Competency Based Staffing Business Plan

CompetencyBased Staffing Business Plan

InstitutionAffiliation

Tableof Contents

1.0 Executive Summary 2

1.1 Company Mission 3

1.2 Company Objectives 3

1.3 Keys to Success 3

2.0 Company Summary 3

2.1 Industry History 4

2.2 Company Location 4

2.2 Company Ownership 4

2.3 Managerial Structure 5

2.4 Products and Services 5

3.0 Market Analysis 6

3.1 Target Market 6

3.2 Industry Analysis 6

3.3 SWOT Analysis 9

4.0 Market Strategy 10

4.1 The 4Ps CBS Marketing 10

4.2 Product Pricing 11

4.3 Promotional Strategy 12

4.4 Sales Forecast 13

5.0 Implementation Strategy 14

5.1 Overall Implementation Strategy 14

5.2 Monitoring and Evaluation 16

6.0 Financial Statements and Projections 16

6.1 Forecasted Profit and Loss Statement 16

6.2 Balance Sheet 18

7.0 Financial Report 19

7.1 Financial Projections 19

7.11 General Assumptions 20

7.2 Current Financial Position 21

7.3 Estimated Capital and Investments 23

References 24

1.0Executive Summary

CompetencyBased Staffing(CBS) is a human resource-consulting firm in Virginia, Atlanta. CBSoffers a wide range of human resource consulting services and targetsthe emerging company segments while striving to retain the existingclientele base. CBS offers its clients the capability to offer stockoptions to their employees that is mainly targeted at new companiesthat have difficulties in mobilizing resources. Dr. Jimmy Grad, thepresident and owner of CBS will use this business as a firm base toleverage his professional networks to generate business forCompetency Based Staffing. The business seeks to grow its prospectsin the next few years and the chart below highlights the projectedperformance for the next three years of operation.

Figure1.0: Projected Performance for the next three years

1.1Company Mission

Themission of CBS is to provide human resource-consulting services for awide range of companies in both service and manufacturing sectors.The business seeks to enhance customer satisfaction by setting thehighest standards of excellence by providing high quality service toclients in a friendly and competent manner.

1.2Company Objectives

Withinthe first three years in operation, the company will seek:

  1. To create a consultancy-based firm with customer satisfaction as the operational element

  2. To broaden the CBS clientele base by 30% every year through the provision of high quality services.

1.3Keys to Success

  1. Customer satisfaction through provision of services tailored to customer needs.

  2. Offer fair pricing services through discriminatory pricing policies.

  3. Ethics and professionalism

    1. Company Summary

Thissection provides company attributes encompassing the immediateoperational environment, company ownership, company products andservices, company location and managerial structure.

    1. Industry History

Theprofessional services industry in Atlanta has been growingexponentially following the increase in the number of companies aswell as the increased income levels. The increase in corporate andindividual demand for professional services has been attributed toincreased welfare of the middle class economic entities.A survey conducted in 2007 revealed that there were 50, 970registered companies in Atlanta (US Census Bureau,http://quickfacts.census.gov/qfd/states/13/1304000.html,accessed on 25thJuly 2015).This number has grown considerably in the past few years and theprospects for the professional services sector are more positive.

2.2Company Location

CBSbusiness premises will be located at the heart of Virginia in Atlantaalong 1605 Virginia Avenue. The business will utilize the facilitiesat the Housteene Business Park pending official transfer of thepremises to the CBS management.

    1. Company Ownership

CompetencyBased Staffing(CBS) is projected to be a Limited Liability Company complete with aseparate legal entity. All shares of the company are currently inpossession of the president and owner Jimmy Grad. The futureintention is to use these shares other shareholder investmentsthrough initial public offers (IPO). Considering that additionalcapital is raised as prescribed in the financial section of the plan,Dr. Jimmy Grad will retain ownership of 50% of the company shares.

2.3Managerial Structure

Dr.Jimmy Grad will be the Chief Executive Officer of CBS. Departmentalmanagers who will all submit to the CEO will characterize the CBSmanagement structure. The departmental managers will be primarilyresponsible for the business operations and objectives directly undertheir jurisdictions.

2.4Products and Services

CBSseeks to provide human resource consulting services to manufacturingand service companies in Atlanta and beyond. In line with the keys tothe success of the company highlighted in 1.3 above, the fees chargedwill be differentiated taking into account the nature of the market.This is because discriminatory pricing has been found to result inmore incomes for service-based businesses (Liao (2010): Hwang et al(2010): Xiang et al, (2012)). The services to be provided by CBS willencompass:

  1. Preliminary interviewing of employees

  2. Organizational management

  3. Labor relations services

  4. Human resource research services

  5. Employee appraisal

  6. Personnel management systems

  7. Employee motivation

  8. Remuneration

  9. Outsourcing

    1. Market Analysis

3.1Target Market

Thecompany majorly targets already existing and mushrooming companiesin Atlanta for several reasons. First, the companies have been foundto lack in internal capacity to undertake professional human resourcestrategic management practices (Flamholtz, (2012): Gatewood et al,(2010)). Second, the mushrooming companies have inadequate resourcesand they are therefore likely to accept stock options for cash.Finally, most of the companies are experiencing exponential growthand are in dire need of human resource services. The companies inAtlanta can be classified in several ways. Here, the companies willbe stratified as either technology firms or non-technology firms andthis is informed by the fact that a majority of networking activitiesare observed in scenarios that do not distinguish between the twostrata (Purce (2014): Wilson (2014): Weinstein, 2013).

3.2Industry Analysis

CBShas reliable information about the industry in which it operates moreso concerning the customer attributes in the ever-dynamic industry.The information herein will be beneficial to the company, as it willbetter understand not only the needs of the potential customers butalso their specific requirements and how CBS can appeal to theseoften-unique customer needs. The chart below shows the proportions ofemerging companies by techno-orientation.

Figure3.20: Emerging Companies

Theindustry has also been growing exponentially in terms of the emergingcompanies over the past few years. The table below shows the figuresof the companies seeking human resource consultancy services inAtlanta in the last five years.

Table3.2:Industry trends in Atlanta

Clients

Growth

2010

2011

2012

2013

2014

CAGR

Technology Companies

12%

325

380

398

410

534

10.05%

Non-technology Companies

9.35%

225

265

267

298

377

9.89%

Other Companies

0%

0

0

0

0

0

0.0%

Total

9.04%

550

645

665

708

911

9.04

Additionally,CBS has been particularly keen on the industry trends in professionalservices and in particular human resource consulting services. Whathas come out quite clearly is an observed preference for humanresource outsourcing. Moreover, this phenomenon seems to be informedby the fact that outsourcing enables emerging firms to augment thesame service levels as already established firms in the respectivecorporate platforms (Quin &amp Strategy, 2013). This gives theemerging firms a strategic advantage (Moensted, 2010). Generally, theindustry trends reflect an increase in human resource consultingservices as shown in the figure below.

Figure3.21:Industry Trends, by the number of firms seeking HR consultancy.

2010 2011 201220132014

3.3SWOT Analysis

Afterassessing the industry in which CompetencyBased Staffing will operate. The following Strengths, Weaknesses,Opportunities and Threats have been identified.

Table1.0:CBS SWOT Analysis

S (Strengths)

1. Flexible compensation programs: This makes the company to be highly responsive to specific customer needs.

2. Customization of products: This is a key to ensuring customer satisfaction therefore ensuring business existence in the future.

3. A strong relationship with the community in Virginia. This fosters the business good will with the community.

W (Weaknesses)

1. Inadequate budgetary allocation for marketing which is crucial for starting businesses.

2. A short billable time to pursue all possible opportunities as CBS will have only a handful of fully-fledged human resource experts.

3. Company lacks trademark and reputation owing to its being new in the industry.

O (Opportunities)

1. Industry trends towards outsourcing presents invaluable opportunities for CBS.

2. Possibility of benefiting from clients’ increased proceeds.

3. Growing clientele base with lack of information concerning the existence of CBS

T (Threats)

1. A regional human resource firm that starts operations in Atlanta

2. Change in labor policy frameworks in Atlanta

3. Radical changes in capital markets that inhibit growth of new businesses.

4.0Market Strategy

CompetenceBased Staffing marketing strategy will be anchored on businessnetworking supplemented by the traditional marketing strategies (the4Ps for instance). Business networking will encompass the presidentof CBS, Jimmy Grad, to advance his already extensive industryexperience.

4.1The 4Ps CBS Marketing

Giventhe role that marketing plays in the success of any businessorganization, CBS will rigorously pursue its objectives through themarketing mix strategy made up of the four marketing variables asexplained below.

  1. Products: The human resource consulting services offered by CBS will be customized to the client needs. Additionally, the products will be assessed to ensure they are of highest quality, the best designs and that they are offered in a friendly manner that adheres to the ethical standards in the human resource consultancy profession.

  2. Price: CBS will undertake an extensive market survey to establish the prices that firms are willing to pay for its products and thereafter structure an integrative pricing policy, which enables the business to obtain fair profits while gaining competitive market advantage. Moreover, discounting and credit will be considered for reliable clients going forward.

  3. Place: The CBS business premises will be strategically located at the heart of Virginia, which is centrally located considering the demographic characteristic of potential client firms. Additionally, the Silicon Valley that is the town will enable CBS to conveniently use online platforms to market its products across Atlanta and beyond.

  4. Promotion: The promotional strategies to be employed by CBS are as diverse as the products themselves. The company seeks to use fairly low prices at the beginning to persuade client firms to buy the products of the company. Additionally, CBS will seek to espouse itself as a consultancy firm with some of the best human resource consultants in the United States and this promotional strategy will be centered on the corporate reputation of Dr. Jimmy Grad.

4.2Product Pricing

Thecompany seeks to augment on the proceeds in the large customersurpluses inherent in the consultancy business. This is informed bythe fact that for differentiated products, especially those tailoredto customer needs, businesses always reserve the discretion ofproduct prices (CITE).Tentatively, the firm will adopt standard prices for the products,which will vary depending on the nature of the employees of thecompany seeking CBS services.

Table4.2:CBS Product Pricing

Product

Standard Rates

Preliminary interviewing of employees

$ 432 depending on the number of employees

Organizational management

$2300

Labor relations services

$1560

Human resource research services

$4530

Employee appraisal

$1390

Personnel management systems

$2340

Employee motivation

$3670

Remuneration

$1890

Outsourcing

$5670

4.3Promotional Strategy

Thecompany will adopt various promotional strategies that will channelthe CBS short term and long-term business goals. The company seeks touse social media platforms and its already popular website to marketits products. Additionally, adequate funds have been set aside toadvertise the company products on mass media especially the radio andtelevision stations in Atlanta. The discriminatory pricing policiesto be employed by the company in the first six months of operation isthe key strategy that seeks to popularize the products while at thesame time enabling CBS to gain a significant market share in thehuman resource consulting industry Atlanta and the neighboring states(CITE).

4.4Sales Forecast

CBSintends to make progressive sales in the first three years ofoperation, which is projected, based on the current market ratescomplete with the industry growth prospects. Moreover, the projectedsales have been controlled for other regulatory effects that havebeen found to influence sales of emerging service companies inAtlanta. The table below shows the CBS forecast sales for the firstthree years of operation.

Table4.4:CBS Sales Forecast (in USD)

2016

2017

2018

  1. Client Firms

Technology Companies

44 500

68 750

95 300

Non-technology Companies

26 600

33 400

39 450

Total Sales

71 100

102 150

134 750

  1. Direct Costs of Sales

Technology Companies

3035

4300

5600

Non-technology Companies

1040

1805

2350

Subtotal Direct Costs of Sales

4075

6105

7950

5.0Implementation Strategy

CBSwill adopt an integrative approach in achieving the identifiedmilestones complete with medium term assessment plans.

5.1Overall Implementation Strategy

Table5.1 below summarizes the milestones to be achieved by CBS.

Figure5.1:CBS Overall Implementation Strategy

Milestone

Commencement

Completion

Cost

  1. Advertising

Completion of marketing blueprint

Jan 2016

March 2016

$565

Business Networking

Jan 2016

May 2017

$895

Corporate Exhibitions

Jan 2016

Sept 2017

$500

Career Services

Jan 2016

April 2016

$345

Regulatory Networking

Jan 2016

Oct 2017

$1025

Social Media advertising

Jan 2016

Nov 2016

$655

Career Services Networking for last quarter

Jan 2016

March 2016

$457

Total Advertising Costs

$4442

  1. Public Relations

Atlanta Community Foundation (ACF)

Jan 2016

Jan 2018

$1025

Georgia State University Partnership

Jan 2016

March 2016

$555

Other

Jan 2016

*July 2017

$376

Total PR Costs

$1956

Direct Marketing

Atlanta Times

Jan 2016

March 2016

$2345

Road Shows

Jan 2016

Sept 2016

$675

Discounts

Jan 2016

April 2016

$440

Other

Jan 2016

*Dec 2018

$225

Total Direct Marketing Cost

$3685

Web Development

Web hosting

Jan 2016

June 2016

$765

Copyright costing &amp procedures

Jan 2016

Oct 2016

$445

Maintenance

Jan 2016

April 2018

$320

Other

Jan 2016

*Dec 2018

$275

Total Web Development Cost

$1805

Others

Interviews &amp Hiring

Jan 2016

Dec 2018

$567

Total Other Cost

$567

Grand Total Costs

$12455

Thefigures with asterisk (*) are highly variable since they cater forflexibility of the strategy.

5.2Monitoring and Evaluation

Theorganization intends to put in place a competent monitoring andevaluation team that will assess the implementation process asoutlined in the preceding section. Moreover, the business intends hasin place a medium assessment program in which each milestone has aspecific date of progress assessment that is informed by the periodfor which each milestone is allocated. The various qualitativeapproaches to be used in ascertaining progress include qualitativestatistical scales as well as the subjective approaches.

6.0Financial Statements and Projections

Thissection of the proposal presents the forecasted CBS profits and lossstatement as well as the forecasted CBS balance sheet.

6.1Forecasted Profit and Loss Statement

CBSintends to evaluate the business proceeds after every one month. Thetable below shows the monthly profit and loss statements for CBS forthe first 12 months of business operations.

Table6.1:CBS Profit and Loss Statement

Item

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$1,400

$2,100

$2,660

$3,640

$3,920

$4,480

$5,320

$5,740

$6,020

$7,140

$7,560

$8,120

Direct Cost of Sales

$70

$105

$133

$182

$196

$224

$266

$287

$301

$357

$378

$406

Other Production Expenses

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$70

$105

$133

$182

$196

$224

$266

$287

$301

$357

$378

$406

Gross Margin

$1,330

$1,995

$2,527

$3,458

$3,724

$4,256

$5,054

$5,453

$5,719

$6,783

$7,182

$7,714

Gross Margin %

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

95.00%

Expenses

Payroll

$2,000

$2,000

$2,000

$2,000

$2,000

$5,500

$5,500

$5,500

$5,500

$5,500

$5,500

$5,500

Sales and Marketing and Other Expenses

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Depreciation

$80

$80

$80

$80

$80

$80

$80

$80

$80

$80

$80

$80

Leased Equipment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Utilities

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

Insurance

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

Rent

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Payroll Taxes

15%

$300

$300

$300

$300

$300

$825

$825

$825

$825

$825

$825

$825

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Operating Expenses

$3,130

$3,130

$3,130

$3,130

$3,130

$7,155

$7,155

$7,155

$7,155

$7,155

$7,155

$7,155

Profit Before Interest and Taxes

($1,800)

($1,135)

($603)

$328

$594

($2,899)

($2,101)

($1,702)

($1,436)

($372)

$27

$559

EBITDA

($1,720)

($1,055)

($523)

$408

$674

($2,819)

($2,021)

($1,622)

($1,356)

($292)

$107

$639

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Taxes Incurred

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Net Profit

($1,800)

($1,135)

($603)

$328

$594

($2,899)

($2,101)

($1,702)

($1,436)

($372)

$27

$559

Net Profit/Sales

-128.57%

-54.05%

-22.67%

9.01%

15.15%

-64.71%

-39.49%

-29.65%

-23.85%

-5.21%

0.36%

6.88%

6.2 Balance Sheet

Thefigure below shows the forecasted balance sheet for CBS.

Figure6.2: CBS Balance Sheet As at 31stDecember 2016

Assets

Current Assets

Cash

$2,385

Other Current Assets

$0

Total Current Assets

$2,385

Long-term Assets

Long-term Assets

$4,800

Accumulated Depreciation

$960

Total Long-term Assets

$3,840

Total Assets

$6,225

Liabilities and Capital

Current Liabilities

Accounts Payable

$1,915

Current Borrowing

$0

Other Current Liabilities

$0

Subtotal Current Liabilities

$1,915

Long-term Liabilities

$0

Total Liabilities

$1,915

Paid-in Capital

$16,000

Retained Earnings

($1,150)

Earnings

($10,540)

Total Capital

$4,310

Total Liabilities and Capital

$6,225

7.0Financial Report

Thissection presents a summary of the company’s financial projections,current financial position and estimated capital and investments.

7.1Financial Projections

CBShas an ambitious financial plan that if implemented to the letter,will see the business incomes grow by large margins every month. Thechart below shows the gross monthly margin for CBS in the firsttwelve months of operation.

Figure7.10:CBS Gross Margin Monthly

7.11General Assumptions

Thetable below shows the general assumptions that were adopted inmodeling the financial projections above.

Figure1.1:General Assumptions

Item

Month

Current Interest rates

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

Interest rates in the next twelve months

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

12%

7.2Current Financial Position

Thetable below shows the current financial position of CBS. It should benoted that the assumptions in table 7.11 in the preceding section isapplicable for all the financial projections made in this proposal.

Figure7.2:CBS Current Financial Position

Assets

Current Assets

Cash

$3, 450

Other Current Assets

$9, 540

Total Current Assets

$12, 990

Long-term Assets

Long-term Assets

$4,800

Accumulated Depreciation

$960

Total Long-term Assets

$3,840

Total Assets

$6,225

Liabilities and Capital

Current Liabilities

Accounts Payable

$3200

Current Borrowing

$0.0

Other Current Liabilities

$0.0

Subtotal Current Liabilities

$3200

Long-term Liabilities

$0.0

Total Liabilities

$0.0

Earnings

($10,540)

Total Capital

$4,310

7.3 EstimatedCapital and Investments

CBSintends to undertake massive investments that will culminate in thecompany being listed in the Chicago stock exchange. In the next fiveyears of operations, the following capital and investments can beprojected based on the general CBS blueprint.

Table7.3:Estimated Capital/ Investments

Capital/ Investments

Amount

Real Estates

$654, 700

NYSE shares

$564, 234

Operating Capital

$475, 944

Sunk Investments

$45, 342

Federal Bank Securities

$766, 300

Atlanta Business Park

$2, 344, 000

Other

$345, 000

Total

$4, 895, 520

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