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Investment Consulting Sample Business Plan

Using this sample business plan will assist you in starting up your own investment consultancy.

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Investment Consulting Business Plan

Executive Summary

Our firm’s hallmark investment product will be the Vista Total Market Equity strategy and will be initially offered through a mutual fund that is registered by the U.S. Securities Exchange Commission (SEC). Technological advancements also permit for other economically feasible distribution channels, such as separately managed portfolios for large accounts. The details of our particular investment product offerings are revealed in another section of this plan. However, it’s worth stating up front that we are extremely encouraged by a research piece to be published in the Journal of Portfolio Management, that supports the philosophy behind our primary product offering. Ennis Knupp, a premier institutional investment consulting firm, published a study called, “Failure of the Multiple-Specialist Strategy: The Case for Whole Stock Portfolios.” One of the underlying tenets is that specialization within equity portfolio management has gone too far; thus resulting in sub-optimal portfolios.

VISTA INVESTORS will be structured as a partnership designed to capitalize on industry research performed by one of the founding entrepreneurs, Michael Douglas, during his professional career in investment management research. Last year alone, Mr. Douglas conducted research visits at the investment offices of over 30 firms. In addition, he conducted literally hundreds of meetings with key investment professionals from around the globe either in person or via telephone conference. Mr. Douglas’s team presents this business plan as a “start from scratch” outline of what a successful investment management organization should look like as the industry evolves in response to political, social, technological, and other influences.

VISTA INVESTORS will offer high net worth or “angel” investors opportunity to assume minority ownership positions in exchange for contributions to VISTA INVESTORS’ operating capital and for providing seed assets to establish the investment products described herein. This document alone does not constitute an offer of any type, nor does it provide any guarantee, financial, or otherwise. Risks associated with the VISTA INVESTORS’ business plan are not limited to those detailed in this document.

1.1 Objectives

The purpose of VISTA INVESTORS is to create value for owners, employees, and investors via the establishment of an investment management organization designed for the Third Generation. The Third Generation is defined in a cutting-edge research effort by Merrill Lynch & Co., Inc. and Barra Strategic Consulting Group as a phase in the investment industry requiring a special set of capabilities for success. Our team has drawn upon this study, numerous other studies, and perhaps most importantly, our own experience in the industry, to define a plan for the success of VISTA INVESTORS.

1.2 Mission

Buy and sell decisions are implemented quickly and efficiently across all portfolios. Where applicable, a trading rotation is used to avoid any type of systematic advantage or disadvantage an account may experience. Under virtually no circumstances would we deviate from our discipline.

1.3 Keys to Success

Probably the single most important factor that defines success in the investment management business is performance. Thus, one of our primary goals is the achievement of a rating by Morningstar, an organization widely known by both individual and institutional investors for its marks of accreditation in the mutual fund industry. To be rated by Morningstar, funds must have a minimum performance history of three years.

Company Summary

VISTA INVESTORS will be structured as a partnership designed to capitalize on industry research performed by one of the founding entrepreneurs, Michael Douglas.

This company is unique because it differs substantially from the way most existing investment management firms originated. Most of the firms created in the last 25 years were started by the departure of portfolio managers from the nation’s largest banks, insurance companies, and brokerage firms. Generally, these individuals were deep in investment research talent but novice as it concerns the business and operating side of running an organization. The business plan for VISTA INVESTORS is different. VISTA INVESTORS is to be created by someone deep in knowledge of all aspects concerning investment management organizations. Investment talent will be acquired and retained by offering key individuals competitive compensation to include equity stakes. Biographies for individuals selected for the management team are enclosed.

Investment Philosophy

VISTA INVESTORS believes the goal of U.S. equity portfolios should be to outperform the broad market, as measured by the Wilshire 5000 or Russell 3000. Exposure to economic sectors will roughly approximate those of the benchmark. Our view is that any deviation from the benchmark represents a bet, or in our case, a calculated risk that will determine over or under performance. Portfolios will also maintain market cap exposure to large cap (>$10 billion), mid cap ($2 billion to $10 billion), and small cap (<$2 billion) securities. Like weightings to economic sectors, the weight of the portfolio allocated to large, medium, or small stocks represents a bet relative to the benchmark. On average, our portfolios will hold roughly 2/3 of their value in large cap stocks, and 1/3 of their value in mid and small cap stocks. This distribution among capitalization ranges represents a modest bet that mid and small cap stocks will outperform, consistent with studies showing small company stocks outperform larger companies in the long run.

We believe our process will be successful in the future for the following reasons:

  • It provides the opportunity to outperform the market without taking undue risks.
  • It does not concentrate heavily in a narrow segment of the market (e.g. small cap growth stocks, energy stocks, telecom stocks), thus portfolios are more likely to maintain a stable asset base when certain areas rotate out of favor and prompt redemptions.
  • It simplifies investor’s portfolios by reducing the number of managers or funds they need in their overall asset allocation.

A recent research piece by Ennis Knupp, a leading institutional investment consultant, provides support for what they call “whole stock” portfolios. They believe manager specialization has gone too far resulting in inefficient structures that provide index-like returns at excessive fees.

The decision-making process is one of consensus. The portfolio management team meets weekly to discuss the portfolio and any changes to it. In rare cases, if we fail to reach a consensus decision, the CIO will act as the arbiter, usually prompting for additional research, but if necessary, providing a final decision. Our investment model is one in which portfolio managers are also analysts. This concept of portfolio managers/analysts making decisions on a team was recognized and adopted for its proven success in a few select firms that have been extremely successful from both an investment and business perspective.

Portfolio manager/analyst responsibilities include idea generation, due diligence, and completion of research projects directed by the CIO. While each portfolio manager/analyst has experience in various areas, they are generalists in the sense that they are not assigned specific sector responsibilities. We find this allows individuals to remain stimulated by their jobs. At least one research assignment per month will be that of an in-depth review of an economic sector. We find this provides sufficient coverage per economic sector and enhances the team’s overall coverage of the broad market.

Market Analysis Summary

Much of our analysis focuses on the mutual fund segment of the investment industry because it is such a large component of the overall landscape. We have additionally provided information as it pertains to the management of separately managed portfolios (i.e. “separate accounts”). To understand the data here, one must understand that separate account managers must register their firms with the SEC. Thus, they are known as “Registered Investment Advisors.” For VISTA INVESTORS, the technologies we have selected will enable us to capitalize by utilizing both product types, mutual funds and separate accounts.

Our analysis supports the 20% to 25% projected growth rates by outside sources. Probably the most important aspect to these projections are the factors that will fuel these rates of growth. The following section contains some of the key variables to creating this growth environment. All are expected to have a positive impact on the investment industry for at least the next three years.

4.1 Business Participants

The number of participants in the investment industry is large. They range from providers of a single investment product to multi-product firms with literally hundreds, if not thousands, of investment product offerings. The several-trillion-dollar industry certainly has the size to support a large number of firms. However, many participants are not “complete” firms as it pertains to the capabilities required for success in today’s, but more importantly, tomorrow’s environment.

4.2 Target Market Segment Strategy

Our target market will be highly dependent on the stage of our product in its development cycle. Most of the marketing opportunity will occur beyond the first year of product development. However, some initial opportunities do exist. For example, the firm can utilize its transfer agent’s distribution services, which would put the product in a highly visible online platform. Additional opportunities include marketing to programs that invest specifically in “emerging managers.” Furthermore, the high net worth and retail marketplace can be accessed to a limited degree, even in the early stages, through similar creative opportunities and already-established relationships with clients.

Like manufacturing organizations, investment management firms must develop products to provide to their customers. This plan provides substantial market analysis to support the trends expected to occur in the field of investment management and the types of investment products that will be demanded. VISTA INVESTORS’ hallmark product offering will be the Vista Total Market Equity strategy, an investment product offering based on the evidence supporting investor’s desires to outperform the overall market via a single, diversified vehicle and to avoid the need to create complex investment structures such as those employed by institutional investors.

4.3 Positioning Statement

While it’s important to show some level of consistency with the latest trends in the industry, it’s more important to provide a solution that will stand the test of time. The decade of the 1990s is littered with examples in which individual investors have chased past performance and have sought unrealistically high returns by investing in recently hot investment vehicles, often concentrated in niche areas such as technology specific funds (e.g. Internet mutual funds) or style specific funds (e.g. small company growth mutual funds).

The hard learned lessons for individual investors are that past performance is no guarantee of future performance, and that the market tends to favor one area for a period of time only to unpredictably rotate in favor of another area at a later time. Additional support for our strategy comes from the tendency for individual investors to mimic the strategies they see utilized by the nation’s largest institutional investors (e.g. pension funds and university endowments). Because of their size, institutional investors allocate their assets to various portions of the U.S. equity market (e.g. large cap growth, small cap growth, large cap value, small cap value, etc.) by selecting investment firms and products that are specialized in certain areas. These structures are complex, and as research contained herein suggests, inefficient as it pertains to the average investor. In fact, a prominent investment consulting firm is advocating what they call “whole portfolio” strategies for institutional clients where the overriding feature is to reduce the inefficiencies they have observed in their institutional client portfolios.

We are extremely encouraged about the outlook for our total market portfolio strategy. One of the underlying tenets of Knupp study (mentioned in Section 1.0) is that specialization within equity portfolio management has gone too far; thus resulting in sub-optimal portfolios. Many portfolios piece together numerous managers, resulting in index-like structures at high fees that are incapable of providing the performance sought after by active portfolio management in the first place. In fact, the study estimates the annual cost to institutions of operating a multi-manager portfolio at 1.20%. This is a huge amount when considering the negative effects this would have on a portfolio held for the long-term. Additionally, we can state with nearly 100% confidence that this cost is even higher for individual investors. The prescription to institutional investors by the study is to embrace the entire opportunity set represented by an asset class via utilization of more simplified structure. Simply put, we concur.

We’ll go one step further to purport this is even more important as it applies to individual investors. The level of acceptance of “Whole Stock” portfolios among institutions remains to be seen. Some institutions may find difficulty with the concept simply because the large size of their portfolios makes it prohibitive to reduce the number of managers within their portfolios. However, this concept is one to be embraced by individuals because it simplifies their portfolios, while at the same time reduces the need for outside counseling. The trend toward more simplified portfolio structures is simply a reversion to the way things were prior to the specialized categories and labels developed for equity products over the last couple decades.

4.4 Service Business Analysis

The investment industry is a classic example of a traditional industry embracing technology to become more efficient. It is clearly fragmented, and while the past few years have seen some consolidation, fragmentation will remain due to the differentiation in investment products, both real and perceived. It’s important not to understate the complexities of this industry. While mature by some measure, a dynamic change (e.g. advancements in communications and other technologies) and a positive environment for investing have created opportunities that will perpetuate well into the next decade.

“The investment industry is complex. It has many moving parts and it’s experiencing dynamic change. If this was not the case, opportunity probably would not exist.”
– Mike Douglas

The beauty of investment management is that great economies of scale can be achieved with successful investment product offerings. When organized efficiently and provided with the appropriate technology and support services, the size and number of accounts becomes irrelevant. Essentially, the underlying portfolio (product) is the same. Additionally, related products can be easily derived from the main product platform. At a recent investment conference, the CEO of IOMEGA stated, “…derivative products are important in any industry.”

We would certainly agree. Thus, we have provided for introduction of closely related products to be launched during the later stages of our start-up (see Multi-Product Platform). These derivative products include a balanced product (our Total Market Equity strategy combined with a non-proprietary, fixed-income product), a large stock product (the large cap portion of our Total Market Equity strategy), and an extended market product (the mid and small cap portion of our Total Market Equity strategy). As an investment track record is developed, marketing opportunity expands. Additionally, a successful product can be leveraged into derivative products, thereby increasing asset gathering potential.

A study by Merrill Lynch shows that mutual funds with 4-star or 5-star ratings (the two highest levels) accounted for 74% of net asset flows over the last four years; however, there are virtually no guarantees when it comes to investment performance. This is evidenced by the SEC mandated disclosures attached to all mutual fund disclosure. If a firm takes all the steps to “stack the deck” in its favor, the probability of achieving the desired success is significantly increased. In the following sections we outline a plan that identifies the right people to execute the investment process within an environment conducive to efficient investment management practices. As it pertains to the investment management industry, a properly “stacked deck” (i.e. the optimal organization) is a competitive advantage that cannot easily be achieved by many of the firms in existence today for a variety of reasons.

4.4.1 The Three P’s

There are three P’s commonly associated with investment management organizations: People, Process, and Performance. The prior two determine the latter.

While this proposal highlights many areas (market research, financial projections, etc.), there are only two areas that will ultimately determine the level of success achieved by this group. The first is the people. Bright, energetic, talented, and knowledgeable individuals compose the core of the team presented to you. In addition, research explains that the most qualified investment professionals are attracted to efficient firms that are free from bureaucracy and that align interests via equity stakes. Process is the second critical element of this proposal. Cutting-edge research is provided in support of our portfolio management process. The implementation of our process is maximized by outsourcing virtually all functions not related to portfolio management and research, thereby exploiting the firm’s human capital.

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Auditing and Consulting Business Plan

Use this sample business plan to understand what should be included when starting a business that offers auditing and consulting.

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Auditing and Consulting Business Plan

Executive Summary

Artemide Auditing & Consulting AG (Artemide AC) is in the process of being formed as an ongoing sole proprietorship owned and operated by Sandor Artemide AC. The company is a spinoff of Daten Riffwald-Ennetmoos AG. Between the owners of Daten Riffwald-Ennetmoos and Artemide AC there will be 25% cross-participation. This plan is written as a guide for continuing and managing the business under the new company, and will also serve as the basis for marketing proposals. The two objectives of Artemide AC are to generate a profit and to grow at a challenging and manageable rate.

The mission of Artemide AC is to provide fast and reliable services in auditing and consulting to small and medium businesses (SMB), individuals, and other organizations.

The keys to success for Artemide AC are: visibility to generate new business leads, networking with other professionals, responsiveness, and quality.

The initial primary service offered will be auditing, although specialized fields will be considered in future growth.

The overall objective is to focus the activities towards the specialized services (analyses, investigations, startups, etc.) and to become a leader in this niche in the Luzern area. The company projects growth to be ~10% of sales in the next three years.

The most important keys to success for Artemide AC are developing visibility to generate new business leads, strong concentration on relationships with clients, and a high level of quality in our services.

The cooperation between Daten Riffwald-Ennetmoos and Artemide AC is flexible–with the objective to change rapidly if the market demands.

The sole proprietorship company “Sandor Artemide dipl. Wirtschaftsprüfer” was founded on 8 March 1996. In the first 10-month period, the company generated sales of $50,000.

Artemide AC is established in a separate office from Daten Riffwald-Ennetmoos AG, in Luzern. Secretary and telephone response is assumed by Daten Riffwald-Ennetmoos.

There are four major classes of competition in the actual fiduciary business in Switzerland. These include individual proprietors and small fiduciary and accounting offices and medium fiduciary offices with between 6 and 25 employees, these offices are available for general financial and tax consulting. There are also large auditing and consulting companies. These companies have several hundred employees. They tend to operate more in the lucrative consulting business. Banks, Assurances and other financial consultants are also new competitors in this field. Banks are now active in start-up consulting, corporate finance, mergers and acquisitions, and others.

Technology is, of course, very important to the success of Artemide AC. It is imperative that the company stay up-to-date on technological developments and it will be important to devote a reasonable portion of each year’s revenues toward upgrading the equipment and software used in normal operations.

Artemide AC will adopt a focused market strategy. Logical segmentation breaks the market down into the following: Individuals, Investors, Small Businesses, Medium Businesses, Large Businesses, and Authorities and Public Organizations. For our further development, we consider Individual persons and Investors plus Small and Medium Businesses to be crucial.

For our business, we do not have main competitors. We have a lot of widely-sized competitors in a vast market of services.This market environment gives ample opportunity for Artemide AC to create and expand a niche in the chosen market fields. Finally, worth noting is the growth trend for the general market, estimated between 5% and 10%, annually.

There are three different major opportunities (needs) in the fiduciary business over the next years:

  • Bookkeeping and other services related to the operative financial management (payroll, cost-accounting, accounting for pension funds, etc.).
  • Consulting and special mandates such as financial planning, business evaluation, merger and acquisition valuation, special audits, etc.
  • Legal Auditing (incl. IAS and other standards) as an independent and responsible institution.

In addition, the company sees three primary market trends which seem to be most important in our business.

  • Rapid growth in the complexity of business that requires rapid adaptation in the strategy and structures of companies.
  • More litigation due to higher percentages of unsuccessful ventures.
  • The growth of outsourced financial consulting.

All of this provides continuing opportunities for a dynamic company such as Artemide AC.

We believe our business is in a grand change. The competitors must be generalists and specialists at the same time. For small and medium fiduciary businesses, a focus of one primary segment of business is necessary. For example, if the “core” business is accounting, the other fiduciary businesses like tax, auditing, consulting must be reduced to a general level. In the core business, the company must be current with the services, while having the capacity to innovate (like new accounting services related to the Internet).

Artemide AC’s competitive edge is in the well-established reputation of Sandor Artemide who has been in the consulting business for over a decade, and the company’s ability to focus in this niche market.

The company’s sales strategy will be based on building long-term customer relationships, which will result in repeat sales. The company estimates that revenues will be approximately $232,000 by Year 3, yielding profits. The company will manage its assets and create profits with no debt financing. It does not anticipate any cash flow problems. Sandor Artemide, the majority owner of Artemide AC, will assume strategic management functions. Brigitte Artemide will be in charge of market research and customer support. Since no major increases in personnel are expected in the next three years, Mr. Artemide will retain his managerial functions throughout these years.

1.1 Mission

Artemide AC’s mission is simple and straightforward:

  • Purpose – Artemide AC exists to provide complete, reliable and high quality services to SMBs, individuals, lawyers, and authorities. Services must give solutions and results!
  • Vision – By providing innovative services, Artemide AC generates a name in Luzern and the surrounding area.

1.2 Keys to Success

The keys to success for Artemide AC are:

  • Developing visibility to generate new business leads.
  • Relationships with clients (developing loyal, respectful, and intensive contact with both clients and potential clients).
  • Marketing/strategy and networking with other professionals.
  • Collaboration with Daten Riffwald-Ennetmoos AG for generally fiduciary services and IT services.
  • Responsiveness to clients (fast response time for special problems).
  • Quality (especially in reporting information).
  • Excellence in fulfilling the promise.
  • Openness: languages and willpower for creating interregional and international contacts.

1.3 Objectives

The objectives of this business plan are:

  • To provide a written guide for managing this business; a strategic framework for developing a comprehensive tactical marketing philosophy.
  • This plan is not intended to obtain financing, it is purely for internal improvements.
  • The scope of this plan is to provide detailed monthly projections for the current plan year, as well as yearly summaries for the following two years.

The objectives of Artemide Auditing & Consulting are:

  • The overall objective is to focus the activities towards the specialized services (analyses, investigations, startups, etc.) and to become a leader in this niche in the Luzern area.
  • Cash flow – To generate sufficient cash flow to finance future growth and development, and to provide the resources needed to achieve the other objectives of the company and its owners.
  • Growth – To expand the business at a rate that is both challenging and manageable, serving the market with innovation and adaptability. (Growth projected at 10% of sales in the next three years.)

Company Summary

Artemide AC will be an ongoing company from the sole proprietorship company Sandor Artemide dipl. Wirtschaftsprüfer with the following characteristics:

  • The goal will be to continue the activities on a larger personal and organizational basis, still with no debt financing.
  • Artemide AC will assume operations of one of the Daten Riffwald-Ennetmoos AG’s divisions.
  • Between the owners of Daten Riffwald-Ennetmoos and Artemide AC there will be a 25% cross-participation.
  • The cooperation between Daten Riffwald-Ennetmoos and Artemide AC is flexible–with the objective to change rapidly if the market demands.

2.1 Company History

The sole proprietorship company “Sandor Artemide dipl. Wirtschaftsprüfer” was founded 8 March 1996. In the first 10-month period, the company generated sales of $50,000.

In the time of general recession, between 1996 and 2000, with a concentrated basis work, the owner created and assured his independent existence. The name Artemide was made known, and he has established a good professional reputation in Luzern.

Before starting his own business, Sandor Artemide acquired extensive professional experience as listed below:

  • 5 years ATAG Graff & Altern in Geneva, Switzerland.
  • 3 years Ziegfeld in Bern, Switzerland.
  • 4 years KUGN in Bienne, Switzerland.

2.2 Company Ownership

Artemide Auditing & Consulting AG will be incorporated in the city of Luzern by Sandor Artemide, who will be the majority owner. Twenty-five percent of the company will be owned by Daten Riffwald-Ennetmoos AG, the parent company.

2.3 Company Locations and Facilities

Artemide AC is established in a separate office from Daten Riffwald-Ennetmoos AG, in Luzern. Secretary and telephone response is assumed by Daten Riffwald-Ennetmoos. In the same building, on the first level, is established ATO Geistesblitz (sale and consulting of SMB software sage-KHK).

The structure is well established and satisfies the needs of both Daten Riffwald-Ennetmoos and Artemide AC. Both companies intend to optimize the office location in the future.

Services

Artemide AC will be the number one company in the Luzern area for specialized and investigative services in the modern business environment. Artemide AC also offers both classic, auditing, and general consulting services.

Artemide AC will offer three main services – Auditing, Consulting, and Investigation.
There appear to be four main classes of competition, as indicated under section 3.2.
Fulfillment of services will be provided in the future by Sandor Artemide and other equally qualified professionals.
It’s important to be current with the classic and special business software.

Detailed descriptions of these points are found in the sections below.

3.1 Service Description

Artemide Auditing & Consulting AG offers three main services:

  • Auditing – Financial data must be checked and confirmed, we consider this normal, as a service related to auditing. Most of these services are legal audits in the sense of Swiss company law. A Legal Audit is the most comprehensive assessment of the presentation of financial data. By contrast, a Review is generally prepared for the assurance of the management and as a minimum requirement of financial institutions for the propose of extending credit. Finally an analysis is limited on the plausibility and the ratios. An Analysis is normally based on audited or reviewed financial statements. An essential part of all audit activities is understanding the business environment in which a company operates and to evaluate the risks of financial losses. In fact it’s necessary to check past financial statements, but the key for a modern audit is to have time to move from an accounting approach to a planning approach–from present to future.
  • Consulting – Includes business planning, business evaluation, merger and acquisition, start-up planning, restructuring, and business-succession planning, etc.
  • Investigation – Our auditing and business expertise provides us with the ability to perform analysis, specialized audits, and valuation of businesses in business disputes, fraud, or other cases of incertitude and disputes.

3.2 Competitive Comparison

There seems to be four major classes of competition in the actual fiduciary business in Switzerland:

  • Individual proprietors and small fiduciary and accounting offices. The primary business of these competitors is accounting and tax compliance (for individuals and companies). This offices normally employ between 1 and 5 people. These offices deal in a large spectrum on a general level, but without specialization. These offices are often members of the STV.
  • Medium fiduciary offices with between 6 and 25 or more employees. These offices are also dealing in a large and general spectrum. If there are several partners–with different formation and specialties–these offices are available for general financial and tax consulting. This offices are member of the STV or/and the TK.
  • Large auditing and consulting companies. These companies have several hundred employees. They tend to operate more in the lucrative consulting business. Public companies are normally audited by these companies. Large companies are normally not interested in dealing with small and medium business. All large companies have an international network.
  • Banks, Assurances and other Financial Consultants are new competitors. Financial services are “in.” Banks are active in start-up consulting, corporate finance, mergers and acquisitions, and others.

3.3 Fulfillment

The fulfillment of services was provided in the past by the owner himself. The ultimate delivery was the owner’s expertise and problem solving capability, coupled with an open mind and ease of communication. The end result is an established trust with complete customer confidence and satisfaction.

In the future, the clients must also accept the work of other qualified personnel–it is necessary to transfer and expand the established personal goodwill into company goodwill. This will only be possible with qualified and motivated employees.

3.4 Technology

Technology is, of course, very important to the success of Artemide Auditing & Cconsulting. It is imperative that the company stay up-to-date on the technological developments in the classic business software like MS-Office, etc. as well as in the special software and tools for auditing, financial planning, business planning, etc.

In addition, it will be important to devote a reasonable portion of each year’s revenues toward upgrading the equipment and software used by Artemide AC in its normal operations.

Market Analysis Summary

Artemide Auditing & Consulting AG will adopt a focused market strategy.

  • Logical segmentation breaks the market down into the following: Individuals, Investors, Small Businesses, Medium Businesses, Large Businesses, and Authorities and Public Organizations. Descriptions are provided below.
  • The largest and most logical target markets for Artemide AC at the present are small and medium businesses. In a new “Financial Industry” Individuals and Investors become an important market segment.
  • For our business, we do not have main competitors. We have a lot of widely-sized competitors in a vast market of services. This market environment gives ample opportunity for Artemide AC to create and expand a niche in the chosen market fields.
  • Finally, worth noting is the growth trend for the general market, estimated between 5% and 10%, annually.

4.1 Target Market Segment Strategy

For our further development, we consider the following market segments to be very important:

  • Individual persons and Investors.
  • Small and Medium Businesses.

Artemide AC will focus its marketing strategy primarily on these market segments.

4.1.1 Market Needs

There are three different major opportunities (needs) in the fiduciary business over the next years

  1. Bookkeeping and other services related to the operative financial management (payroll, cost-accounting, accounting for pension funds, etc.).
  2. Consulting and special mandates.
  • Financial-Planning
  • Business-Planning
  • Business-Evaluation
  • Merger & Acquisition
  • Startup-Planning
  • Restructuring
  • Business Succession-Planning
  • Coaching in Financial-Managing
  • Recovery
  • Special Audits, Reviews
  • Analyses
  • Investigation, Forensic Services
  • Other
  • Legal Auditing (incl. IAS and other standards) as an independent and responsible institution.

We think that the need for consulting and other specialized fields has a strong growth potential.

4.1.2 Market Trends

Three primary market trends seem to be most important in our business:

  • Trend 1- (most important) Rapid growth in complexity of business in an ever-changing market and competitive environment needs continuous and rapid adaptation in both strategy and structures of companies.
  • Trend 2- (moderately important) In the future there will be a percentage of unsuccessful ventures resulting in more litigation, which, in turn, will emphasize the need for specialized audits, investigation, restructuring, etc.
  • Trend 3- (least important) Predicted continued growth in consulting because companies will be unwilling to pay fixed costs of salaries, choosing instead to treat specialized financial knowledge and needs as variable costs from external sources.

Economically it is more expedient to acquire specialized services from a consulting firm that has its own specialized employees.

4.1.3 Market Growth

As noted in the previous section, several factors are predicted to continue well into the next decade, not the least of which we estimate the annual market growth rate between 5% and 10%.

4.2 Service Business Analysis

The fiduciary and consulting business for the local area is already well established, yet still allows ample opportunity for us. This is supported by the following points:

  • Already in existence are a large number of firms – we think that most of the small and medium firms are operating in a limited spectrum of traditional fiduciary services (accounting and tax) and they do not have enough knowledge and/or time for entering the field of specialized services  – so we have new participants like banks, assurances, lawyers, and others entering the market.
  • Customers in the fiduciary business tend to be loyal, relying on the same consultant for future needs once a relationship has been established – this fact requires establishing a good and intensive personal relationship with client. This, in the large, “big 6,” firms, is often not realizable because of staff turn over and inaccessibility of personnel.
  • The globalization of markets will increase the demands for expansion of new services related to our business.

We believe our business is in a in a period of grand change. The competitors must be generalists and specialists at the same time. For small and medium fiduciary businesses, a focus of one primary segment of business is necessary. For example, if the “core” business is accounting, the other fiduciary businesses like tax, auditing, consulting must be reduced to a general level. In the core business, the company must be current with the services, while having the capacity to innovate (like new accounting services related to the Internet).

For our business, we do not have main competitors: We have many competitors in diversified services. More important than the competitors, is the need to get established in the right market and to develop this market with a strong and flexible strategy.

4.2.1 Competition and Buying Patterns

Competition in the general field of business consulting in the Luzern area is quite intense. Although numerous established companies offer a variety of services to different customer segments, Artemide Auditing & Consulting AG considers competition in our focus market niche of small and medium businesses to be modest. Customers in this segment strongly rely on the consultant’s professional qualifications and the ability to come up with viable solutions in a time- and cost-effective manner.

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Consulting Seminars Sample Business Plan

If starting a business that offers consulting seminars appeals to you then this sample business plan will provide you with all of the right information.

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Consulting Seminars Business Plan

Executive Summary

Seminars is a focused seminar company that offers a powerful combination of seminars along with the software to make them useful. It is being founded in Eugene, OR. It will offer business plan seminars and business plan software together.

1.1 Mission

Seminars in business planning and related subject areas offer their participants an accelerated learning environment including both tools and the know-how to use them. This is a focused educational experience that short-cuts normal business schools with the fundamental knowledge required, in a practical setting. The business provides a comfortable living for its owners, fair compensation to employees, and a creative, healthy work environment.

1.2 Keys to Success

  • Repeat business with corporate customers.
  • Seminar-oriented sales and marketing to generate people in the seats.
  • Leveraging on sales and marketing alliances.

1.3 Objectives

  • Achieve cash flow self sufficiency by the end of the first year.
  • Repay debt from original financing by the end of the second year.
  • Provide an income for founder-owner with income growth possibilities.
  • Sales of $200K in the first year.
  • Sales of more than $500K by the third year.

Company Summary

Seminars is a focused seminar company that offers a powerful combination of seminars along with the software to make them useful. This company is about realizing the potential of its founder, John Doe, to develop his skills and knowledge into a viable business.

2.1 Start-up Summary

Start-up costs and initial financing are shown on the following table. John Doe will be investing $25,000 of savings and guaranteeing a loan for another $30,000 with personal assets. The Web development vendor, Designato, has agreed to develop the website for $10,000 to be paid in a year’s time. That will go on the books as an interest-free loan.

2.2 Company Locations and Facilities

Seminars will be located in Eugene, OR. Eugene is not an ideal location for a seminar business, because it is not within any major market; but local costs are lower than average, and it is striking distance from Seattle, San Francisco, Los Angeles, and of course Portland, OR. The main consideration is that the founder lives in Eugene, and this business is for his benefit.

2.3 Company Ownership

At its initial stages, Seminars is a sole proprietorship owned by John Doe, founder and president. It will be registered with the county as a fictitious business name. We will move up to incorporate as recommended by our attorney later, based on growth of the business and conditions as they arise.

Services

The founder likes public speaking, and particularly likes his hands-on seminar-and-software combinations that develop business planning by providing not just the know-how, but the tools as well, to help people in business plan better.

He’s done a lot of it. He’s given full-day business planning seminars in the U.S., Mexico, Japan, Thailand, Singapore, Hong Kong, Argentina, Chile, Colombia, Venezuela, and Puerto Rico. He’s also done them at SBDC sites in four states, and at business schools including University of Oregon, Harvard, and UC Berkeley.

We won’t use seminars to sell software. We hate the use of seminars as thinly-disguised sales pitches. Instead, we insist on bundling the software into the seminar so we can focus on the real task at hand, the tools provided, and how to get the most out of them. If we don’t have time for the full hands-on treatment, or the event calls for a more general discussion of business planning, I’ll still take the date but the discussion will be more general. We won’t include product details or a sales pitch.

We can’t teach business planning in a one-day seminar. We can, however, achieve basic familiarity with the process and the tools. We can also break down the fear. Sometimes the hardest thing about a business plan is getting started. As participants walk out of one of these sessions, they walk out armed with not just the desire to follow up and make it work for their business, but also the tools to make it happen. The software used in these seminars is very high quality and professional business and marketing planning software, each the market leader in its category: Business Plan Pro, Marketing Plan Pro, and Web Strategy Pro.

3.1 Service Description

Business Planning

We’ve done speaking and seminars on developing a business plan in more than a dozen countries, as well as all over the United States. I’ve spent more than 20 years developing business plans, writing about business plans, and developing software to help people develop business plans.

Marketing Planning

As co-authors of the book on Marketing Plans (On Target) we can take a group through the process with emphasis on real-world practical planning, with implementation built in.

Entrepreneurship

How to start your own business, business start-ups in general, managing the start-up company, the process of developing and financing a new business.

Developing a Web strategy

John Doe has been involved in a very successful Web business, with complete download store, hundreds of affiliates, revenues and profits.

3.2 Competitive Comparison

Business plan seminars run from free seminars intended to sell products or services to high-end seminars sponsored by the American Management Association and similar organizations. We don’t feel that the market is well covered. For a broader view of competition, we look at both other seminars and other competing offerings of similar tools and know-how:

  • Books.
  • Magazine articles.
  • Classes in local junior colleges, night school, business schools.
  • Stand-alone software.
  • Low-end, often free entrepreneurial seminars. Some are offered by Small Business Development Centers (SBDCs) for little or no money.
  • Professional seminars for $100 or more.

3.3 Sales Literature

Our main sales literature is the website at www.[omitted].com. Sales literature is obsolete for our purposes, we use the website to explain and back up.

3.4 Fulfillment

Seminars presentations will only be given by true experts, either John Doe himself or substitutes with proven track record, academic background, and practical business experience. They must be good speakers and good seminar leaders. We cannot afford to have anything but the best.

Seminars should always be delivered with projection of presentation materials through a projector. Seminars more than three hours should always be delivered with at least one computer per every three participants, so they can follow along with the software. We cannot afford to compromise quality with second-rate delivery. Always the best equipment, always well prepared, well rested, and well delivered. This is vital.

3.5 Technology

Laptop and projection are absolutely essential. We’ll upgrade the technology as better becomes available. For now at least that’s enough to guarantee a minimum level.

3.6 Future Services

We will remain aware of new technologies that might lead to new services, such as the online seminar or video/CD seminar, that can be packaged and made available to our clients.

Market Analysis Summary

There are several separate markets for this kind of seminar:

  1. Corporations with interest in improving the planning of groups or individuals either inside the corporation or related to the corporation. The most obvious are the larger corporations that market through separate channel entities, such as distributors selling to dealers, manufacturers selling through dealers.
  2. Owners and managers of smaller- or intermediate-sized businesses.
  3. Individuals looking to either start their own businesses or improve their business planning skills and knowledge.

4.1 Target Market Segment Strategy

  • For the corporate market we need to focus on specific companies with specific opportunities. They should all be companies that work with independent channel points, because these are the most likely buyers. Channel development or channel marketing is the main job area for the first push.
  • For small and medium businesses we need to focus on organizations that can lever our market offering: the American Management Association, for example, the AICPA, trade associations and industry associations, perhaps some magazine publishers if they survive the 2001 shakeout.
  • For individuals we need to lever off organizations that cater to individuals looking to start up their own businesses: that might include SBDCs and publications, websites such as www.bplans.com, and others.

4.1.1 Market Trends

It’s hard to find businesses dedicated to developing this kind of seminar. In general, seminars are an additional revenue generator in businesses or organizations that have other major objectives. For example, seminars are developed and offered by SBDCs, the AMA, chambers of commerce. As a result, market trends are unclear. Has the development of software affected this market? We’re not sure. Larger well-organized seminar businesses have not developed.

4.1.2 Market Growth

We have no indication of market growth in this pulverized and diffuse market. No statistics are available. What we do know is that there is growth potential, and plenty of potential market.

4.1.3 Market Needs

The underlying need is accelerated learning. Developing business plans isn’t a skill people normally include in standard curricula for standard education, it is a skill considered ad-hoc, a specialized skill developed and exercised for a specialized task.

Those who don’t have time for academic learning still need to develop business plans, and the seminar gives them a chance to gain familiarity in a few hours. Combined with business plan software, they can move forward and reduce the fear, break the pattern of procrastination, and move ahead with their planning. In some market niches, seminars may serve their participants as continuing education required by professional licensors. This could be true for CPAs, for example, or attorneys.

In the large corporation context, there are additional market needs. Companies that market through channel partners need three things related to business plans:

  • Business information from the channel partners about business conditions, plans, projections, and business programs.
  • Consistency of numbers, definitions, business models, forecasts, and analysis.
  • Useful realistic planning.
  • Occasions suitable for regular meetings with events–such as business plan seminars–that can attract independent small businesses to attent those meetings. They use the meeting to announce new products, marketing programs, etc. Meetings are often held in attractive vacation locations so channel partners can combine business with vacations.

4.2 Service Business Analysis

The business plan seminar business is very diverse. It ranges from the high end, colleges and universities and some consulting companies offer serious multi-day seminars in planning and strategic planning for hundreds and even thousands of dollars.

4.2.1 Competition and Buying Patterns

  • At the high end, colleges and universities and some consulting companies offer serious multi-day seminars in planning and strategic planning for hundreds and even thousands of dollars.
  • There are also very serious seminar offerings from organizations such as the AMA, AICPA, etc. These tend to cost above $500.
  • Useful seminars are offered as well by SBDCs, smaller colleges and universities, community colleges, and even high school night school programs. Many of these are free, or close to free.
  • There are also related seminars offered by vendors of get-rich-quick schemes and multi-level marketing programs. These unfortunately add noise to the market, confuse potential participants between real value and thinly-disguised sales pitches.

4.2.2 Main Competitors

The way this business is positioned, we should try to work with our main competitors, instead of compete with them. AMA, AICPA, and business schools could be co-sponsors and allies rather than competitors. Other competition would be business plan consultants, and in a sense all low-end business plan seminars.

4.2.3 Business Participants

The business plan seminar business is very diverse. It ranges from high-end seminars lasting more than a day and costing more than $1,000, to free sales pitches intended to draw would-be entrepreneurs for the purpose of selling products.

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Business Consulting Sample Plan

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Business Consulting Business Plan

Executive Summary

Growth Management and Strategies (GMS) is an ambitious innovative new company that is attempting to turn the small business consulting business on its head. With an experienced consultant at the helm as President, GMS intends to grow at more than 50% per year through solid customer service, a great sales plan, proven competitive strategies, and a group of people that bring dynamic energy to the company and the sales process.

The goal for this plan is financial: GMS needs a Small Business Adminstration (SBA) loan, and this document is one step in the process. It is also a road map for the company. The document gives all present and future employees, as well as the owner a sense of purpose that may exist without the business plan, but becomes more relevant after the business plan is written, reviewed, shared, and edited by all. It is a living document that will last far beyond the SBA loan purpose, or if that doesn’t occur, to bring an investor on board.

GMS’s financials are realistic, and based on very conservative sales figures relative to the industry as a whole. That is because one of the goals of GMS is to build the business one client at a time, and to serve each client as if it were the last. This is how loyalty is generated, and cultivated. Customer service is what GMS will do best, and is a large part of the company’s overall mission.

1.1 Objectives

The objectives for Growth Management and Strategies are:

  • Gain access to an SBA loan upon start up.
  • Grow the company from 2 employees in Year 1, to over 10 by Year 5.
  • Increase revenue to over $3 million by Year 3.
  • Increase client base by 450% in three years.
  • Maintain job costing that keeps margins above 70%.

1.2 Mission

The company mission is to serve small business clients that are in need of logistical, technical, and business strategy services. All projects will be chosen based on the availability of human resources, and each individual employee will be given the respect of a contract worker, and will share in profits for each job. Politics have no place at Growth Management and Strategies, and to limit the affects of favoritism, the company will implement and clearly communicate a performance review policy that applies to those at the bottom as well as the top of the leadership ladder. Credit will be given to the person who performed and/or innovatively modified a project, and compensation will be both financial and in the form of commendation.

Growth Management and Strategies is a company that respects the needs and expectations of its employees and clients. If either is compromised, adjustments will be made so that the company culture may remain intact.

1.3 Keys to Success

Our keys to success are:

  • To maintain client satisfaction of at least 90%.
  • To keep overhead low.
  • To ensure professional marketing and presentation of services.
  • To provide an active and functional website.

Company Summary

Growth Management and Strategies was established as a C corporation. The company’s headquarters are located in Boston, MA, near Copely Place. The company was established as a result of the efforts of its owner, Bill Dawson, and his experience in leading small businesses into prolonged periods of growth and innovation. Dawson worked for McKinsey before being hired away to Bain and Company. A Harvard graduate, Dawson spent hundreds of hours each week for nearly a year, slowly building the company to where it is now.

The company has had numerous successes this year, including one client that was purchased by a major multinational conglomerate, and another that experienced product sales growth of over 700% the first year.

2.1 Start-up Summary

This start-up summary table lists all the costs associated with establishing a lease, purchasing office equipment, and pulling together the other resources necessary to get the business off the ground. Furniture, LAN lines, and additional technology purchases are a must in order to properly communicate with clients, and to establish a website.

Other services included in the start-up summary are legal consulting fees, kept to a minimum thanks to resources provided by Nolo. Incorporation fees are included in the legal fees line item.

The free cash flow (cash balance) appearing in this start-up table is high relative to other small consulting businesses of its size. The owner is preoccupied with maintaining positive cash flow, and is risk averse enough to understand that during months in which contracts are not available, the corporation must sustain itself.  With this said, planned debt leverage is low, therefore risk to the lender is relatively low as well.

2.2 Company Ownership

Growth Management and Strategies is wholly owned by Bill Dawson, and is classified as an LLC.

Services

Growth Management and Strategies offers a variety of services to the small business client. Many of the services are customized for each client, and a bidding process is observed. The company also offers a traditional fixed rate sheet for its services.

Market Analysis Summary

The target customer owns a small business, and is generally dissatisfied with the revenue that the business is generating, or is dissatisfied with the daily management of their business. The customer is likely to operate a business worth between $200K and $10 million, with growth rates of between 1-10%, or even a negative growth rate.

Market growth, that is, the predicted growth in the small business sector within the Boston/Cambridge Metro area is expected to be around 3% per year. This may increase due to additional SBA lending programs designed to match the strengths of research and faculty grant work with the needs of the market and small businesses willing to take new products to market. Regardless of the market growth, the company’s customer base is far more dependant upon service needs, and a solid reputation. Mr. Dawson is well respected within the community, and has built a number of relationships with high profile individuals, and is a frequent contributor to the business section of the Boston Herald.

The corresponding market analysis table below breaks the potential market down into tactical sub-markets.

4.1 Market Segmentation

The market is divided up by revenue in the initial analysis, although other factors are very significant. It is important that the client business is operating at about the same level as the general economic growth rate, or is underperforming. The need for a turnaround within the client company is necessary for Growth Management and Strategies’ expertise to become useful. The following are other differentiators:

  • Debt of more than 30% yearly revenue.
  • Free cash flow frequently in the negative, requiring deep pocket borrowing or investment.
  • Long-term growth underperforming relative to competitors.
  • Management discord and performance issues.

These are not the only differentiators used to determine the market potential for a client, they are simply a starting point for the sales team as they reach out to this group of small businesses, owners and investors.

4.2 Target Market Segment Strategy

The target market strategy involves isolating potential customers by revenue, then drilling down to very specific needs via the sales team’s needs analysis methodology.

The first tier customers, businesses with over $3 million in revenue, is more experienced in outsourcing and may find themselves more comfortable hiring Growth Management and Strategies on retainer. Strategically, a retainer helps maintain consistent cash flow, even if during some months these customers will require more services than what they have paid for that month. This issue will be addressed in the Personnel topic.

The second tier customers, those businesses operating at revenue levels of $501K – $3 million, typically are very excited to have moved out of the home office stage, and into a new level of stability. If they are self-funded, these businesses can be the most challenging to work with because they are often not willing to part with company shares, and don’t yet have a sense of what kind of marketing investment is necessary to grow a business at this stage. The company will serve these small businesses based on a bid cycle, and needs analysis.

The third tier customers are easier to identify, and more ubiquitous than the rest. These small businesses are operating on $200K – $500K in revenue, often are operating out of a home, and have a firm sense of their market and potential, yet have trouble executing their plans effectively, or following through on growth strategies that generate wealth. Again, the strategy is to provide these businesses with a short needs analysis, and focus on the quantity of such customers to maintain a solid revenue stream.

4.3 Service Business Analysis

This industry is split up between a variety of players, including small businesses advising small businesses, such as the case with Growth Management and Strategies, to large conglomerate multinational consulting firms that send in newbie MBAs and use their name recognition to convince their clients that every one of these MBAs will generate over $300K a year in value. Sometimes they do, but when they don’t, GMS plans to be there.

At the other end of the spectrum, there are a wide variety of mom and pop consulting firms owned by very talented people who simply don’t have the marketing resources or expertise to reach a broader spectrum of customer.

GMS is somewhere in between. With years of guerrilla marketing experience, and a long-term plan for success, Mr. Dawson is determined to build the company each client at a time, and to focus on a sales team that outperforms all the competitors.

GMS is planning to grow exponentially within the first two years, to over $2 million in consulting revenue. At this point the service business analysis will be re-evaluated from the outside in.

4.3.1 Competition and Buying Patterns

Typically small business clients will learn about the consulting services market through word-of-mouth experience passed on through a friend or contemporary. Still, outbound sales teams dominate this category, and the stronger your sales team and name recognition, the greater your odds of finding clients willing to place your company on retainer or accept your company’s bid. The most competitive players in this market tend to have some of the best sales teams in the industry, that is, people who know not only how to communicate the technical needs analysis in a non-technical way, but in addition, are able to follow through and execute on promises and provide accurate, industry specific information that is useful to the client even before the deal is made.

Price is also important, and operates on a complex tiered system that is dependant upon the effectiveness of a particular salesperson, the word-of-mouth (WOM) advertising already in the mind of the potential client, and the ability of the client to reform the way they think about their own business. The demands of turning a business around, or pushing it to the limits of its potential are in direct proportion to the price of each bid. GMS must be careful not to be lured into out bidding a competitor, only to find that the customer has no plans to modify their business plan, and are seeking a “magic bullet” that may or may not exist. Competition in this industry leads to frustration and burnout for many people, and it takes a strong sense of purpose to push the business beyond the realm of the high-intensity, low-return client.

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