company Name> will expand into 15 major cities in the next 5 years. The vision is to establish local offices in these cities and maintaining its headquarters in XXX, UK. <Company Name> will supply software in these cities through local offices where the sales and account managers will be placed. <Company Name> is now looking to raise £ XXX million in 3 stages over the next 2 years: £ XXX million (first year), £ XXX million (next 6 months) and £ XXX million (following 6 months). The first round is required for further product development, expansion into US and UK and increase operation (sales and technical staff). The rest is required to continue our expansion overseas and for operation cost. In XXX 2007, XXX a business angel and XXX’s Chairman invested £XXX for XXX% of the business and is now non executive director of XXX. XXX a lead Strategy Consultant at XXX and XXX, XXX became non executive director and investor in the business. <Company Name> now has four full time and four part time contract developers based in XXX. The company has gone through a major software upgrade in XXX 2007. <Company Name> has now adopted framework used by XXX, which aligns it with big players in the social networking/ online software arena. <Company Name> from its experience has identified three industries they would like target: travel operators, recruitment companies and incubator centres. 4 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation • Mission Statement <Company Name>’s mission is to be the primary social networking software provider for corporate clients and high performing new enterprises. <Company Name>’s competitive advantage is built around 4 unique resources: 1. A first mover advantage in terms of signing up and managing corporate clients’ social networking sites in a market where scale economies and network effects matter 2. Leading edge Intellectual Property with its white labelled, modular social networking software 3. Provision of open source technology in order to establish <Company Name>’s platform as the industry standard 4. User Generated Content on clients’ site which is jointly owned <Company Name>’s business model is based on a fixed fee for set-up plus an ongoing management fee to maintain and update a corporate social networking site. The model has been well received by our present and prospect clients and will make it very difficult for competitors to subsequently try to lure clients away. Background and Strategic Vision <Company Name> is nearly a year old. The company was launched in XXX in January 2007 to supply social networking software to corporate clients. Although the software had been in development from Dec 2005. In just one year <Company Name> has signed eight clients including XXX, XXX, XXX, XXX, XXX, XXX, XXX, XXX and has been featured in several high profile publications including XXX, XXX, XXX etc. It has gained accolades in the media including XXX, founder and Director of Innovation at <Company Name>, XXX. <Company Name>’s CEO, XXX has been invited as a speaker and panel member of several conferences in XXX, XXX etc. <Company Name> is currently working with clients in the Travel, Entertainment and Government. Appendix 1 provides some of the press coverage and advertising from some of the events. “<Company Name> have worked closely with us to develop our business networking project, XXX. We have been delighted with the results achieved thus far and have found the knowledge, service and support offered from the <Company Name> team invaluable in resolving any issues promptly.” - XXX, XXX For many corporations, social networking is more than a phenomenon but a necessity; it enables them to: generate revenue, market their product/service, create a point of difference with their competition, collect customer feedback and increase interaction amongst their offline community. Most clients recognise that a social network is becoming a service that is expected of them, especially in the travel industry. <Company Name>’s service offering is best explained with reference to a client example: 5 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Example: <Company Name> developed a social network for XXX Holidays (XXX’s 18-30 age group brand): XXX.co.uk. The site helps XXX brand in the following ways: • Site allows XXX a platform to market their existing products and holidays (Graphs available below) • It allows XXX to collect a database of their users and others interested in their brand • Increases their profit share by encouraging users to book online and bypass agency commission. • Encourages new users to book with XXX by showing real case studies of satisfied customers on the social networking website. • Provided travellers the opportunity to meet with others and it’s also an excellent method to communicate and give feedback • Make contacts and search venues and other XXX products before they left for the holiday <Company Name>’s vision is to be the No.1 choice for Social Networking Software for corporate clients globally. Social Networking is defined as websites where users can build their own profile, search and tag multimedia. Prominent examples include: Facebook or Myspace. Our software 6 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation framework is visually highly adaptable and the website’s business logic and presentation can be completely customisted on a per client basis. We will charge our clients for developing the logic and presentation layers, as well as maintaining and hosting the site. Extended consultancy can also be sold to brainstorm methods of revenue generation and marketing.. We also plan to release the core <Company Name> framework as open source software. The business logic and presentation layer will be proprietary IP. The release will be in English and developers can build their own visual, logic and language layers as well as contribute to the core framework. The software can be used for open/closed, social/business use in multiple languages. <Company Name> will control the content of release versions of it’s software framework. The software is built on XXX, an open source framework available and used in large-scale installations including XXX with 20 million users, and is available in 12 languages. The open source approach is aimed to make <Company Name> the market leader for the corporate sector of the social networking web industry. It will allow web design companies to build simple social networking sites for SMEs (small to medium sized enterprises) sector which require basic social networking features like profiles, search users etc. These are often less demanding than corporate clients who require advance backend system to work with their existing infrastructure. However, by doing so <Company Name>’s technology will have greater networking power for the corporates – who will need more sophisticated features and hence <Company Name> technology. <Company Name>’s advantage scales with the number of installations as with more clients more technical solutions will be developed. Ultimately the aim is to establish <Company Name>’s technology as the industry standard. This will ensure that <Company Name> has an unassailable long term competitive advantage in the corporate sector of the market and a base upon which much wider product proliferation can be generated. <Company Name>’s business model is based on building the proprietary visual and logical layers on top of the <Company Name> framework in partnership with our clients. This is a similar strategy to MySQL, the market leader by number of installations in the database software market. MySQL used an open source software and community around it, to promote its software. One point of difference between <Company Name> and MySQL is that <Company Name> will provide software and service whilst MySQL only provides support for its software. As our target market is blue chip clients we expect our status as creators and lead developers combined with our comparatively low cost (discussed below) and real world experience in building successful corporate social networks will ensure we are the optimum choice. <Company Name> is significantly more cost effective than the alternative of hiring Web 2.0 consultants or using an in- house team to develop social networks for their website. Open sourcing will help us market our products to corporate companies, establish ourselves as leaders in social networking and get developers in corporate companies onboard. The contributions of the open source community to our software will leverage <Company Name> resources and increase its evaluation. We also expect that open sourcing our software will create a pool of experienced developers with the potential to join our product development team. 7 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation We intend to reach blue chip clients primarily in the travel and tourism, entertainment (gigs, festivals etc) and large communities (government agencies and B2C business customers e.g. recruitment, publications etc). <Company Name>’s vision is to expand globally by forming partnerships with companies and assign sales and account managers to each country. As such <Company Name> looks to expand into 14 countries in the next two years. Based on our current success and open sourcing our software we plan to have XXX clients at the end of XXX paying £ XXX (setup) and £ XXX (monthly). Our revenue and after tax profits will be XXX and XXX by the end of 2009. At present <Company Name> is charging £ XXX for a setup fee and £ XXX per month for maintenance which we will increase in 2008 based on the fact that we will grow the number of services we provide to our clients like moderation of content, marketing consultancy etc (further discussion in Strategy for Growth). Strategy for Growth Our growth strategy is to expand globally through partnerships using our current business model which has helped us expand rapidly already in 3 continents from our UK office. Historically the most effective strategy for <Company Name> has PR by constantly being in news (often for new social network launch and speaking at high profile events), continuously develop our product and good communication with prospect and current clients. We form partnerships with our clients and work with them closely. As experts in the social networking software field we believe we are in a great position to launch our global campaign. Within five years we will have offices and staff (similar to XXX, UK office) in major cities worldwide. Apart from social networks we will provide additional value added services: • Moderation of content: Some corporate clients are required by law to moderate/approve the content on their sites before publishing it. This has been requested of us and in the past we have suggested outsourcing it to third party specialists. We know it’s a lucrative market with only few dominant players and we know there is definite market in supplying this service. • Marketing consultancy: For a successful online community a marketing/PR strategy is required. Being in this space <Company Name> understands the commonly used strategies and will advise clients on how best to grow their communities. • Advertising: With several communities under <Company Name>’s banner we will be able to provide advertisements as a standard package to our clients. This will provide our clients another method to monetise their social network. • High Traffic Hosting: As <Company Name>’s software is fully scalable and can cope with millions of users we believe we can add extra value to our clients as a one stop shop for all social networking requirements. Adding high traffic hosting will reduce the costs associated with outsourcing hosting for high-bandwidth sites This is often a requirement for social networking sites as they typically have a high volume of multimedia content uploaded by users, often referred to as UGC or User Generated Content. These will work in conjunction with the social networking software we provide to our clients. We will also branch out into similar markets in the online social marketing space like widget generation, online multimedia (videos, interactive games etc). To make our strategy possible we will look to acquire carefully selected start-ups or hire key individuals in the space we are targeting. 8 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Technology All our software is developed in our XXX office so we have a centralised operation. This gives us control of software progress. Our software is built on the XXX framework developed by XXX over the last 9 years. XXX is a fully scalable and modular PhP framework which allows our software to be database independent so clients could use Oracle, MySQL, MS-Sql database with minimum work. <Company Name>’s code is modular and sits on top of XXX’s framework which implies our code is scalable and can be changed to match client’s requirements. To increase our reach we are looking to open source <Company Name> module’s for blogging, picture upload, login system etc to the community. This will help us market our software and provide our service to corporate clients who will use us as experts in customising our software and consultancy. <Company Name> will be in total control of the presentation and business logic for the clients’ website, which we will build from scratch for our clients. For £XXX (setup cost) + £XXX we will provide our clients with XXX hours of set-up time (developers and designers) and XXX hours per month. Any extra development will be charged £XXX per day, depending on the number of hours involved in development. The XXX software will be released to the XXX community which already have several developers (over 5,000 developers) on board. XXX is a web application framework for PHP projects. It is sponsored by XXX and developed by the community over the last XXX years. Development of all the modules will take XXX weeks. There are XXX modules we will release to the community each one will be released separately and will be documented and would include examples and unit test. Once all the modules are released the tools will be available as a package. <Company Name>’s software uses XXX framework and PhP/MySQL as our base software. As our software is database independent, any website based in Linux (Studies show 6 out 7 popular websites are based in Linux) and has provisions to install PhP (one of the most popular open source scripting languages), can use <Company Name>’s social network. This implies <Company Name>’s framework is compatible with the majority of the corporate clients. So far all the companies we are working with have used <Company Name> to host their social network. In this scenario their principle website’s hosting environment will not affect their decision. Trademark and IP <Company Name>’s main Intellectual Property lies in its <Company Name> modules (discussed above) and two additional layers of the software (business and presentation logic). Although over the last one year <Company Name> has built its brand in the social networking scene and hence <Company Name> and its logo will be trademarked in the UK, EU and US. This will protect <Company Name>’s brand identity in the social networking scene. <Company Name> will be trademarked under 6 categories, out the 45 available: Class 9 Electronic publications; downloading of electronic publications; computer software Class 35 Online business and professional networking services Class 37 Maintanance, repair and installation of software 9 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Class 38 Telecommunications; networking via the internet; provision of portals and blogs for networking Class 42 Application provider services (APS) Class 45 Personal and social services rendered by others to meet the needs of individuals Our Software XXX our software is a key strategic decision. It will be very helpful in penetrating into foreign markets. It will help developers and smaller companies build their own social network which should not affect us as they are not our target market. The XXX team would consist of one developer to constantly document and answer queries. This team would be led by XXX who will be the facilitator and involved in marketing this aspect of the business. We are convinced that if the <Company Name>’s open source software is a success we will see a lot of interest from Blue Chip clients. As <Company Name> are not only experts in building the software, but also cost effective. In the short term, we expect users to suggest changes which will be updated by our developer, following this, the open source community may build patches and gradually increase its role, decreasing costs in significant parts of the software. We also expect a lot of updates to be received by our setup and maintenance team. We will have a separate section of the site dedicated to the open source community along with a mailing list an active forum. Benchmark Below is a list of competitors based predominantly in the United States. The competition can be classified into 2 types, B2B (business to business) and B2C (business to client). <Company Name>’s business model is B2B but examples of both kind are listed below: XXX XXX is a custom social networking system based in the XXX, US. Their product is a templated software solution with majority the social networking tools required by business. They have a cookie cutter approach to the problem and have over a hundred social networking sites in their portfolio. The company doesn’t have any particular niche and supply their social networking platform to different sectors. They have a free, mid and an enterprise product. The enterprise product starts at $XXX (setup) and $XXX per month. Hence they provide both a white labelled and an enterprise service to clients. We believe their implementation is good but their biggest downfall is the lack of service for corporate clients as their focus is distributed. XXX.com is part of a web hosting company XXX.com which gives them a track record in providing hosted solutions. We will compete with XXX.com in the US based on the service we provide to clients and our product. We believe our product is superior to theirs as its based on XXX (open source PhP5 10 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation framework) and soon our time to create a community will reduce significantly. Further we will rely on open source community to extend maintain our dominance over onsite and other networks XXX XXX is a Web 2.0 agency based in the Los Angeles, US, specialising in social networks. The company strictly follows a B2B model. Their average charge is £XXX (setup fee) and up to XXX% revenue share in the business. In the past they have developed social networking sites like: XXX.com, XXX.com and XXX.com site. XXX’s product implementation is not very convincing and clearly there is no underlining framework which powers their social network. XXX has a very informative and well written website and have done some marketing/PR to promote them in the US. Although we believe based on our product and open sourcing our core product we will have a much stronger marketing foundation. XXX The company is co-founded by Marc Andreessen (co-founder of Netscape). It launched its service in October 2005. Ning is an online platform for creating social websites/ networks. Ning’s model has a B2C model where users can build their own community based on Ning’s template. By June 2007 there were 67,000 communities and in September 2007 the number of users was up to 100,000. Ning’s business model is advertising (Google Adsense) or flat licence fees of $19.95/month for users to run their own ads. As Ning is in the B2C market they don’t have a market sector focus. The solution is ideal for users looking to build their own inexpensive community. The downside is that the solution uses templates and will not be appropriate for corporates. Hence Ning is not in competition with <Company Name>, we have different audience. Ning aims to gain volume of traffic by creating small communities, whilst <Company Name> is looking to build larger communities by working directly with corporates. KickApps KickApps was developed as a white label social networking platform designed for web developers. Developers build their own social network on top of the platform hosted and maintained by KickApps. Whilst features and functionality of social networks vary, they are primarily defined by features such as, member profiles and various types of user generated content. Kickapps has a B2C model and is built primarily for developers. The number of communities is up to 3000 in June 2007. KickApps’s business model is similar to Ning’s: advertising and licence fee. KicksApps approach is unique and is good for customers with developers on board although it lacks easy setup packages for customers. Unlike KickApps, <Company Name> sets up all the entire social network for its clients, it also maintains and hosts the network, making <Company Name> an ideal choice for corporate and SMEs. Rareface The company was one of Europe’s few social networking solution providers based in London. 11 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Market Growth of Social Networks Online social networks have been evolving for several years in various forms e.g.: Usenet, bulletin board services, Arpanet etc at universities and companies. In the last few years they have caught mainstream attention and been adopted by the younger online audience and latterly for business, academia, medical, language etc. uses. In the mainstream the earliest social network was Classmates.com, started in 1995 to reunite school mates in the US. A similar website was also created by Friends Reunited in the UK in 1999 which was later bought by ITV plc for £120million. Both websites had a joining fee business model associated with them. Xing.com (earlier known as openBC) is a German Business social networking website in all major European languages which was launched in 2003 and with members in 190 countries and more than 1.5million paying members in July 2006 it went public (IPO). Xing.com has a revenue of 10.1 million Euros and tol date is one of the most successful business social networks Generic social networks (for friends) became popular with the launch of Friendster.com in March 2002. Friendster had 50 million users but due to lack of customisability and scalability issues Myspace took the lead. MySpace is a site which was initially focused on music but branched out to more mainstream users. Myspace’s USP was its customisability and emphasis on young music talent. In July 2005 Rupert Murdoch’s News Corporation bought Myspace for $580million. After the success of MySpace a few issues regarding privacy and customisability appeared. The technical community and the elder audience weren’t convinced by the profile and of being contacted by strangers. To solve the problem Facebook, a social networking website focused on university and predominantly used photo sharing was created. Facebook expanded internationally and broadened its niche. It raised $12.7 million in May 2005. Recently on Oct 24, 2007 Microsoft bought 1.6% of Facebook for $240 million evaluating it at $15bn. Simultaneously in the UK, Bebo.com was started by the founders of BirthdayAlarm.com and Ringo.com. Bebo is a site predominantly for the younger audience and has 40 million registered users. It has suppressed MySpace in several countries including UK, Ireland and New Zealand. In the UK the site is more popular than AOL ranked 6th based on the number of viewers. Although there are some clear winners in the Social Networking market in the US and Europe, there are some other sites dominant in the Asian and South American market like Google’s Orkut.com with approximately 68 million registered users and Hi5. The former is popular in Brazil and India and the later is predominantly popular in all over Asia. There are other sites growing quicker than Facebook in the US for example Perfspot is growing at 756% in just four months quicker than Facebook at 541%. Social Networking Phenomenon Social networking has recently been in news with Facebook in the lead. A major part of its success is as a result of launching an API (application programming interface). The API allows companies and developers to build applications in Facebook and reach users. Although this 12 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation means companies can market to Facebook users, their activity is restricted Eg: Contact information can’t be pulled out of Facebook’s system and ultimate control lies with Facebook. After this success for Facebook, Google has decided to release an API for its social network Orkut.com called Maka-Maka. MySpace, LinkedIn and Hi5 are also rumoured to be launching their platforms soon. For Corporate Clients Corporate clients are constantly looking to add value to their brand. Often used by companies to market, sell or collect information around their product/service. Social networking is currently an intuitive way to encourage their audience to interact with them. Social Networks have been used by travel, recruitment, magazine, automobile, football, production and many other companies. The advantage for corporate companies can be demonstrated by the social network we created for XXX’s youth brand XXX called XXX: The XXX community was built with the aim of increasing internet channel share as they are significantly more profitable for XXX. Participation by users has transformed into increased internet channel share by strongly linking XXX to XXX’s sales website. Since it’s standing start launch in April 2007 XXX has made a significant contribution to internet channel share and the prospects for 2008 are bright. As the graph indicates (above) XXX bookings were significantly improved in 2007 over 2006. Revenue comparison: JUL – 37% vs. 32% AUG – 40% vs. 35% SEPT – 42% vs. 19% 13 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation XXX rise in internet channel share were higher than XXXs over all sales: JUL – 37% vs. 28% AUG – 40% vs. 27% SEPT – 42% vs. 27% “The <Company Name> team are one of the friendliest and most professional suppliers that XXX have worked with. In a very short space of time, they have not only generated a thorough understanding of our target audience, but also implemented a technological solution which is already reaping significant brand building and financial awards in the online arena. With their innovation, vision and speed of action, it is no wonder that this initiative has had such a positive response amongst XXX management and customers alike.” - XXX, XXX Product Manager 3rd party Social Networks Similar effects, in general, can’t be achieved by investing in 3rd party social networks like Facebook, MySpace etc. As they don’t provide the database of users they are looking to market to. They are unable to effectively monitor their users and calculate the effectiveness of their campaigns. The social networks don’t provide content, which is invaluable from the prospect of advertisers, on their websites instead is adding value to 3rd party networks. Further there are no clear ways to monetise their 3rd party application campaigns. Traditional advertising, membership fee and affiliate marketing etc become unusable with this business model. Market Share • Travel: o XXX Holidays: XXX o XXX Holidays: XXX 14 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation • Business B2B Networks: o Recruitment Companies: XXX o Incubator Centres: XXX o Mortgage Brokers: XXX o Franchises: XXX • Entertainment: o Language Schools: XXX o Publications: XXX Out of the above markets there are 3 markets we will target initially, these are: Travel, Business Incubators and Recruitment companies. Below the market is explained gobally Travel companies: From our research based on travelgate.co.uk and ibisworld.com we found that there are 900+ operators in the UK, 1500+ operators in the US and 1000+ operators in Europe. The breakdown in the UK is: 123 Adventure brands 10 Birdwatching 27 Canals & rivers 18 Cooking 26 Disney 30 Diving 27 Ecological Brands 19 Gap year 25 Golf 43 Holiday parks & all-inclusive resorts 17 Horse riding 22 Language holidays 33 Safaris 49 Sailing 60 Short breaks & city holidays 8 Singles 63 Ski Brands 32 Spa and health 51 Specialist and cultural 38 Spiritual 129 Sports 26 Weddings 19 Working So far we have captured one in the singles (XXX) and another in the short breaks (Holiday Village, XXX). We think amongst the 23 sectors we can 1 in each sector in the UK similarly 23 in US and Europe each. This will make our travel market share to 69 clients over all in UK, Europe and US. Business Incubator: 2005 last mapping survey done by UKBI (UK Business Incubations) there are 270 incubators in the UK 2002 – 900 incubators in Western Europe 2002 – 1500 incubators in the US According to the report 90 % incubators are growing. We are currently working with one incubator based in XXX (South East) called the XXX. XXX is now increasing their involvement with 15 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation <Company Name> by working on 2 accounts. The regions are: South East, South West, North West, North East, Scotland, Wales and Northern Ireland we have 7 regions. We will get 2 clients (accounts) per region i.e. 14 clients in the UK. Western Europe has 9 countries based on the figures above we can get 14 X 9 clients: 126 clients. In the US we can get 1 client per state i.e. 50 clients in the US. That beings the client list to 190 business incubators world wide Recruitment Companies: In the UK there are 5000+ recruitment companies. To take the example of London alone there are: 4 Accountancy 35 Banking, executive finance. 17 Catering & hospitality 19 Education and teaching 17 Engineering & construction 38 General 6 HR & personal 76 IT, internet, telecoms 23 Legal 1 Multilingual 23 Nursing 20 Media sales and marketing 34 Secretarial and administration Amongst the 13 categories we have a client in the banking, executive finance sector. We believe we can get approximately two clients in each sector. This implies we will capture 26 clients in UK, similarly 26 in Europe and US. That is, <Company Name> will have 78 clients in the recruitment sector. Adding the above results shows that we have sufficient market to sell our product. This also implies that we could increase our sales more than the 210 clients we are estimating at the end of two years. Sales Strategy We have targeted markets in areas were we are currently successful: travel, B2B Networks and entertainment. With each new office we will repeat our tried and tested strategy: 1. Cold Calling Campaigns: From experience 1/10th of the sales at <Company Name> have come from cold calling campaigns. The most effective cold calls were targeted to a market niche. We will target our niche to travel, business (B2C) (eg recruitment agencies, professional clubs/societies etc) and government organisations. From experience we know 30 cold calls generate 5 meetings which usually lead to one client. Following this procedure we can generate clients based on the number of calls we make. Our target will be to call 30 companies per sales staff in a week. 2. Lead Generation: We are currently trying a new strategy using a lead generation company. These companies aim is to do research in a sector and target companies which could potentially use our product. After research they call companies and set appointments. 16 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation The advantage of using such companies is that they give a clear idea of the requirements of the sector and most importantly all the leads are provided at a fixed cost. Once the appointments are set the sales and account managers follow it up by a meeting to discuss the possibilities. 3. Networking: An important part of selling is to market the company in local niche events. Hence as a team we have been networking at travel, recruitment and marketing events. This allows us to meet with potential clients and provides us with valuable leads into the market. Further it also allows us to do market research and build up group of resellers who could talk about our product and maybe use their contacts and industrial knowledge to win projects. 4. Public Relations: To date PR has been the most successful method of generating clients. PR has enabled us to get people interested in social networks to directly contact us thus opening up new markets. Our strategy is to continue generating industry based PR aimed locally within the countries we are based in. The PR campaigns will be run at two levels. One from the head office in London/XXX which will be aimed our global presence but industry specific. In addition we will employ local PR agencies to develop industry specific PR to generate kudos around <Company Name>. Marketing So far our marketing has been primarily through unprompted interest in our product and service without the need for a specialist PR company. We were featured in BusinessWeek Magazine, India’s most selling newspaper – XXX, XXX, XXX. As we prepare to launch in other countries we will engage local PR companies to ensure our presence in as wide a range of local media as possible. From trade publications through to television. PR companies with specialist industrial knowledge in our target sectors will be preferred. To find PR companies we will use referrals from partners and case studies. Global expansion Our strategy to expand globally is to take our current success and replicate it globally while keeping the development of the <Company Name> product in XXX,UK in order to protect our IPRs and give our corporate clients confidence in the reliability, security and confidentiality of our service. To implement this strategy we will have account managers and sales staff placed in our foreign offices. Sales staff will close the deals for us and will actively networking with possible clients and report to the sales director in the UK office. Once the deal is closed account managers will be the first point of contact for clients. All account managers will be in communication with the developers and designers and would report to the operations director. Development will be divided into two teams: Setup and Maintenance. Both consist of designers and developers. Recruiting and maintaining the team will be facilitated by open sourcing our software. All our hosting will be provided by XXX but we firmly believe that in a few years it will be cost effective to have our own infrastructure engineers and hosting service. Currently XXX have the global infrastructure to have our servers placed almost in any developed country. 17 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation The team growth would largely depend on the number of clients. Our growth is based on our current proven records. To manage the team we will have various directors to manage the business namely: CEO, Sales and Marketing, Finance, Technology, Operation, HR and Opensource and Innovation Director. The team of Directors will be built gradually during our expansion. Apart from directors we will outsource our marketing, legal and accounts to a company with knowledge of the global market. Exit Strategy <Company Name> has proven software to implement social networking needs for clients. With the relationships and global accounts we are convinced that we will add value with: • Intellectual Property • Bluechip Clients • User generated Content • Client Base • Scaleable platform for product proliferation and cross selling This will be invaluable to companies in: • Publication Sector. E.g.: XXX • Advertisers. E.g.: XXX • Service companies. E.g.: XXX Our exit strategy for investors is either to sell our company to one of these corporate based on our revenue and client base or undertake an IPO on one of the small cap markets. We will be an interesting exit proposition within 2-3 years. Recently the social networking field has gained a lot of momentum with an investment of Microsoft in Facebook evaluating it at $15bn. Recently two closed source social networking software providers, XXX and XXX received funding of $XXX and $XXX respectively. Both use templates and are restrictive in the customisation that can be achieved, by clients. Both are in a B2C market as oppose to <Company Name>’s B2B market. Open source (database) software MySQL is speculated to go for an Initial Public Offering (IPO). Similarly Bebo.com a social networking site predominately for younger audience is speculated to file for an IPO soon. Organisation Structure Current Structure <Company Name> Team now consists of eleven members: • CEO – XXX: Is responsible for day to day management of <Company Name>. In addition he also project manages (account manager) and leads the sales drive of the company. XXX is also responsible for <Company Name>’s product development • Technical Director – XXX: Is responsible for business development and evolving a future vision of the company. XXX is also responsible for the marketing and PR for the company. XXX in addition is also an account manager for some clients • Creative Director – XXX: XXX is responsible for conceptualisation and delivery of the front end of the projects. He is also instrumental in developing the usability of the software. 18 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation • Lead Developer – XXX: XXX is the principle coder and is responsible to deliver projects for current clients. XXX is also working on developing the open source framework for our expansion. • Lead Designer – XXX James: XXX is the principle designer at <Company Name> and is responsible for conceptualisation and delivery of the front end of the product. • 2 contract designers (part time) – XXX and XXX: Front end developer and designer. • 1 contract developers (part time) – XXX – Is a database and back end programmer. Law and Accountancy – We use lawyers XXX and accountants XXX. In addition we have a team of three non-Executive Directors. XXX: Is responsible for the strategy and vision for the company. He is also instrumental in advising <Company Name> on sales and marketing strategy. XXX: Is responsible for contracts and legal issues at <Company Name>. XXX also liaises between our lawyers and <Company Name>. Further he is responsible for company evaluation and developing the business. XXX: Is the principle Angel Investor in the business. Structure in 6 months In six months the number of clients we receive per month will grow 400% (based on our launch in San Francisco, New York and Tel Aviv). As this will require us to bring in more staff we expect to increase our team to ten developers and ten designers for development and maintenance of our client’s sites. In addition we will have four account managers and four sales managers in London/ XXX, San Francisco, New York and Tel Aviv. In terms of Executive Director we will have: CEO, CTO, Sales(and Marketing) director and Business Development. Structure in 1 year In 1 year the number of clients we receive per month will grow approximately 250%. <Company Name> will then employ 18 developers and 18 designers. In addition we will have 10 account and 10 sales managers. Our executive team will consist of CEO, CTO, sales (and marketing), business development, finance, operation and HR director. Structure in 2 years In two years we will have approximately 210 clients. We will then have 36 developers and 36 designers in our technical team. In addition we will have 15 sales and 15 account managers. Our executive team will remain the same and will continue to be based in the UK. 19 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation <Company Name>’s Journey <Company Name> was founded by XXX. The company raised a small round of Angel funding evaluating it at £XXX million. In just 10 months <Company Name> has XXX Bluechip clients in the Travel, Entertainment and Business (B2C) sectors. The sales process has been driven by XXX and the marketing has been driven by XXX. Most of the <Company Name>’s clients are globally recognised brands and were looking to improve their marketing and collect a user database using <Company Name>’s software. <Company Name> has now grown to a team of 12 members: • 3 Full Time Directors: CEO, Technical and Creative • 3 Non Executive Directors • One developer, designer and sales staff (intern) • Freelance designer, front end developer and (advertising) sales <Company Name>’s focus on working on effective marketing strategy and drive sales through appropriate PR and Marketing. <Company Name>’s clients are in 3 major sectors: • Travel: XXX and XXX • Business B2B Networks: XXX, XXX and XXX • Entertainment: XXX, XXX <Company Name> has taken a very strategic approach its pricing and sales effort.. This has allowed us to understand the market and add value to our software. At <Company Name> each project has provided us with invaluable knowledge of the sector we are targeting. We have built special social networking tools for each sector. For instance we prepared a Job Board for Highams PLC (Recruitment), Text Voting system for XXX etc. Our licence with these clients allows us to reuse the code and work with competitors. Clients: Month and Year Company Name Cost Number of users March 2007 XXX (part of XXX) XXX XXX April 2007 XXX (and XXX) XXX XXX May 2007 XXX XXX XXX June 2007 XXX XXX XXX July 2007 XXX XXX XXX October 2007 XXX XXX XXX November 2007 XXX XXX XXX December 2007 XXX XXX XXX Management Team XXX (CEO): Professional profile. 20 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation XXX (Technical Director): Professional profile. XXX (Non Executive Director): Professional profile. XXX (Non Executive Director): Professional profile XXX (Non Executive Director): Professional profile Finance <Company Name> is a social network website provider with a difference to web agencies. As discussed earlier <Company Name> has three sources of revenue: 1. Advertising 2. User Generated Content 3. Setup and Monthly Fee (Software) Evaluation: To roughly estimate the value for <Company Name>’s sale lets assume after 2 years with 208 social networks: 1 out of XXX social networks gains 0.5m users 3 out of XX social networks gains 200K users Rest XXX out of XXX social networks gain 10K users Total of XXX million users 21 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Estimations based on 3 sources of income: Advertising Advertising cost estimates = Number of Clients X Number of Ads X Revenues • Based on estimations on http://www.webmasterworld.com/google_adsense/3030598.htm Calculations • We know 1 million page views/month approximately generate £2,000/month • From XXX we see 1,000 users on the website do 231,261 page views in 5 months i.e. 46,250 page views/month • Hence 200,000 user would do 9.25 million page views i.e. £2,000/month X 9.25 = £18,500/ month • 500,000 users would generate £46.25,000/month • 10,000 users would generate £900/month Total Value = 1 X £46.25 + 3X 18.5 + 204 X 0.9 = £ 2.85m pa User Generated Content / Users Users’ in the Web2.0 are typically charged at $5/user on exit With 3.14m users we will exit at 3.14mX£2.5m = £7.85m Setup/Monthly cost With 208 clients at the end of 2 years we will earn: £20K X 208 (setup) + £1K (monthly) Approximately equates to £4.42m Total Revenue = £15.12m Media companies are evaluated at 6-10 times their EBIT, our assumption is that for <Company Name> is evaluated at 8 times: 8 X (Advertising + Setup/Monthly) + Users = £66.01m £66.01m will be our exit value at the end of our 2nd year 22 Mock Business Plan Produced by Raj Anand
    • Business Plan made by Raj Anand, Social Media Innovation Appendix 1 All press so far. 23 Mock Business Plan Produced by Raj Anand