Business Plan Essay, Research Paper
Nicholas Belcher
Business Plan
11/26/01
Business Plan for Progressive Consulting
1. 0 Executive Summary
Progressive Consulting will be formed as a consulting company specializing in
marketing of high technology products in international markets. Its founders
are former marketers of consulting services, personal computers, and market
research, all in international markets. They are founding Progressive
Consulting to formalize the consulting services they offer.
1. 2 Mission
Progressive Consulting offers high-tech manufacturers a reliable, high
quality alternative to in-house resources for business development, market
development, and channel development on an international scale. A true
alternative to in house resources offers a very high level of practical
experience; know how, contacts, and confidentiality. Clients must know that
working with Progressive Consulting is a more professional, less risky way to
develop new areas even than working completely in house with their own
people. Progressive Consulting must also be able to maintain financial
balance, charging a high value for its services, and delivering an even
higher value to its clients. Initial focus will be development in the
European and Latin American markets, or for European clients in the United
States market.
1. 3 Keys to Success
?Excellence in fulfilling the promise completely confidential, reliable,
trustworthy expertise and information.
?Developing visibility to generate new business leads.
?Leveraging from a single pool of expertise into multiple revenue generation
opportunities: retainer consulting, project consulting, market research, and
market research published reports.
2. 0 Company Summary
Progressive Consulting is a new company providing high-level expertise in
international high-tech business development, channel development,
distribution strategies, and marketing of high tech products. It will focus
initially on providing two kinds of international triangles:
?Providing United States clients with development for European and Latin
American markets.
?Providing European clients with development for the United States and Latin
American markets.
As it grows it will take on people and consulting work in related markets,
such as the rest of Latin America, and the Far East, and similar markets. As
it grows it will look for additional leverage by taking brokerage positions
and representation positions to create percentage holdings in product
results.
2. 1 Company Ownership
Progressive Consulting will be created as a California C corporation based
in Los Angeles County, owned by its principal investors and principal
operators. As of this writing it has not been chartered yet and is still
considering alternatives of legal formation.
2. 2 Startup Summary
Total start up expense (including legal costs, logo design, stationery and
related expenses) come to $73,000. Start up assets required include $3,000 in
short term assets (office furniture, etc.) and $1,000,000 in initial cash to
handle the first few months of consulting operations as sales and accounts
receivable play through the cash flow. The details are included in the table.
Start-up Plan
____________________________
Start-up Expenses
Legal $1,000
Stationery etc. $3,000 Brochures $5,000
Consultants $5,000
Insurance $350
Expensed equipment $3,000
Other $1,000
_______________________________
Total Start-up Expense $18,350
Start-up Assets Needed
Cash requirements $25,000
Start-up inventory $0
Other Short-term Assets $7,000
Total Short-term Assets $32,000
_______________________________
Total Assets $32,000
Total Startup Requirements: $50,350
Left to finance: $0
Start-up Funding Plan
Investment
Investor 1 $20,000
Investor 2 $20,000
Other $10,000
Total investment $50,000
Short-term borrowing
Unpaid expenses $5,000
Short-term loans $0
Interest-free short-term loans $0
Subtotal Short-term Borrowing $5,000
Long-term Borrowing $0
Total Borrowing $5,000
Loss at start-up ($23,000)
Total Equity $27,000
Total Debt and Equity $32,000
2. 3 Company Services
Progressive offers expertise in channel distribution, channel development,
and market development, sold and packaged in various ways that allow clients
to choose their preferred relationship: these include retainer consulting
relationships, project based consulting, relationship and alliance
brokering, sales representation and market representation, project-based
market research, published market research, and information forum events.
2. 4 Company locations and facilities
The initial office will be established in a quality office space in the Los
Angeles County ?Dearborn Valley” area of California, the heart of the U.S.
high tech industry.
3. 0 Services
Progressive offers the expertise a high-technology company needs to develop
new product distribution and new market segments in new markets. This can be
taken as high-level retainer consulting, market research reports, or project-
based consulting.
3. 1 Service Description
1. Retainer consulting: we represent a client company as an extension of its
business development and market development functions. This begins with
complete understanding of the client company’s situation, objectives, and
constraints. We then represent the client company quietly and confidentially,
sifting through new market developments and new opportunities as is
appropriate to the client, representing the client in initial talks with
possible allies, vendors, and channels.
2. Project consulting: Proposed and billed on a per-project and per-milestone
basis, project consulting offers a client company a way to harness our
specific qualities and use our expertise to solve specific problems, develop
and/or implement plans, develop specific information.
3. Market research: group studies available to selected clients at $5,000 per
unit. A group study is packaged and published, a complete study of a specific
market, channel, or topic. Examples might be studies of developing consumer
channels in Japan or Mexico, or implications of changing margins in software.
3. 2 Competitive Comparison
The competition comes in several forms:
1. The most significant competition is no consulting at all, companies
choosing to do business development and channel development and market
research in-house. Their own managers do this on their own, as part of their
regular business functions. Our key advantage in competition with in-house
development is that managers are already overloaded with responsibilities;
they don’t have time for additional responsibilities in new market
development or new channel development. Also, Progressive can approach
alliances, vendors, and channels on a confidential basis, gathering
information and making initial contacts in ways that the corporate managers
can’t.
2. The high-level prestige management consulting: High-Tec, San Diego
Consulting Group, etc. These are essentially generalists who take their name-
brand management consulting into specialty areas. Their other very important
weakness is the management structure that has the partners selling new jobs,
and inexperienced associates delivering the work. We compete against them as
experts in our specific fields, and with the guarantee that our clients will
have the top-level people doing the actual work.
3. The third general kind of competitor is the international market research
company: International Electronic Data Corporation (IEDC), Dataquest,
Stanford Research Institute, etc. These companies are formidable competitors
for published market research and market forums, but cannot provide the kind
of high-level consulting that Triangle will provide.
4. The fourth kind of competition is the market-specific smaller house. For
example: Nomura Research in Japan, Select S.A. de C.V. in Mexico (now
affiliated with IEDC).
5. Sales representation, brokering, and deal catalysts are an ad-hoc business
form that will be defined in detail by the specific nature of each
individual case.
3. 3 Sales Literature
The business will begin with a general corporate brochure establishing the
positioning. This brochure will be developed as part of the start-up
expenses.
3. 4 Sourcing
?The key fulfillment and delivery will be provided by the principals of the
business. The real core value is professional expertise, provided by a
combination of experience, hard work, and education (in that order).
?We will turn to qualified professionals for free-lance back-up in market
research and presentation and report development, which are areas that we
can afford to contract out without risking the core values provided to the
clients.
3. 5 Technology
Progressive Consulting will maintain latest Windows and Macintosh
capabilities including:
?1. Complete Email facilities in Internet, CompuServe, America Online, and
Apple link, for working with clients directly through email delivery of drafts
and information.
?2. Complete presentation facilities for preparation and delivery of
multimedia presentations on Macintosh or Windows machines, in formats
including on-disk presentation, live presentation, or video presentation.
?3. Complete desktop publishing facilities for delivery of regular retainer
reports, project output reports, marketing materials, market research
reports.
3. 6 Future Services
In the future Progressive will broaden the coverage by expanding into
coverage of additional markets (e.g. all of Latin America, Far East, Western
Europe) and additional product areas (e.g. telecommunications and technology
integration). We are also studying the possibility of newsletter or
electronic newsletter services, or perhaps special on-topic reports.
4. 0 Market Analysis Summary
Progressive will be focusing on high-technology manufacturers of computer
hardware and software, services, networking, who want to sell into markets
in the United States, Europe, and Latin America. These are mostly larger
companies, and occasionally medium-sized companies.
Our most important group of potential customers is executives in larger
corporations. These are marketing managers, general managers, and sales managers,
sometimes charged with international focus and sometimes charged with market
or even specific channel focus. They do not want to waste their time or risk
their money looking for bargain information or questionable expertise. As
they go into markets looking at new opportunities, they are very sensitive
to risking their company’s name and reputation.
4. 1 Market Segmentation
?Large manufacturer corporations: our most important market segment is the
large manufacturer of high-technology products, such as Apple, Hewlett-
Packard, IBM, Microsoft, Siemens, or Olivetti. These companies will be
calling on Progressive for development functions that are better spun off
than managed in-house, and for market research, and for market forums.
?Medium sized growth companies: particularly in software, multimedia, and
some related high growth fields, Triangle will be able to offer an attractive
development alternative to the company that is management constrained and
unable to address opportunities in new markets and new market segments.
4. 2 Industry Analysis
The consulting “industry” is pulverized and disorganized, thousands of
smaller consulting organizations and individual consultants for every one of
the few dozen well-known companies.
Consulting is a disorganized industry, with participants ranging from major
international name brand consultants to tens of thousands of individuals. One
of Progressive’s challenges will be establishing itself as a “real”
consulting company, positioned as a relatively risk free corporate purchase.
4. 2. 1 Industry Participants
The consulting “industry” is pulverized and disorganized, thousands of
smaller consulting organizations and individual consultants for every one of
the few dozen well-known companies.
At the highest level are the few well established major names in management
consulting. Most of these are organized as partnerships established in major
markets around the world, linked together by interconnecting directors and
sharing the name and corporate wisdom. Some evolved from accounting companies
(e.g. Arthur Anderson, Touch? Ross) and some from management consulting
(McKinsey, Bain). These companies charge very high rates for consulting, and
maintain relatively high overhead structures and fulfillment structures based
on partners selling and junior associates fulfilling. At the intermediate
level are some function specific or market specific consultants, such as the
market research firms (IEDC, Dataquest) or channel development firms
(ChannelCorp, Channel Strategies, ChannelMark).
Some kinds of consulting is little more than contract expertise provided by
somebody looking for a job and offering consulting services as a stop-gap
measure while looking.
4. 2. 2 Distribution Patterns
Consulting is sold and purchased mainly on a word-of-mouth basis, with
relationships and previous experience being by far the most important factor.
The major name-brand houses have locations in major cities and major markets,
and executive-level managers or partners develop new business through
industry associations, business associations, and chambers of commerce and
industry, etc., even in some cases social associations such as country clubs.
The medium-level houses are generally area-specific or function specific, and
are not easily able to leverage their business through distribution.
4. 2. 3 Competition and Buying Patterns
The key element in purchase decisions made at the Progressive client level is
trust in the professional reputation and reliability of the consulting firm.
4. 2. 4 Main Competitors
?The high-level prestige management consulting:
Strengths: international locations managed by owner-partners with a high
level of presentation and understanding of general business. Weaknesses: General business knowledge doesn’t
substitute for the specific market, channel, and distribution expertise of
Triangle, focusing on high-technology markets and products only. Also, fees
are extremely expensive, and work is generally done by very junior-level
consultants, even though sold by high-level partners.
?The international market research company:
Strengths: International offices, specific market knowledge, permanent staff
developing market research information on permanent basis, good relationships
with potential client companies.
Weaknesses: market numbers are not marketing, not channel development or
market development. Although these companies compete for some of the business
Triangle is after, they cannot really offer the same level of business
understanding at a high level.
?Market specific or function-specific experts
Strengths: expertise in market or functional areas. Triangle should not try
to compete with Normura or Select in their markets with market research, or
with ChannelCorp in channel management.
Weaknesses: the inability to spread beyond a specific focus, or to rise
above a specific focus, to provide actual management expertise, experience,
and wisdom beyond the specifics.
The most significant competition is no consulting at all, companies choosing
to do business development and channel development and market research in-
house. Strengths: no incremental cost except travel; also, the general work
is done by the people who are entirely responsible, the planning done by
those who will implement. Weaknesses: most managers are terribly overburdened
already, unable to find incremental resources in time and people to apply to
incremental opportunities. Also, there is a lot of additional risk in market
development and channel development done in house from the ground up.
Finally, retainer-based antenna consultants can greatly enhance a company’s
reach and extend its position into conversations that might otherwise never
have taken place.
4. 3 Market Analysis
As indicated by the illustrations, we must focus on a few thousand well-
chosen potential customers in the United States, Europe, and Latin America.