Business Plan

I also will give advertisement in newspapers and on printed buckets that will be spread at the doorways of the shopping centers.

Finally, I plan to use the Internet advertising; mostly banners that will be located at the Irkutsk on-line shops. I plan to make the exchange of banners to avoid the payment for advertisement.

SELLING TACTICS

Cash and Accounts Receivables

All sales will be made in cash, as invoices and credit cards are not yet actively used in Russia. So for the first three year I will not plan to use accounts receivables. Only after the third year, when the phone-consulting center will be opened, I plan to sell information on credit by phone bills. Such system assumes that the phone companies will clear these bills, and then their clients pay for the whole phone bill, in which the amount of my bill will be included. So, the management of account receivables will not be complex, and will be secured by the phone companies’ liabilities.

Peak sales

As I plan to establish consultant service by using database that helps to find products, my sales will depend on the sales of market. Within Russia, most retail sales occur during the New Year holiday season and during the season of the men’s and the women’s holidays (February 23 and Mart 8). As a result, the biggest sales will be during the winter season because during that time there are the biggest quantity of clients, but at this time there is also a downturn in cash. I think that some decline will be at other seasons, especially during summer because a lot of people are going on vocation. There is an increase in sales at the end of summer because students prepare for school and colleges and buy a lot of non-food things. So, the best time is the end of December, the end of February, the beginning of Mart, the end of August and the beginning of September. During this time, I will have the biggest cash inflow.

OPERATIONS PLAN

Each consulting center will be located at the doorways of the shopping centers. The average square of a center will be 16 m² . One center will have the computer (Pentium 3, 550-750 hertz, 128 RAM) with a monitor and a modem, the printer (Canon LBP-800) and a telephone/fax. Each computer will have the database of goods at markets, Windows 2000, Microsoft Office package, the Internet application and Web-design programs. Office equipment will be a computer table, a chair, and the document cupboard. In addition each consulting center will have the pack of paper for printing and some writing implements. A manager will deliver the cartridges for a printer, when they are necessary.

The working time of my business will be the same as the working time of the shopping center «Irkutskiy», the shopping center «Fortuna», and the shopping center «Complex». The «Irkutskiy» and the «Complex» working hours are from 10 am to 8 pm, so the consulting centers in these markets will be opened during this time. The consulting center in the shopping center «Fortuna» will work from 9 am to 7 pm. The web site will be available 24 hours a day. The phone center will work from 9 am to 9 pm.

The information will be updated by consultants of consulting centers that have liabilities to collect changes in information after the workday and put it in the database.

FINANCIAL PLAN

Necessary Financing

For my operation I will need $2,250 at the beginning of the second year of existence. If the demand for my service will be as projected then I will open the second consulting center in the shopping center «Fortuna», so I will need financing to buy the fixed assets. This loan will be necessary to support my development.

Cash Budget

Balance Sheet

Income Statement

The amounts are given as they are in Russia

Ratio Analysis

I did not indicate accounts receivables and accounts payables, as my business will be very small and all operations will be done in cash by personal sales during first three years. In addition, invoices and credit cards are not common in Russia, so it is one more reason of not indicating them. So, I did not count liquidity ratios, as all of them are based on current liabilities.

From my analysis of projected future operations, we can see that debt ratio will decrease in 2004 and 2005 from 0,25 to 0,18. It tells about the decrease of funds provided by creditors and increase in the attractiveness of business for investments, as creditors prefer lower ratios. Debt -to-net worth ratio will also decrease in 2004 and 2005 from 0,46 to 0,30, what tells about the increase of business’s ability to meet both its creditor and owner obligations in case of liquidation. The times interest earned ratio will decrease. It indicates that the firm will have fewer difficulties in meeting the interest payments of loan. The net income can decrease almost by ten times until the business will not be able to pay its interest obligations in 2005.

The fixed assets turnover will constantly increase, what indicates the increase of effectiveness of the fixed asset usage. The total assets turnover ratio will decrease from 2003 to 2004 and increase from 2004 to 2005. It tells about the decrease of the volume of the business produced on the total asset investment in 2004 and increase of it in 2005. The main cause of decrease will be more significant increase in total assets and less significant in sales.

The profit margin on sales ratio will slightly increase in 2004 and more significantly decrease in 2005. It indicates the decrease of income per dollar for the first three years of existence. The cause of the decrease in 2005 will be the more intensive use of debt.

The ROA will constantly decrease in the first three years of existence of the business. It indicates the decrease of the return on assets. The cause of it will be more significant increase in total assets and less significant in net income.

The ROE will increase from 2003 to 2004. It will indicate the increase in the rate of return on the owner’s investments. The cause of it will be more intensive use of debt. But in 2005 there will decrease in ROE, what is explained by the more significant increase in equity and less significant in net income.

Depreciation Estimation

I will use the modified accelerated cost recovery system method of depreciation. According to my opinion it is the best for me because it will allow getting some tax savings because of the decrease of income due to accelerated depreciation.

Fixed Capital Estimation

I made the estimation for the first year. As all assets are almost the same in each consulting service than I determined the price for the next period by making inflation adjustments.

Working Capital Estimation

I also made the estimation for the first year, as with the fixed capital, and than determined the price for the next period by making inflation adjustments.

Basing on the cash receipt forecast, I will need 1*$78,50+4*$62,71+1*$42,64= $62 a year for working capital.

Marketing Estimation

The sales estimation I based on the next assumptions:

1. The share of the ''Irkutskiy'' market will decrease, as there will appear some competitors.

The amount of purchases a day in average in the "Irkutskiy" market:

in items

2. The share of the the ''Fortuna'' martet will decrease as there will appear some competitors.

The amount of purchases a day in average in the "Fortuna" market:

in items

3. The share of the ''Complex'' market will stay constant.

The amount of purchases a day in average in the "Complex" market:

in items

The assumed amount of potential clients that will use my database:

Share:

The amount of potential clients a day

The amount of potential clients a year:

The projected sales price

Advertisement expenses

Labor Expenses

Labor expenses are based on assumption that every year I will open one additional consulting center. So, there should be one additional consultant each year.

A month:

A year:

Rent Expense Estimation

Rent, a year

MANAGEMENT PLAN

As I plan to organize small venture, I decided to use simple structure for management.

The responsibility of manager : develop database, programming, accounting, transport, managing finance, human resource, and operational activities.

The responsibility of consultants: serve clients and update database, look after equipment

This structure and distribution of functions are optimal for such businesses as I plan to organize.

HUMAN RESOURCES PLAN

The manager of the firm should be able to use specific program tools. He or She should have manager/economic education and have some experience in working for a consulting firm. The manager should know financing, programming, basics of human resource management, and accounting.

The consultant should have computer skills, know programming and be able to work with the Internet effectively.

As I stated in the financing plan I plan to hire one more consultant each year because I plan to open new consulting center each year.

As my venture is small and does not have much financing I will not plan to pay for all medical insurance expense of employees, but I will provide transportation from home to work and from work to home. I plan to establish friendly environment that will help to organize work more effectively.

The motivation will be based on the salary % and on the opportunity of realization available knowledge.

CONCLUSIONS

This venture will help people to save their time and money. It will help to find what is necessary more quickly.

According to market plan it has good opportunities for development and if the market strategy is right than it might be quite profitable. Next, by using effective management tactics the organization of the work process will be on the highest level. In addition, the use of cash sales will help to held cash balance in good condition. Finally, prepared and qualified personal will be the guaranty of stable development.

As a result of this venture clients find products more quickly, and sellers get new clients, consequently, everybody win. So, this venture has a lot of perspectives.