Executive Summary plan

8/7/2019 Executive Summary plan

1/22

Visual Thoughts

June 2010

adewumi

Visual Thoughts

6/1/2010

Business Plan

NW8/326 Descol house Ajetumobi Str Agbowo

Ibadan.www.visualthoughts.org

Prepared By: Olukokun Tolulope


2/22

2 | P a g e

Table of Contents

Executive Summary .. 3

Business Description and Vision. 3

Company Summary .. 4

Description of the Products and Services .. 6

Market Analysis Summary . 7

Strategy and Implementation Summary.. 10

Web Plan Summary .. 14

Organization and Management 15

Financial Management 16

Appendices


3/22


4/22


5/22

5 | P a g e

elderly members of the community who are rapidly gaining interest in the unique resources that online communications have to offer. The downtownlocation will provide business people with convenient access to their online needs.

2.1 Company Ownership

Visual Thoughts is a privately owned company. Olukokun Tolulope O., the founder of Visual Thoughts, is the sole owner and functions as the CEO.

2.2 Start-up SummaryTo begin the business, we require N400,000 in start-up expenses, and another N400,000 in non-cash assets. Details of these requirements can befound below.

Start-up Expense Details:

Legal Expenses

Attorney Consultation N10,000 Initial Filing Fee for LLC -- N40,000A. Once and for all expenses

1. 10 computers at N30,000=N300,0002. Office rent =N120,000 per year3. Tables and 2 dozens chairs=N37,0004. Generating set=N25,0005. ISP equipments =N25,0006. Networking of 10 computers=N50,0007. Labour = N20,000B. Monthly Basis

8. Publicity and marketing flyers, posters, banners and publications. =N30,0009. Salary for Receptionist= N5,000 to N7,00010.Fuel for power in a month, we 3 classes/week 2hrs max=app 50 litres/month =N3,50011.Commission for 2 instructors = based on students lectured. Eg N1,500 on each student .12.Monthly internet subscription=N20,00013.NEPA Bill=At least N5,000 ___________________________________

Total N693,500. Note that some of the materials are already acquired


6/22


7/22


8/22

8 | P a g e

Generation X who grew up surrounded by computers, to Baby Boomers who have come to the realization that people today cannot afford to ignorecomputers.

4.1.1 Market Trends

A market survey was conducted in the Fall of 1996. Key questions were asked of fifty potential customers. Some key findings include:

35 subjects said they would be willing to pay for a career in IT with an access to the Internet. N150 an hour was the most popular hourly Internet fee. 24 subjects use the Internet to communicate with others on a regular basis.

4.1.2 Market NeedsFactors such as current trends, addiction, and historical sales data ensure that the high demand for computer literacy will remain constant over thenext generations. The rapid growth and demand for ICT, that has been witnessed worldwide, is only the tip of the iceberg. The potential growth ofthe IT and internet is enormous, to the point where one day, a computer terminal with an online connection will be as common and necessary as atelephone. This may be 10 or 20 years down the road, but for the next five years, the online service provider market is sure to experience tremendousgrowth. Being a very standard cyber-cafe and IT firm in this location, Visual Thoughts will enjoy the first-mover advantages of name recognition andcustomer loyalty. Initially, Visual Thoughts will hold about 80 percent share of the IT and cyber-caf market in Samonda. In the next five years,competitors will enter the market. Visual Thoughts has set a goal to maintain greater than a 50 percent market share.

4.2 Market Segmentation

Visual Thoughts' customers can be divided into two groups. The first group is familiar with the Internet and desires a progressive and invitingatmosphere where they can get out of their offices or bedrooms and enjoy a great cup of coffee. The second group is not familiar with the Internet,yet, and is just waiting for the right opportunity to enter the online community. Visual Thoughts' target market falls anywhere between the ages of 18and 50. This extremely wide range of ages is due to the fact that both computer literacy and the Internet appeal to a variety of people. In addition tothese two broad categories, Visual Thoughts' target market can be divided into more specific market segments. The majority of these individuals arestudents and business people.


9/22

9 | P a g e

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

University Students 4% 15,000 15,600 16,224 16,873 17,548 4.00%

Office Workers 3% 25,000 25,750 26,523 27,319 28,139 3.00%

Seniors 5% 18,500 19,425 20,396 21,416 22,487 5.00%

Teenagers 2% 12,500 12,750 13,005 13,265 13,530 2.00%

Other 0% 25,000 25,000 25,000 25,000 25,000 0.00%

Total 2.68% 96,000 98,525 101,148 103,873 106,704 2.68%

4.3 Service Business AnalysisThe popularity of the Internet is growing exponentially. Those who are familiar with the Internet are well aware of how fun and addictive surfing theNet can be. Those who have not yet experienced the Internet, need a convenient, relaxed atmosphere where they can feel comfortable learning aboutand utilizing the current technologies. Visual Thoughts seeks to provide its customers with affordable Internet access in an innovative and supportiveenvironment to build a life career in IT.

Due to intense competition, cafe owners must look for ways to differentiate their place of business from others in order to achieve and maintain acompetitive advantage. The founder of Visual Thoughts realizes the need for differentiation and strongly believes that combining an IT firm withcomplete Internet service is the key to success. The fact that no IT firms are established in Samonda, presents Visual Thoughts with a chance to enterthe window of opportunity and enter into a profitable niche in the market.

4.3.1 Competition and Buying Patterns

Competition from online service providers comes from locally-owned businesses as well as national firms. There are approximately eight, local,online service providers. This number is expected to grow with the increasing demand for Computer Literacy and Internet access. Larger, online


10/22


11/22


12/22


13/22


14/22

14 | P a g e

The company will:

write press releases get featured in articles and on websites register keywords with major search engines approach CMS/LMS vendors and professional organization about linking to our website advertise in industry-specific publications investigate/initiate strategic partnerships attend trade shows (as exhibitors) present our solutions at conferences and seminars.

As the market demonstrates its needs, Visual Thoughts will begin to narrow its focus, optimizing those products and services that are most useful,beneficial, and cost-effective. The company will invest in a market research strategy utilizing a number of evaluation and survey techniques to assureits understanding of the market and its staying power within that market.

5.5 Sales StrategyAs a retail establishment, Visual Thoughts employs people to handle sales transactions. Computer literacy is a requirement for Visual Thoughtsemployees. If an employee does not possess basic computer skills when they are hired, they are trained by our full certified trainer. Visual Thoughts'commitment to friendly, helpful service is one of the key factors that distinguishes Visual Thoughts from other IT firms

Web Plan SummaryThe Visual Thoughts website will help familiarize potential clients with the companys unique approach to IT training and education. The websitewill establish Visual Thoughts as a sophisticated yet approachable instructional design group with over 2 years of collective experience ineducational and software development.

6.1 Website Marketing Strategy

Through sample learning objects and case studies, the website will showcase the type of detail-oriented services that Visual Thoughts provides.

In addition to introducing prospective clients to the company, the website will provide supplementary information for those already familiar withVisual Thoughts, its products, and its services.

Management Summary

Visual Thoughts is owned and operated by Mr. Olukokun Tolulope. The company, being small in nature, requires a simple organizational structure.Implementation of this organizational form calls for the owner, Mr. Olukokun, to make all of the major management decisions in addition tomonitoring all other business activities.


15/22

15 | P a g e

6.1 Future StaffingAs the client-base grows, the owner plans to hire more professional personnel to handle some other technical work. In the first year, we will rely onoutside consultants to provide necessary things that we do not have or cant afford at the moment. As the client base grows and revenue isincreasingly generated through content and technology re-licensure, the partners may add additional development staff to support project needs.

6.2 Personnel PlanThe staff will consist of 6 employees working 24 days a month and paid on commission basis except the receptionist and caf attendant. Twocertified instructor for the IT training, one receptionist and caf attendant, and two skilled or unskilled labour for the laundry. In addition, the full-time caf attendant must be technologically oriented to handle minor terminal repairs and services.

This simple structure provides a great deal of flexibility and allows communication to disperse quickly and directly. Because of these characteristics,there are few coordination problems seen at Visual Thoughts that are common within larger organizational chains. This strategy will enable VisualThoughts to react quickly to changes in the market.

Personnel Plan

Year 1 Year 2 Year 3

Owner N360,000 N500,000 N600,000

IT instructor 1 N180,000 N250,000 N360,000

IT instructor 2 N180,000 N250,000 N360,000

Receptionist N60,000 N84,000 N120,000

Caf Attendant N84,000 N108,000 N144,000

Launderer 1 N216,000 N216,000 N216,000

Launderer 2 N216,000 N216,000 N216,000


16/22

16 | P a g e

Manager N0.00 N0.00 N180,000

Total People 7 7 8

Total Payroll N1,296,000 N1,624,000 N2,196,000

Financial Plan

Our financial plan is based on our assumption of achieving desired levels of sales. Our first-year revenues (projected at N1,500,000) will probably beinsufficient to turn a profit in the first year. However, we plan to generate net profit starting in year two. Our initial cash reserve should be sufficientto keep us afloat during the first year. Subsequent years' cash flows generate a cushion that will allow us to further develop our business.

7.1 Start-up Funding

This business plan is prepared to obtain financing in the amount of N600,000. The supplemental financing is required to begin work on site

preparation and modifications, equipment purchases, and to cover expenses in the first year of operations.

7.2 Important Assumptions

Basic assumptions are presented in the table below.

General Assumptions


Plan Month 1 2 3

Current Interest Rate 8.00% 8.00% 8.00%


17/22

17 | P a g e

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 30.00% 30.00% 30.00%

Other 0 0 0

7.3 Break-even Analysis

The main development costs of the product will be our staff costs. Our variable costs are solely those related to packaging (5% of sales), since ourstaff costs are monthly payroll numbers, reflected in the P&L forecasts later in this document. Our Break-even Analysis is summarized in the table

below.

Break-even Analysis

Monthly Revenue Break-even N282,000

Assumptions:

Average Percent Variable Cost 5%

Estimated Monthly Fixed Cost N168,000


18/22

18 | P a g e

Projected Profit and Loss

Payroll Expense: The founder of Visual Thoughts, Olukokun Tolulope will receive a salary of N360,000 in year one, N500,000 in year two, andN900,000 in year three. Visual Thoughts intends to hire six employees by the end of year one

Rent Expense: Visual Thoughts is renting a whole building at N120,000 per year.Utilities Expense: As stated in the contract, Visual thoughts is responsible for the payment of utilities including gas, garbage disposal, taxes andutilities expense that Visual Thoughts on phone bill generated by 3 phone lines. Visual Thoughts assumes that it will not make more thanN5000.00/month in long distance calls. In addition, there will be an additional utility expense of N20,000 for estimated IPNX bills.

Marketing Expense: Visual Thoughts will allocate N30,000 for promotional expenses over the first year. These moneys will be used for advertisingin local newspapers in order to build consumer awareness.

Insurance Expense: Visual Thoughts has allocated N1,000 for insurance for the first year. As revenue increases in the second and third year ofbusiness, Visual Thoughts intends to invest more money for additional insurance coverage.

Depreciation: In depreciating our capital equipment, Visual Thoughts used the Modified Accelerated Cost Recovery Method. We depreciated ourcomputers over a five-year time period and our fixtures over seven years.

Taxes: Visual Thoughts is an LLC and, as an entity, it is not taxed. However, there is a 15% payroll burden.

Detailed Profit and Loss data is presented in the table below.

Pro Forma Profit and Loss


Sales N3,384,000 N3.500,000 N4,000,000

Direct Cost of Sales N846,000 N875,000 N878,000

Other Costs of Sales $0 $0 $0

Total Cost of Sales N846,000 N875,888 N878,000


19/22

19 | P a g e

Gross Margin N2,538,000 N2,625,000 N3,122,000

Gross Margin % 75.00% 75.00% 78.00%

Expenses

Payroll N1,296,000 N1,624,000 N2,196,000

Marketing/Promotion N30,000 N40,000 N45,000

Depreciation $0 $0 $0

Rent N120,000 N120,000 N120,000

Utilities N300,000 N300,000 N300,000

Insurance N12,000 N12,000 N12,000

Payroll Taxes N0.00 N0.00 N0.00

Other N0.00 N0.00 N0.00

Total Operating Expenses N1,758,000 N2,096,000 N2,673,000


20/22

20 | P a g e

Profit Before Interest and Taxes N780,000 N529,000 N449,000

EBITDA N780,000 N529,000 N449,000

Interest Expense N39,000 N26,450 N22,450

Taxes Incurred N39,000 N26,450 N22,450

Net Profit N702,000 N476,100 N404,100

Net Profit/Sales 20.75% 13.60% 10.10%


21/22

21 | P a g e

Appendix


22/22

22 | P a g e

Executive Summary plan

Documents

Transcript of Executive Summary plan