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Company Business Plan

HI-TECH ADVISORS

2011 - 2013

14/03/2011 10:06:51(GMT)
Executive Summary.....................................................................................................3
Company Overview......................................................................................................4
Products and Services................................................................................................4
Pricing and Sales..........................................................................................................5
Marketing Strategy........................................................................................................6
Competition...................................................................................................................7
Management and Staffing..........................................................................................8
Implementation...............................................................................................................9
Financial Projections....................................................................................................9
Executive Summary
Hi-Tech Advisors (HTA) 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 computer software and market research, all in
international markets. They are founding Hi-Tech Advisors to formalize the consulting
services they offer.
Mission
Hi-Tech Advisors offers high-tech manufacturers a reliable, high quality alternative
to inhouse 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 HTA is a
more professional, less risky way to develop new areas even than working completely in
house with their own people. HTA 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.
Keys to Success
1. Excellence in fulfilling the promise completely confidential, reliable, trustworthy
expertise and information.
2. Developing visibility to generate new business leads.
3. Leveraging from a single pool of expertise into multiple revenue generation
opportunities: retainer consulting, project consulting, market research, and market
research published reports.

Main financial measures

2011 2012 2013
Cash 46,212 61,475 465,802
Sales revenue 1,175,000 1,850,000 2,450,000
Net profit for financial year -6,498 99,517 486,575
Operating margin -0.55% 5.38% 19.9%
Owners' equity 53,502 153,019 589,594
Return on equity p.a. -12.1% 65.0% 82.5%

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Company Overview
Hi-Tech Advisors (HTA) 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:
1. Providing United States clients with development for European and Latin
American markets.
2. Providing United Kingdom and European clients with development for the US
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, also 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.
HTA will be created as a California C corporation based in San Jose, 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. The initial office will be
established in a quality office space in the "Silicon Valley" area of California, the heart of
the U.S. high tech and software industry.
HTA 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 small business 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.

Pic 1. HTA Headquarters

Products and Services

HTA 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.
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, business plan, and
constraints. We then represent the client company quietly and confidentially, sifting

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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.

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 write business plans, develop specific
information, software.

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 Brazil or Mexico, or
implications of changing margins in software.
In the future HTA 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, web-based software and technology integration). We are
also studying the possibility of newsletter or electronic newsletter services, or perhaps
special on- topic reports.

Pricing and Sales

HTA will be priced at the upper edge of what the market will bear, competing with the
name brand consultants.
Consulting should be based on $5,000 per day for project consulting, $2,000 per day for
market research, and $10,000 per month and up for retainer consulting. Market research
reports should be priced at $5,000 per report, which will of course require that reports be
very well planned, focused on very important topics very well presented.
The annual sales projections, gross margins and cost of sales are included here in the
following tables.

Sales revenue (USD)

Products and services 2011 2012 2013
Retainer Consulting 400,000 650,000 1,000,000
Project Consulting 500,000 800,000 900,000
Market Research 200,000 300,000 400,000
Strategic Reports 75,000 100,000 150,000
1,175,000 1,850,000 2,450,000

Gross margin (%)

Products and services 2011 2012 2013
Retainer Consulting 85 85 85
Project Consulting 85 85 85
Market Research 30 30 30
Strategic Reports 70 70 70

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Cost of sales (USD)
Products and services 2011 2012 2013
Retainer Consulting 60,000 97,500 150,000
Project Consulting 75,000 120,000 135,000
Market Research 140,000 210,000 280,000
Strategic Reports 22,500 30,000 45,000
297,500 457,500 610,000

Break-even analysis (USD)

2011 2012 2013
Sales revenue 1,175,000 1,850,000 2,450,000
Cost of sales 297,500 457,500 610,000
Variable expenses, total 297,500 457,500 610,000
Personnel expenses 536,820 897,000 945,300
Other operating expenses 333,000 360,500 333,000
Depreciation of fixed assets 10,000 20,000 20,000
Financial expenses 4,900 4,425 1,061
Fixed expenses, total 884,720 1,281,925 1,299,361
Gross margin 74.7% 75.3% 75.1%
Break-even sales revenue 1,184,667 1,703,096 1,730,128
Sales revenue above break-even 0 146,904 719,872

Marketing Strategy
HTA will be focusing on high-technology manufacturers of computer hardware and
software, services, networking, who want to sell into markets in the United States, United
Kingdom, Europe, and Latin America. These are mostly larger companies, and
occasionally medium-sized companies.
Our most important group of potential customers are executives in larger corporations.
These are marketing managers, general managers, 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.
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 HTA's
challenges will be establishing itself as a "real" consulting company, positioned as a
relatively risk free corporate purchase.
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

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wisdom. Some evolved from accounting companies and some from management
consulting. 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 or channel development firms.
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. These companies will be calling on HTA 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, HTA 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.

Competition
The competition comes in several forms:
1. The most significant competition is no consulting at all, companies choosing to do
business development, planning 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, HTA 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: McKinsey, Boston 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: 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 HTA will provide.
4. The fourth kind of competition is the market-specific smaller house. For example:
Nomura Research in Japan.

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 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.

Management and Staffing

The initial management team depends on the founders themselves, with little back-up. As
we grow we will take on additional consulting help, plus graphic/editorial, sales, and
marketing. HTA should be mainly managed by working partners. In the beginning we
assume 3-5 partners. We will invite one international partner from Europe. The
organization has to be very flat in the beginning, with each of the founders responsible
for his or her own work and management.
The HTA business requires a very high level of international experience and expertise,
which means that it will not be easily leverageable in the common consulting company
mode in which partners run the business and make sales, while associates fulfill. Partners
will necessarily be involved in the fulfillment of the core business proposition, providing
the expertise to the clients.
The initial personnel plan is still tentative. It should involve 3-5 partners, 1-3 consultants,
1 strong marketing person, an office manager. Later we add more partners, consultants
and and sales staff.
The annual personal estimates are included in the tables presented below.

Headcount
Personnel 2011 2012 2013
Partners 4 5 5
Consultants 2 44
Marketing manager 1 1 1
Sales reps 1 2 2
Office manager 1 1 1
9 13 13

Monthly salary (USD)

Personnel 2011 2012 2013
Partners 4,200 5,500 6,000
Consultants 5,100 5,200 5,300
Marketing manager 4,600 4,700 4,800
Sales reps 4,200 4,400 4,600
Office manager 3,100 3,200 3,300

Personnel expenses (USD)

2011 2012 2013
Wages and salaries 466,800 780,000 822,000
Social security costs 70,020 117,000 123,300
Personnel expenses 536,820 897,000 945,300
REVENUES 1,175,000 1,850,000 2,450,000
Personnel expenses to revenues 45.7% 48.5% 38.6%

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Implementation
Total start-up expense (including legal costs, branding, stationery, other one time
expenses) come to $20,000. The annual overhead expense estimates are presented in the
table below.
Start-up assets required include $20,000 in fixed assets like office furniture, computers,
software and other equipment and tools.

Other operating expenses (USD)

Other operating expenses 2011 2012 2013
Startup expenses 50,000 0 0
Marketing 50,000 50,000 50,000
Travel 150,000 200,000 200,000
Office rent and utilities 75,000 100,000 75,000
Insurance 3,000 3,000 3,000
Other fixed expenses 5,000 7,500 5,000
333,000 360,500 333,000

Asset purchases (USD)

Fixed assets 2011 2012 2013
Startup fixed assets (equipment) 50,000 0 0
New equipment 0 50,000 0
50,000 50,000 0

Financial Projections
The paid-in capital from partners and other investors will be $120,000.
An annuity loan will be taken from a bank in amount of $50,000 for 24 months.
The performance measures, business plan financial projections and break-even analysis
are presented below.

Performance measures (USD)

2011 2012 2013
Sales revenue 1,175,000 1,850,000 2,450,000
Export sales 0 0 0
Cost of sales 297,500 457,500 610,000
Gross profit 877,500 1,392,500 1,840,000
Other operating revenue and expenses 0 0 0
Other operating expenses 333,000 360,500 333,000
Personnel expenses 536,820 897,000 945,300
Depreciation of fixed assets 10,000 20,000 20,000
Operating profit -2,320 115,000 541,700
EBITDA 7,680 135,000 561,700
Financial income and expenses -4,900 -4,425 -1,061

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Profit before income tax -7,220 110,575 540,639
Income tax expense -722 11,057 54,064
Profit -6,498 99,517 486,575

Operating margin -0.55% 5.38% 19.9%

Gross margin 74.7% 75.3% 75.1%
Sales per employee 130,556 142,308 188,462
Added value 544,500 1,032,000 1,507,000
Added value per employee 60,500 79,385 115,923

Return on equity p.a. -12.1% 65.0% 82.5%

Quick ratio 1.16 2.63 22.3
Current ratio 1.16 2.63 22.3
ISCR 1.57 30.5 529
DSCR 1.57 1.54 16.2
Debt to equity ratio 1.31 0.24 0.00
Debt to capitalization 56.7% 19.3% 0.49%

Receivables collection period, days 15.0 15.0 15.0

Payable period, days 15.0 15.0 15.0
Inventory period, days 0 0 0

Income statements (USD)

2011 2012 2013
Sales revenue 1,175,000 1,850,000 2,450,000
Export sales 0 0 0
Other operating revenue 0 0 0
Cost of sales 297,500 457,500 610,000
Other operating expenses 333,000 360,500 333,000
Personnel expenses
Wages and salaries 466,800 780,000 822,000
Social security costs 70,020 117,000 123,300
Total personnel expenses 536,820 897,000 945,300
Depreciation of fixed assets 10,000 20,000 20,000
Operating profit -2,320 115,000 541,700
Financial expenses
Interest expense 4,900 4,425 1,061
Total financial expenses 4,900 4,425 1,061
Profit before income tax -7,220 110,575 540,639
Income tax expense -722 11,057 54,064
Net profit for financial year -6,498 99,517 486,575

Balance sheets (USD)

2011 2012 2013
ASSETS
Current assets
Cash 46,212 61,475 465,802
Debts and prepayments
Trade receivables 48,968 77,093 102,087
Prepaid and deferred taxes 722 00
Other short-term receivables 0 0 0
Inventories
Inventories 0 0 0
Total current assets 95,901 138,568 567,889
Fixed assets
Tangible assets
Tangible assets 50,000 100,000 100,000
Less: Accumulated depreciation -10,000 -30,000 -50,000
Total 40,000 70,000 50,000

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Total fixed assets 40,000 70,000 50,000
Total assets 135,901 208,568 617,889
LIABILITIES and OWNERS' EQUITY
Liabilities
Current liabilities
Loan liabilities
Short-term loans and notes 0 0 0
Current portion of long-term loan liabilities 70,000 33,607 0
Total 70,000 33,607 0
Debts and prepayments
Trade creditors, goods 12,399 19,064 25,418
Trade creditors, other 0 00
Employee-related liabilities 0 0 0
VAT (GST) 0 0 0
Total 12,399 19,064 25,418
Total current liabilities 82,399 52,671 25,418
Long-term liabilities
Long-term loan liabilities
Loans, notes and financial lease payables 0 2,877 2,877
Deferred grant revenue 0 0 0
Total long-term liabilities 0 2,877 2,877
Total liabilities 82,399 55,549 28,295
Owners' equity
Share capital (nominal value) 60,000 60,000 60,000
Share premium 0 0 0
Retained profit/loss 0 -6,498 43,019
Current year profit -6,498 99,517 486,575
Total owners' equity 53,502 153,019 589,594
Total liabilities and owners' equity 135,901 208,568 617,889

Cash flow statement (1-6 month) (USD)

Jan-2011 Feb-2011 Mar-2011 Apr-2011 May-2011 Jun-2011
CASH FLOWS FROM OPERATING ACTIVITIES
Inflows
Payments from customers 48,958 97,915 97,915 97,915 97,915 97,915
Receipt of grant financing (operating
0 0 0 0 00
expenses)
Receipt of grant financing (personnel
0 0 0 0 0 0
expenses)
Receipt of other operating revenue 0 0 0 0 0 0
Total 48,958 97,915 97,915 97,915 97,915 97,915
Outflows
Payments to vendors (goods) 12,396 24,791 24,791 24,791 24,791 24,791
Payment of salaries and wages 38,900 38,900 38,900 38,900 38,900 38,900
Social security costs 5,835 5,835 5,835 5,835 5,835 5,835
Payments to vendors (operating
40,248 40,248 40,250 23,582 23,582 23,582
expenses)
Total 97,379 109,774 109,776 93,108 93,108 93,108
Net cash flow from operating activities -48,421 -11,859 -11,861 4,807 4,807 4,807

CASH FLOWS FROM INVESTING ACTIVITIES

Receipt of grant financing (assets) 0 0 0 0 0 0
Total 0 0 0 0 00
Outflows
Payments to vendors (assets) 50,000 0 0 0 0 0
Total 50,000 0 0 0 0 0
Net cash flow from investing activities -50,000 0 0 0 0 0

CASH FLOWS FROM FINANCING ACTIVITIES

Inflows
Inflows of nominal value 60,000 0 0 0 0 0
Inflows of share premium 0 0 0 0 00
Loan amounts received 70,000 0 0 0 0 0
Total 130,000 0 0 0 0 0
Outflows

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 Principal repayments 0 0 0 0 0 0
Interest expense 408 408 408 408 408 408
Dividends (net to shareholders) 0 0 0 0 0 0
Payment of corporate income tax 0 0 0 0 0 0
Corporate income tax (on dividends) 0 0 0 0 0 0
VAT Return 0 0 0 0 0 0
Total 408 408 408 408 408 408
Net cash flow from financing activities 129,592 -408 -408 -408 -408 -408

Net change in cash and cash equivalents 31,171 -12,267 -12,269 4,399 4,399 4,399
Cash and cash equivalents at the
0 31,171 18,903 6,634 11,032 15,431
beginning
Cash and cash equivalents at the end 31,171 18,903 6,634 11,032 15,431 19,830

Cash flow statement (3-6 quarter) (USD)

Q3-2011 Q4-2011 Q1-2012 Q2-2012
CASH FLOWS FROM OPERATING ACTIVITIES
Inflows
Payments from customers 293,745 293,755 434,380 462,495
Receipt of grant financing (operating expenses) 0 0 00
Receipt of grant financing (personnel expenses) 0 0 0 0
Receipt of other operating revenue 0 0 0 0
Total 293,745 293,755 434,380 462,495
Outflows
Payments to vendors (goods) 74,373 74,377 107,711 114,374
Payment of salaries and wages 116,700 116,700 195,000 195,000
Social security costs 17,505 17,505 29,250 29,250
Payments to vendors (operating expenses) 70,746 70,762 90,120 90,120
Total 279,324 279,344 422,081 428,744
Net cash flow from operating activities 14,421 14,411 12,299 33,751

CASH FLOWS FROM INVESTING ACTIVITIES

Receipt of grant financing (assets) 0 0 0 0
Total 0 0 00
Outflows
Payments to vendors (assets) 0 0 50,000 0
Total 0 0 50,000 0
Net cash flow from investing activities 0 0 -50,000 0

CASH FLOWS FROM FINANCING ACTIVITIES

Inflows
Inflows of nominal value 0 0 0 0
Inflows of share premium 0 0 00
Loan amounts received 0 0 50,000 0
Total 0 0 50,000 0
Outflows
Principal repayments 0 0 17,499 17,499
Interest expense 1,225 1,225 1,438 1,340
Dividends (net to shareholders) 0 0 0 0
Payment of corporate income tax 0 0 2,584 2,584
Corporate income tax (on dividends) 0 0 0 0
VAT Return 0 0 0 0
Total 1,225 1,225 21,520 21,422
Net cash flow from financing activities -1,225 -1,225 28,480 -21,422

Net change in cash and cash equivalents 13,196 13,186 -9,221 12,328
Cash and cash equivalents at the beginning 19,830 33,026 46,212 36,990
Cash and cash equivalents at the end 33,026 46,212 36,990 49,319

Cash flow statement (1-4 year) (USD)

2011 2012 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Inflows
Payments from customers 1,126,033 1,821,875 2,425,006
Receipt of grant financing (operating expenses) 0 00
Receipt of grant financing (personnel expenses) 0 0 0

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 Receipt of other operating revenue 0 0 0
Total 1,126,033 1,821,875 2,425,006
Outflows
Payments to vendors (goods) 285,101 450,835 603,646
Payment of salaries and wages 466,800 780,000 822,000
Social security costs 70,020 117,000 123,300
Payments to vendors (operating expenses) 333,000 360,500 333,000
Total 1,154,921 1,708,335 1,881,946
Net cash flow from operating activities -28,888 113,540 543,060

CASH FLOWS FROM INVESTING ACTIVITIES

Receipt of grant financing (assets) 0 0 0
Total 0 00
Outflows
Payments to vendors (assets) 50,000 50,000 0
Total 50,000 50,000 0
Net cash flow from investing activities -50,000 -50,000 0

CASH FLOWS FROM FINANCING ACTIVITIES

Inflows
Inflows of nominal value 60,000 0 0
Inflows of share premium 0 00
Loan amounts received 70,000 50,000 0
Total 130,000 50,000 0
Outflows
Principal repayments 0 83,516 33,607
Interest expense 4,900 4,425 1,061
Dividends (net to shareholders) 0 0 50,000
Payment of corporate income tax 0 10,335 54,064
Corporate income tax (on dividends) 0 0 0
VAT Return 0 0 0
Total 4,900 98,277 138,732
Net cash flow from financing activities 125,100 -48,277 -138,732

Net change in cash and cash equivalents 46,212 15,263 404,327

Cash and cash equivalents at the beginning 0 46,212 61,475
Cash and cash equivalents at the end 46,212 61,475 465,802

Capital structure (USD)

2011 2012 2013
Current assets 95,901 138,568 567,889
Fixed assets 40,000 70,000 50,000
Current liabilities 82,399 52,671 25,418
Long-term liabilities 0 2,877 2,877
Owners' equity 53,502 153,019 589,594

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