ProFound Marketing Consultancy (PMC) is a startup partnership between Mr. AB Ace and Mr. PQ Perfect. It will provide business marketing consultancy to small & medium business in Australia, with special focus on New South Wales. The main services will include consultancy for Brand Development, Online Advertising, Social Media Marketing, Surveys & Research and creation of Advertising Material like Brochures. It has obtained $75,000 loan funding from TakeItAll bank, and the partners have contributed $20,000 each as capital. 1.1 Vision
To create an organization which values ethical marketing practices and helps small & medium business grow by achieving differentiation for their products and services in the marketplace. 1.2 Mission
To help small & medium businesses in Australia build competitive advantage through differentiation by developing and implementing modern & cost efficient marketing strategies. 1.3 Objectives
To understand client’s needs, and develop effective, cost-efficient and tailor-made marketing strategies & implementation plans. To help the client implement the strategies, and to continuously evaluate its efficiency and effectiveness based on the feedback received. To continuously train and update the skills of the personnel to enable them deliver the highest level of services at all times. To reward and retain high quality professionals who contribute to build long term value for the organization based on ethical marketing practices. To build long lasting partnerships with other specialist service providers in the marketing field to increase our service offerings through outsourcing and sub-contracting. To stay ahead of the innovation curve through creativity and integrity. 1.4 Values
To serve the client by adhering to the highest level of professional ethics. To have a collaborative and transparent approach in dealings with all stakeholders, including clients, vendors and employees. To attract and retain quality personnel through fair reward mechanisms and building an organization which fosters creativity and personal growth with due emphasis on work-life balance. 2.0 Market Requirements & Customer Profile
ProFound Marketing Consultancy (PMC) will initially target small & medium businesses (SMBs) in New South Wales, Australia, and later expand into other geographical areas within Australia. As mentioned in DIISR (2011), Australian Bureau of Statistics has defined a small business as one with 0–19 employees, and medium-sized business as one with 20–199 employees. These two categories together contribute a significant percentage (57.7%) of the industry value added in Australia (p.4), with more than 81% of SMBs contributing in the services sector (p.5).
According to PWC (2013), online advertising expenditure in Australia grew 14.6% to $3.6 billion. Mobile advertising spend nearly tripled to $138.2 million. Online advertising spend exceeded free-to-air television advertising revenues for the 6 months ending 30 June 2013. Further, according to Pick (2013), 92% of small businesses consider social media as an effective marketing technology tool for attracting new customers or engaging existing customers, and three-fourths of marketers planned to increase strategic efforts on social media and social networking sites. The size of the market and the growth, especially in online advertising & social media marketing, provides a great opportunity for the firm. The SMBs are strongly controlled and managed by the founder entrepreneurs who have a hands-on approach to business.
However, at this stage, they need effective and cost-efficient marketing strategies and plans to survive and grow. They usually do not have big budgets, and are often less experienced in the modern ways of marketing. However, they spend a larger portion of their revenues (17.8%) on marketing (Moorman 2012). Being a start-up firm with low overheads, PMC can empathize with the challenges being faced by the smaller businesses, and provide tailor-made services at reasonable price. It can also connect at a personal level with the founders to understand their vision for the business. The consultancy market is highly competitive with both freelancers and big agencies targeting the SMBs. PMC will attempt to differentiate itself with customized professional services and innovative ideas which use appropriate data and market intelligence. The personalized approach will make the client get maximum attention from the best professionals in the firm. 3.0 Services
PMC will provide its consultancy services for Brand Development, Online Advertising, Social Media Marketing, Market Surveys & Research and creation of Advertising Material like Brochures. The firm will specialize in online marketing / branding, especially using the power of social media and leveraging other emerging trends. Based on the requirement of the client, the firm will offer its advice and / or create marketing strategies, implementation plans, campaigns and supporting material. It may outsource some specific tasks to specialists depending on the expertise and infrastructure required to deliver top class services. In Brand development, PMC will provide services like brand name creation, domain names, tagline creation, logo designing services, building positioning strategy etc.
In Online Advertising, the firm will provide advisory services to help SMBs leverage the potential of advertisements using search & directories, classifieds and displays using an appropriate mix. In Social Media Marketing, the firm will create & implement a marketing plan which uses the appropriate media, with a professionally designed content. Market Surveys & Research Reports will primarily be prepared for businesses who want to explore new markets or gather market intelligence. Advertising material will be created for businesses who already have a well-defined marketing strategy, positioning statement and an implementation plan. PMC will help the clients build their marketing budgets by giving due weightage to different forms of advertising appropriate for their businesses. 4.0 Pricing Strategy
PMC will provide tailor-made marketing consultancy services which will require understanding of the client and the target markets. The firm will work based on an all-inclusive hourly rate with the client. The number of hours to be charged will be decided in advance based on the estimated efforts. The rate & the hours will be communicated to the client before start of the services so that there are no hidden charges. However, to avoid excessive direct costs in providing the services, the service level agreement will be designed in adequate detail. The clients will be charged at the average rate of $160 per hour (Yuille 2011). As mentioned above, this will include all out of pocket expenses. 5.0 Resource Requirements
5.1 Financial & Physical
The firm has obtained $75,000 in loan funding, and the partners have contributed $20,000 each as capital. This sum is sufficient for the firm to start its business, and it is likely to remain cash positive (Appendix C) if the revenue projections (Table 1) are met. Major initial outflows includes fit-out expenditure for a 50 sqm office in Chinatown Sydney & the two months advance rent payment (Appendix B), and purchase of laptops, training & marketing expenses (Appendix A). Details of the other running expenses can be seen in Appendix A & the notes. The firm will endeavor to be extremely conscious of spending on capital assets so that it remains cash flow positive during the first 3-4 years. For example, subscription to cloud services / software will be taken rather than investing in purchasing a server or a marketing software. No additional loan will be taken unless absolutely necessary. Initial marketing activities will involve building a professional looking website, advertisement in print & TV media, social media marketing etc.
Training will be focused on upgrading the skills of the partners in internet marketing from time to time, purchase of research reports etc. The partners will not take any salary, but will get paid a portion of one-third of the revenues after taking out the other direct costs. For example, if direct cost of revenue is $54,912 in 2014, and direct expenses are $20,000, the each partner will get paid half of the balance $34,912. In addition, they will obviously get a share of the profits as partners. The firm is expected to break even on a net basis by end of 2016. The revenue projections are based on an estimate that the firm will be able to bill 20 hours (on an average) of its time each week to the client in 2014, and the hours and the hourly rate will increase as our business and employees grow. The initial clients will be obtained from the previous contacts of the partners, and word-of-mouth publicity. The initial marketing campaign will obviously help generate most of the inquiries.
The clients will be provided one month credit, and the firm will take one month credit from vendors. This will ensure regular flow of cash. Since this is a partnership firm, it will not pay any tax. 5.2 Human
Firm will have two full time employees (the partners) till the end of 2014. Thereafter, it will take on one multi-tasking employee in 2015, and two more in 2016 as the business grows. Since it is a consultancy business, the revenue per employee is likely to remain high. 6.0 Legislative Requirements
There are no specific legislative requirements for starting a partnership firm in Australia. To avoid ambiguity, the partners will execute a written agreement containing terms related to partnership shares, assets, distribution of profits, arrangements for contributing further capital when needed, apportionment of liabilities, terminating the partnership/buy back of shares and handling disputes (DOI 2013). The business name will be trademarked with IP Australia through eServices (IP Australia 2013), and a suitable domain name will also be registered. 7.0 Stakeholder consultation
For preparing the business plan, consultations with the stakeholders has been done to chart a course for achieving profitability within the expected time. This is a continuous process, and local industry representatives, and specialists in the relevant fields (future vendors for us) will be met to understand their perspective & gain insights. Local level media representatives & sales persons will be met to build a rapport and gain knowledge about trends, offers etc. The bank will be appraised of the business plan from time to time to build a long term relation. The employees will be valued and respected and a human resource management system will be created once the business grows beyond a critical mass. 8.0 30-Day Start-UP Action Plan
The marketing campaign will start a week after the office and the website are operational. It will help settle down and test the website. The inauguration of the office will coincide with launch of the campaign and first impression will be important. In addition to the above activities, several other tasks will be undertaken to ensure a smooth start. 9.0 Performance Monitoring Plan
9.1 Key Performance Indicators
The key financial performance indicator will be the number of hours billed to the client. Any negative deviation compared to the plan mentioned in Table 1 will require action based on the overall situation. The monitoring will be done quarterly. 9.2 Key Ratios
The firm will monitor the debt ratio, cash flow to sales ratio and the net profit margin to measure the health of the business.
Any deviation from the plan will be examined for causes, and corrective action taken. The human resources will be valued and rewarded based on performance. They will be trained to improve efficiency and effectiveness.
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