ace interviewers_business plan_2016-02-27

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Business Plan Ace Interviewer Group 1 2/27/2016 Mission Statement: Ace Interviewer seeks to instruct individuals to prepare and equip them for interviews. We strive to create the best candidates for employers to hire. By offering the best service possible, our members will see the value in investing in their future.

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Page 1: Ace Interviewers_Business Plan_2016-02-27

Business Plan

Ace Interviewer

Group 1

2/27/2016

Mission Statement: Ace Interviewer seeks to instruct individuals to prepare and equip them for interviews. We strive to create the best candidates for employers to hire. By offering the best service possible, our members will see the value in investing in their future.

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Contents

Executive Summary............................................................................................................................. 1

The Company Introduction............................................................................................................... 2

Business Sector..................................................................................................................................... 2

Challenges in the Industry................................................................................................................ 3

Figure 1. Products and Services Segmentation...................................................................................................4

Figure 2. Company Management Structure..........................................................................................................5

Organizational Timeline.................................................................................................................... 5

Product and Services........................................................................................................................... 6

The Marketing Segment..................................................................................................................... 7

Figure 3. Target Market - Age.....................................................................................................................................8

Figure 4. Education Target...........................................................................................................................................9

Advertisement & PR............................................................................................................................ 9

YouTube.............................................................................................................................................................. 9

Facebook.......................................................................................................................................................... 10

Google............................................................................................................................................................... 10

Radio................................................................................................................................................................. 10

TV........................................................................................................................................................................ 11

Customer Base.................................................................................................................................... 11

Competitor analysis.......................................................................................................................... 11

Pricing................................................................................................................................................... 12

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Figure 5. Premium Membership Prices...............................................................................................................12

............................................................................................................................................................................................... 12

SWOT Analysis.................................................................................................................................... 13

Strength............................................................................................................................................................ 13

Weakness......................................................................................................................................................... 13

Opportunity.................................................................................................................................................... 14

Threat................................................................................................................................................................ 14

IT Information.................................................................................................................................... 14

Operations........................................................................................................................................... 15

Figure 6. Interior Space Rough sketch floor plan............................................................................................17

Financial............................................................................................................................................... 17

Figure 7. Income Statement Highlights...............................................................................................................18

Figure 8. Five Year Income Statement Projection:.........................................................................................19

Figure 9. Five Year Cash Flow Projection:..........................................................................................................20

Figure 10. Industry Benchmark..............................................................................................................................21

Figure 11. Break Even.................................................................................................................................................22

Figure 12. Balance sheet Highlights (A)..............................................................................................................23

Figure 13. Balance Sheet Highlights (B)..............................................................................................................24

Future prospects in the industry & Exit plan...........................................................................25

References............................................................................................................................................ 26

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Executive Summary

Formed in 2016, Ace Interviewer’s mission is to prepare potential job candidates for

interviews for employers to hire. The goal is to ensure our customers, business professionals of

all levels, are comfortable and confident before, during and after the interview. To ensure high

visibility and a broad customer base, Ace Interviewer is looking to partner with LinkedIn to

provide an additional service for their existing members. Initially, the company will be managed

by its six founding directors; adjusting as business needs fluctuate. The approximate expected

customer base around 5,000 users, Ace Interviewer is expected to grow 26% over the next five

years from the base in 2016.

Being competitive in this market will allow us as a business to add value to our service,

with experts in industry coaching members, available resume assistance, and a profile picture

ranking feature will be of accesses for direct members and LinkedIn members.

Ace Interviewer has a service that can compete with competitors through high flexibility

and technology. Being partners with LinkedIn will allow our company to understand and provide

the specific service that is needed by members. Creating extra videos for members to have

available any time, live coaching with feedback, allowing customers be valued will allow Ace

Interviewer to distinguish itself from other providers.

Ace Interviewer created a marketing plan, according to information from the target

market and vision of the company, which will capitalize on its opportunity and be able to double

revenue for over the next few years. Ace Interviewer is forecasting revenues of $244,000 in Year

1 and growing to $421,000 in Year 2. Ace Interviewers is expected to reach profitability after

three years; the company is forecasted to break even and will be able to support its growth with

its previews loan without anticipating any need for a new loan or equity finance.

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As an exit plan, Ace Interviewer plans to sell or franchise the company depending on the

success of the business.

The Company Introduction

Ace interviewer started as an idea in 2016. As a group of Keller Students saw in the

market a specific need, it was decided that a company of coaching recent graduates and

experienced workers with interviewing was needed. It has been found that there will soon be

more job openings than people to fill them. With these many jobs people will need to be

prepared for interviews and first impressions. It is never easy to interview, Ace interviewer saw a

problem and will like to provide a solution.

The employment and recruitment agency is a billion dollar industry. Ace Interviewer has

a service that can prepare individuals for interviews in various industries. This type of practice

and training can lead members to great job positions and or promotions. Every year, there is a

large number of potential customers looking for work or looking to advance in their career. With

the right tools and proper interviewing skills they can succeed.

Business Sector

The employment and recruitment industry is $26 billion industry in USA. The industry is

growing at a stable growth rate. In the year 2010 to 2015, the industry had a growth rate of 5.3%.

The annual profit of the industry is more than $1 billion. It is expected that this industry would

continue to grow at a good growth rate. The students are important stakeholders of this industry

and there has been an exponential growth in the number of students enrolls for different courses.

In the last decade or so, the education level has increased in different parts of the world. Today,

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people are much more aware of the benefits of education and families have focused to provide

good education to their children. This can be seen as a positive sign for the industry. Therefore, it

is expected that this industry would continue to grow in the future.

The performance of this industry would depend a lot on the growth of corporations and

large companies. There would be more jobs in the market only when companies expand.

Therefore, the organizations in this industry should work with the mainline corporations to focus

on job creation and employment opportunities (Norman, 2016).

Challenges in the Industry

The industry is divided into number of organized and unorganized players. The organized

players in this industry are ‘Permanent Placement Services’ companies that provide place

assistance to students. These types of players constitute to near about 50% of the products and

services. Another important player in the market is ‘Executive Search Services’. These types of

players constitute to 33% of the products and services.

The complete segmentation for the year 2015 can be shown in Figure 1. Products and Services

Segmentation below.

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Figure 1. Products and Services Segmentation

It would be correct to say that this industry is in the maturity stage of the lifecycle model.

In the last five years, this industry has performed well. Over the past five years, the Employment

and Recruiting Agencies industry performed well as strengthening labor markets boosted

demand for recruiting and job placement services. However, this industry has witnesses several

challenges also. The challenges in this industry can be discussed as:

One of the biggest challenges in the industry is the penetration of online channels. Since

2012, the industry experienced decelerating growth as online technology continued to change

how businesses interacted and companies remained hesitant to invest in new permanent hires,

which resulted in a brief lull in demand for industry services in 2013. Another challenge for this

industry is the dependence on the external factors such as national unemployment rate. The

growth of this industry depends a lot the unemployment rate. It is important that the

unemployment rate should be under control. A high level or a very low level of unemployment

rate is not desired for the industry.

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Figure 2. Company Management Structure

We are starting out with us as the six founders of the business. The six of us will take

over each department that we specialize in. We will run and manage the company using a flat

organization structure. In the future as our company grows we will hope to us a matrix structure

for the benefit of planning other projects and services.

Organizational Timeline

Ace Interviewer will follow the three levels of strategic mission/phase implementation.

With each mission / phase depending on the previous mission/ phase to be up and running will

result in a sequence of a timeline.

The first phase is the Ace Interviewer virtual which will be functioning online by January

2017.

Owners/ Sponsers

Director of Marketing

Director of Research and

IT

Director Of Operations

Director of Product

Development

Director of Administration

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Ace Interviewer picture ranking function phase will be functioning 6 months after the first phase

has launched.

The membership selling phase will begin immediately after the virtual coach is ready to

launch in the first phase.

Ace Interviewer has planned after all that needs to be completed for a launch of service in

2017.

Product and Services

We will have two sets of memberships. One will be a part of LinkedIn, included in their

premium package as does Lynda.com. Users have different plans available to choose from. Each

plan adds extra features but all will include Ace interviewer (expect basic free LinkedIn

memberships). Next will be our direct members who will not have a LinkedIn page and would

like to purchase our services for half the price. The Virtual Coach will be a service that is

available in both memberships. The virtual coach is an online based service that will provide

coaching and practice for interviews.

Tips and etiquette guidelines is a service that will allow individuals with both

memberships who do not have time to speak with a virtual coach, to be able to know how to

conduct themselves in an interview. They can inform us of their industry and we will send our

specific guidelines for them to use for their future interview.

Picture ranking feature for linked in profiles is for LinkedIn premium members only. This

feature would include professionals rating a member’s profile picture on their professionalism.

This will include feedback on how to make the pictures better and how to improve on their

online first impressions.

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Last is the service of Resume Assistance for direct members only. Besides the difference

in price, direct members will be able to receive assistance and critiquing on their resumes and

how to improve them with keywords that companies in their field are looking for.

Future plans will include a possibility of franchising. As the company expands and

generate revenue franchising and branching off of our partner LinkedIn will be an opportunity.

Resume assistance will be made a service for all members as a future goal. Since LinkedIn has

thousands of members it will be very hard as a small company to receive thousands of resumes a

day to evaluate. So becoming a larger company that is capable to handle that amount of users is a

possibility.

Next in our future plans is coaching for larger organizations. If certain organizations do

not offer interview practice for employees that would like to advance within their company, we

can provide a service that will give them coaching. So, when it comes to an employee that may

have been in a position for 10+ years and has not interviewed in that amount of time, they can be

prepare for that promotion interview. Last will be our tutorial videos. As our customer base

grows we will not be able to provide live virtual coaching to everyone. For this reason offering

interview tutorial videos that are specified in certain fields will make it easier as a company and

accessible 24 hours a day for members.

The Marketing Segment

Ace Interviewer has entered a market with LinkedIn as the parent company, for assisting

users with preparing for interviews. Our target market will be towards young professionals and

experienced workers. We will analyze our competitors and evaluate different ways to promote

the company.

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Figure 3. Target Market - Age

Ages 15-19 Ages 19-24 Ages 24+0

2

4

6

8

10

12

14

LinkedInGoogleFacebook

Ages

Num

ber

of ta

rget

ed p

eopl

e (t

hous

ands

)

We are targeting young adults and older using different social media sites for

advertisement. Individuals in their starting early 20s are expected to have some work experience,

internship, and or education. For this reason most of our advertisement will be on LinkedIn,

Facebook, and Google.

Since we are planning a partnership with LinkedIn, most of our promoting will be on that

social media platform. Next we will promote on Facebook and Google. Google is the primary

search engine that people use, running ads on google to promote business can increase our

members. Facebook has such a broad amount of users, advertisements for users who are using

keywords like job, graduating, careers and others like it, will allow out business to be seen by

many.

Targeted Age

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Figure 4. Education Target

Education Level0

1

2

3

4

5

6

7

Education Target

Non College GradsCollege GradsGrad School Grads

Num

ber

of a

ds to

war

ds in

divi

dual

s

Marketing to this range of people will have to include digital and broadcasting strategy.

Ace Interviewer will be an online service with connection with most of the social media services

around the globe. It will be to our advantage to focus first our promotion online. There could be

possible promoting on local TV channels and radio stations.

Advertisement & PR

YouTube

YouTube the second largest video search in the world with more than 2 billion streamed

every day. YouTube will be an excellent medium to promote or services, not just because of

viewers, but because of its prices as well. YouTube advertisers pay per view, an average cost per

view ranges between $0.10 - $0.30.

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Facebook

Facebook is the most popular used social media currently. Facebook is going to allow our

company to take advantage of its advertisement services prices. Facebook will work with the

budget of any company. This means that Ace Interviewer will have the opportunity to choose

either a daily or a lifetime budget, along a spending package. Overall, the prices go from %1 and

up. The site allows for companies to choose between “cost per click” or “cost per impression”.

These options give our company the opportunity to target our specific audience.

Google

Google is by far the most widely used search engine in North America. Advertising on

Google is dependent on the bids companies make online regarding the keywords in ads;

otherwise known as AdWords. The average small business using AdWords spends between

$9,000 and $10,000 per month on their Google paid search campaigns. That's $100,000 to

$120,000 per year. However, a company like Ace Interviewer use the per click method.

Considering that clicks start from $0.10, it will be wise for the company to choose this strategy

for an approximation of $120,000 per year.

Radio

The cost of radio depends on the amount of people listening to the radio during the times

the commercial is played. In radio advertisement there is the Cost per Thousand (CPM) option.

CPM will allow the company to pay regarding the cost that the radio has paid to reach a certain

number of listeners. This strategy will provide an approximation range of $10 to $20 per week.

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TV

Being a start-up company it can limit our advertisement. However, if Ace Interviewer

decides to go and use that Television as an option, it will be possible to create a 30-second

commercial. Rates vary, depending on the time of day, the day, and location. The pay ay go from

$200 - $1 million.

Customer Base

We are expecting our customer base to be ages 20+, graduated from some form of higher

level trade or college, as well as experienced professionals that may want to change jobs or

advance career wise. We are offering a premium service that can be used for people who are

established or just getting started. Furthermore, our service is beneficial at any time for all

individuals who may need to interview at a point. We would like our customers to become

advocates and in the future trust our brand, value our company and promote our services.

Competitor analysis

Although LinkedIn is a large social network with many users, Ace Interviewer still has to

overcome numerous competitors. There are many consulting firms but not as many focus on the

subject of interviewing. There are a number of companies similar to ours for example,

360jobinterview.com, Monster.com, Careerbuilder.com, Skillfullydone.com,

Interviewcoach.com, and Impactinterview.com.

The main goal of these companies is to assist a user with improving their interview skills

and finding jobs. None of these businesses have larger parent companies to help with marketing

and promoting besides Monster, CareerBuilder, and BranchOut. BranchOut is a Facebook owned

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company that is being built to compete against LinkedIn. As a whole our industry is massive but

when it is broken down by objective, there aren’t as many competitors.

Pricing

Our company will be a subsidiary of LinkedIn. So, the LinkedIn premium membership

plans will include our services alongside of Lynda.com, which allows users to practice their

industry skills. The Premium Membership Prices are explained in image below.

Figure 5. Premium Membership Prices

Being a part of LinkedIn, our service will be included in their premium package starting at

$29.99. Direct members who will not have a LinkedIn can purchase our services at $14.99.

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SWOT Analysis

\\

Strength Ace Interviewer’s goal is to provide services for everyone. Our services include a

virtual coaching service and pointers on interview etiquette. Also our company will be partnered

up with LinkedIn, which will give us a leg up against our competitors.

Weakness Our Company is a new business in a new market so we are lacking a complete

strategy. Without a clear future business strategy this can hurt the company in the long-term.

STRENGTH

- Strong community

partnerships/collaboration

- Virtual service availability

THREAT

- Large market of

competitors.

- Budget

- Emergence of a substitute

service

- Seasonality

OPPORTUNITY

- New company methods

could lead to great profit.

- International Market

- Growing Sector increase

opportunity

WEAKNESS

- Lacks articulated strategy.

- No pre-existing track

record.

- Weak brand name

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Furthermore this could worry the stakeholders. Also like many other new companies we have no

pre-existing track record or a well-known brand name.

Opportunity There are many opportunities that Ace Interviewer will have. Some of them

include our company’s innovation for example our virtual interview coaching can lead to great

profit. There is a market demand for the service that our company provides. We have chance of

franchising after the company becomes established. Since, there aren’t many services like ours

we can be the first of its kind.

Threat As a new business we are faced with many threats. We are in a marketplace where

consulting companies have exhausted the industry. There is a large market of competitors that

can cause an emergence of a substitute service. Another threat would be our budget, being an

online business can become expensive depending on our technological growth. A last threat

could be seasonality. If our company has periods of the year when our business is popular it can

impact our profit. For example many college students graduate in May and January, If we only

see profits or an increase in users at this time there could be an issue within the rest of the year.

IT Information

Ace Interviewer is a business that will rely on technology to communicate with

customers and provide services. We will need a reliable and secure network and phone system

before we can open. Our phone system will be a CTI Phone system on a VoIP infrastructure, by

converting incoming calls to digital phone signals from the Internet to standard telephone audio.

This can also be used to manage and monitor phone calls.

Since we are basing our service virtually our company will need to use a cloud system to

save information. Spider Oak is what we decided to use because we will be dealing with

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sensitive information from the customer and they offer large amounts of cloud storage and

allows for the data to be encrypted by password for an affordable price. Spider Oak has an extra

2 GB for free (60-day trial). Also their plans start at $7 a month for 30GB and up to 5 TB.

Otherwise, pay monthly or annually. 1 TB for only $12 a month.

Our hardware will include The PCs that will be used in the work place are Dell Inspiron

20 3000 Series starting at $349.99 each (all in one computers).

The network we will use is the business network of Verizon because they use fiber optic

cabling. This makes internet speed faster with less buffering. This is important because we will

have the virtual coaching session that we have to ensure that is reliable and fast. Our video

service will be with Skype until we develop our own.

Operations

Ace Interviewer will be renting an office in Reno Nevada, as LinkedIn headquarter is

located in nearby Mountain View, California. The office space is 1700 sq. feet and the estimated

cost of Rent is ~ $4220 per month. Hours of operation will be 05:00 am to 06:00 pm west coast

time and at this point there are 5 employees in the company.

Different types of insurance that Ace Interviewers will have are General Liability

Insurance, Professional Liability Insurance and workers compensation which is ~$1.33 per $100.

The estimated cost of insurance is ~$5000-$10,000.

The necessary inspections that are required are, City of Reno Building and Fire

Inspection, National Fire Protection Association, Office of Inspector General of the U.S.

Department of Health & Human Services (HHS), Occupational (OSHA) and Environmental

Hazards.

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The necessary office furniture and equipment’s are Ergonomic Desks, Chairs, floor mats ,

tables, Filing cabinets, White boards, PC’s, Printers with scanning and faxing capability,

Telephones, dictation machines, laminating machines, etc. and the estimated is ~$ 45,500. All

the utilities Electricity, heat, Web, gas will be leased and estimated cost is $16,000.

Safety and security of employees will be done by providing health insurances and security

guards in the premises of the institute.

Fire and emergency procedures are part of building maintenance fee. There will be

facility of fire alarms in the offices and directly signaled to the fire authorities of the city when

required and fire extinguishers will be available at every point. Director and Operations Manager

will have the privileges of using company credit card and signing checks.

Marketing manager will be responsible for hiring and managing of outside consultants,

for maintaining up-to-date branding advertising and promotion materials, ( i.e. brochures,

flyers,), web and social media updates, for being the voice for social media, responding to chat,

tweets, customer comments, the public face and or voice for the firm, responding to media, press,

and public inquires.

Accounting and Operations Managers will be responsible for invoicing, and banking privileges,

with oversight from department directors.

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Figure 6. Interior Space Rough sketch floor plan.

Financial

Ace Interviewer’s financial projections came from a set of reliable assumptions, based off of

industry standards and data projections, and market research. Assumptions include taking into

account current rates for all business operating procedures, as well as a positive project growth.

Income Statement shows the projected revenue, profit and pretax operating tax flow for the first

five years Ace Interviewers will be in business.

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Figure 7. Income Statement Highlights

Figure 8. Five Year Income Statement Projection:

INCOME STATEMENT First Second Third Fourth FifthYear Year Year Year Year

Total Projected Revenues $243,75 $421,20 $454,89 $491,28 $530,59

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0 0 6 8 1 Purchased Goods & Services $0 0 0 0 0 Wages & Benefits: Owners' Salaries 0 0 0 0 0

Other Salaried Employees 0 1 1 1 1

Hourly Employees 0 0 0 0 0

Total Wages & Benefits 0 1 1 1 1

Marketing 2,000 2,060 2,122 2,185 2,251 Rent & Utilities 69,640 71,729 73,881 76,098 78,380 Depreciation Expense 11,632 11,632 11,632 11,632 11,632 Other Expenses: Distribution 0 0 0 0 0 General & Administrative 12,031 12,392 12,764 13,147 13,541 Total Other Expenses 12,031 12,392 12,764 13,147 13,541

OPERATING PROFIT (LOSS) 148,447 323,386 354,496 388,225 424,785

Pre-opening operating expenses 6,973 0 0 0 0 Pre-opening one-time expenses 10,000 0 0 0 0 Interest Expense 21,368 0 0 0 0 Profit or (Loss) Before Taxes 110,107 323,386 354,496 388,225 424,785 Income Taxes 37,436 109,951 120,529 131,997 144,427 Profit or (Loss) After Taxes $72,671 213,435 233,968 256,229 280,358

NOTE: Income Taxes have been reflected in the year due (cash basis)

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Figure 9. Five Year Cash Flow Projection:

FIVE YEAR CASH FLOW PROJECTION 2/27/2016Aceinterviewer Rpt C-2

First Second Third Fourth FifthCASH FLOW STATEMENT Year Year Year Year Year

Profit or (Loss) After Taxes $72,671 $213,435 $233,968 $256,229 $280,358

CASH FLOW adjustments:Add back Depreciation Expense 11,632 11,632 11,632 11,632 11,632

Minus Dividends 0 0 0 0 0Minus Capital Required: Capital Expenditures (58,160) (11,632) (11,632) (11,632) (11,632) Inventory Increases 0 0 0 0 0 Accounts Payable Increases 0 0 0 0 0 Accounts Receivable Increases (325,000) (26,000) (28,080) (30,326) (32,753)

Net Cash Inflow or (0utflow) before Financing (298,857) 187,435 205,888 225,902 247,606

Financing: Owners' Investment for Stock 50,000 0 0 0 0 Long-Term Loan borrowing or (payback) 350,000 (100,000) (100,000) (100,000) (50,000) Short-Term Loan borrowing or (payback) 7,000 (7,000) 0 0 0

Cash Balance at beginning of each year 0 108,143 188,577 294,465 420,367

Cash Balance at end of each year 108,143 $188,577 $294,465 $420,367 $617,973

Loan Balances outstanding at end of period:Long-Term Loan balances $350,000 $250,000 $150,000 $50,000 $0Short-Term Loan balances $7,000 $0 $0 $0 $0

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Figure 10. Industry Benchmark

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Figure 11. Break Even

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Figure 12. Balance sheet Highlights (A)

Rpt G

Aceinterviewer Year Year Year Year Year1 2 3 4 5

END OF YEAR BALANCES:Cash $108,143 $188,577 $294,465 $420,367 $617,973

Total Assets 479,671 586,105 720,073 876,301 1,106,660

Loan Balances 357,000 250,000 150,000 50,000 0

Stockholders Equity 122,671 336,105 570,073 826,301 1,106,660

NET CASH FLOW including start-up (298,857) 187,435 205,888 225,902 247,606Cumulative Aftertax 567,973

RETURN ON INVESTMENTPresent value of aftertax Net Cash Flows at rate of 3.0% 489,237Present value of afterrtax Owners Salaries & Benefits 0Minus Initial Investment -50,000

Net Present Value 439,237Return on Investment excluding terminal value 878.5%

TERMINAL VALUE USING EARNINGS MULTIPLESAfter Tax Net Earnings for Year 5 $280,358Range of Company Terminal Values:

Value at 5 X earnings $1,401,791Value at 7 X earnings $1,962,507Value at 10 X earnings $2,803,582

BALANCE SHEET HIGHLIGHTS

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Figure 13. Balance Sheet Highlights (B)

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Future prospects in the industry & Exit plan

It is expected that Ace Interviewer should be able to grow at a decent growth rate. It is

correct that there are certain challenges in the market. However, the organizations operating in

this industry segment should be able to overcome the challenges. The future of our business in

this industry would depend a lot on the way these companies can integrate with online players.

Going forward, the technology would be a key enabler for the companies operating in this

segment and it is important that companies should focus on sustainable growth rate with the

support of technology. We are expecting as an exit plan to be able to franchise, expand

internationally, and offer more services online.

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