The Metolius Agency is an Eugene, Ore. based graphic design and visual communications firm specializing in corporate identity for small to medium-sized companies established for five to 15 years. With a focus on both creative and business skills, Metolius offers a fresh perspective on corporate identity and visual communication. Operating out of a small office in the downtown area, the agency will start with one employee, Kiev Lartiste, who will be hiring an assistant by month seven. By providing well-priced projects, practical designs, and superior customer attention, Metolius aims to grow its customer base and reach profitability by month nine, generating $27,347 in profits by year three.

Graphic Design Business Plan Example

1.1 Objectives

The objectives for the first three years include:

  1. To develop a start-up graphics agency that will become profitable within year two.
  2. To create a company with the primary goal of exceeding customer expectations.
  3. To provide valuable services to target customers and offer the owner a flexible, creative, fun, and profitable business opportunity.

1.2 Mission

The mission of The Metolius Agency is to provide customers with creative and practical graphic design work and visual communication services. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed customer expectations.

1.3 Keys to Success

The keys to success are:

  • Professionalism
  • Creativity
  • Practical insight
  • Enjoyment of the experience

Company Summary

The Metolius Agency is a start-up graphics firm that serves small- to medium-sized companies. The firm will be based in Eugene, Ore. and will operate from a small, downtown office.

2.1 Company Ownership

The Metolius Agency is a sole proprietorship owned and operated by Kiev Lartiste.

2.2 Start-up Summary

The Metolius Agency will incur the following start-up costs:

  • Assorted office furniture including two filing cabinets, two work desks, a couch, two chairs for the waiting area, a round table with chairs, and assorted office fixtures.
  • Two computers, each with 21″ monitors, graphic tablet, black and white laser printer, inkjet color printer, scanner, CD-RW, and the following software: Illustrator, Freehand, Quark, Photoshop, Font Management Utilities, Traffic Office Manager (a scheduling and billing software), and Microsoft Project.
  • Development of the website, including design time by Kiev and implementation by a University of Oregon computer science graduate student.
  • A current library of magazines and journals required for the business.
  • A DSL connection.
  • Assorted office supplies.
  • Stationery and brochures.
  • Legal fees for business formation, creation of standard client contracts, and other general advice.

Please note that the following items, considered long-term assets, will be depreciated using G.A.A.P. approved straight-line depreciation method.

Graphic Design Business Plan Example

Start-up Funding

Start-up Expenses to Fund: $1,000

Start-up Assets to Fund: $42,000

Total Funding Required: $43,000

Assets

Non-cash Assets from Start-up: $19,800

Cash Requirements from Start-up: $22,200

Additional Cash Raised: $0

Cash Balance on Starting Date: $22,200

Total Assets: $42,000

Liabilities and Capital

Liabilities

Current Borrowing: $0

Long-term Liabilities: $0

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $0

Capital

Planned Investment

Kiev: $43,000

Investor 2: $0

Other: $0

Additional Investment Requirement: $0

Total Planned Investment: $43,000

Loss at Start-up (Start-up Expenses): ($1,000)

Total Capital: $42,000

Total Capital and Liabilities: $42,000

Total Funding: $43,000

Start-up Requirements

Start-up Expenses

Legal: $500

Stationery etc.: $250

Brochures: $250

Other: $0

Total Start-up Expenses: $1,000

Start-up Assets

Cash Required: $22,200

Other Current Assets: $0

Long-term Assets: $19,800

Total Assets: $42,000

Total Requirements: $43,000

Services

The Metolius Agency provides graphic design and visual communication services to established, primarily Eugene-based, companies. The services offered include corporate identity, marquees, logos, branding, and packaging.

The pricing of projects is typically estimated as a project-based cost. The cost will be estimated based on the approximate number of hours needed. Generally, Kiev will charge $75 an hour for services.

The majority of services will be provided at The Metolius Agency’s office space, which will be modern, practical, and sleek. This is important because the office of a graphic designer is a piece of their portfolio and reflects their work. Therefore, a decent amount of money will be used to develop a proper appearing business office.

Market Analysis Summary

The Metolius Agency will target small- to medium-sized companies. These companies have started small with a good idea and have grown into larger, more mature companies. They must now decide whether to maintain their current business strategy or reinvigorate the company, employ professional service providers, and move to the next level.

Market Segmentation

The Metolius Agency has two distinct customer groups:

– Small-size companies: typically five to 15 employees

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– Medium-size companies: 15 to 40 employees

These companies started with a valuable concept and leveraged their original grassroots visual communication elements. Now that they have matured, they can no longer rely on the original grassroots corporate identity. They need a professional firm like The Metolius Agency to expand their identity and compete at the same level as their competitors.

Graphic Design Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth

Small companies 8% 234 253 273 295 319 8.05%

Medium companies 7% 145 155 166 178 190 6.99%

Total 7.65% 379 408 439 473 509 7.65%

4.2 Target Market Segment Strategy

The market segments will be targeted in different ways. Graphics firms generate visibility and sales through networking and client referrals. The methods used for the target market segment strategy will be:

– Networking: leveraging personal and professional relationships to find potential customers within target companies.

– Client referral: gaining new customers through referrals from satisfied customers and the Chamber of Commerce.

– Targeted customer acquisition: researching and formulating strategies to attract specific companies as customers by demonstrating the value Metolius can offer them.

4.3 Service Business Analysis

The graphic design industry is diverse, with large advertising agencies, freelance designers, and in-house firms. The trend is moving towards full-service agencies, but The Metolius Agency will focus on their specific skill set.

4.3.1 Competition and Buying Patterns

Competitors include:

– Large advertising agencies: offering a wide range of services.

– Freelance designers: typically one-person operations.

– Kinko’s: providing creative services as a value-added benefit, but not on par with a professional agency.

Strategy and Implementation Summary

The Metolius Agency’s marketing and sales strategy will utilize networking and referrals to develop visibility for the company. Prospective customers will be turned into qualified sales through a professional presentation of Kiev’s portfolio.

5.1 Marketing Strategy

The Metolius Agency will rely on three activities in their marketing efforts:

– Networking: leveraging relationships to build more relationships within the local community.

– Client referral: providing outstanding customer attention to encourage long-term relationships and referrals.

– Targeted customer acquisition: identifying ideal customers, offering them value, and networking to connect with decision makers.

5.2 Sales Strategy

The sales strategy will utilize Kiev’s portfolio to qualify sales leads. Kiev will develop customized portfolios for different types of work to showcase his proficiency. In addition, research on prospective companies and their needs will be done to offer tailored solutions.

5.2.1 Sales Forecast

The first month will be used to set up the office. Months two to four will be slow as Kiev develops clients and takes on smaller projects. By month five, larger projects will be undertaken and steady growth will continue.

Graphic Design Business Plan Example

Sales Forecast:

Year 1 Year 2 Year 3

Sales

Small companies $29,339 $50,697 $58,849

Medium companies $40,058 $74,554 $86,543

Total Sales $69,397 $125,251 $145,392

Direct Cost of Sales:

Year 1 Year 2 Year 3

Small companies $880 $1,521 $1,765

Medium companies $1,202 $2,237 $2,596

Subtotal Direct Cost of Sales $2,082 $3,758 $4,362

5.3 Milestones:

The Metolius Agency will have several milestones early on:

1. Business plan completion

2. Office set up

3. Establishment of the first major account

4. Profitability

Graphic Design Business Plan Example

Milestones

Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Office set up 1/1/2001 2/1/2001 $0 ABC Department
Establishment of the first major account 1/1/2001 5/15/2001 $0 ABC Department
Profitability 1/1/2001 9/31/01 $0 ABC Department
Totals $0

5.4 Competitive Edge

The Metolius Agency’s competitive edge is based on Kiev’s diverse background of business and creativity. Most creative agencies are staffed by right-brain creative types, who are extremely aesthetically oriented. While this is an asset in graphic design, it can limit their work’s appeal to non-creative individuals in the business world.

Kiev’s background combines aesthetics and business. He has a creative streak, but his education is business-oriented. This allows The Metolius Agency to offer creative services like other firms while providing a unique business perspective.

Web Plan Summary

The website will disseminate information about the firm, showcase past work, and provide contact information for The Metolius Agency. In today’s world, a website is a standard source of company information.

6.1 Website Marketing Strategy

The marketing strategy for the website includes including the website address in all releases, as well as submitting it to popular websites. Customized submission to search engines is also crucial for maximum effectiveness.

6.2 Development Requirements

A graduate student from the University of Oregon’s computer science department will develop the website’s code. Kiev will handle the creative work. A graduate student is an ideal choice due to their expertise and below-market rate.

Management Summary

Kiev Lartiste received his Bachelor of Arts in graphic design and business administration from the University of Oregon. During his undergraduate degree, Kiev took graduate level business courses that challenged him. This unique combination of skills became apparent to him. While his colleagues in the art department had similar artistic skills, they lacked business sense. Likewise, his business colleagues struggled with creativity.

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After graduating, Kiev worked for Wieden & Kennedy in Portland, surrounded by bright, creative people. However, he couldn’t utilize his business skills fully. After three years, Kiev joined a large full-service advertising agency in Eugene. The increased management responsibility inspired him to open his own firm. After market research and creating a business plan, Kiev opened The Metolius Agency.

7.1 Personnel Plan

Kiev will be the sole employee for the first seven months. After, he will hire an assistant to help with design execution and administrative tasks.

Personnel Plan
Year 1 Year 2 Year 3
Kiev $42,000 $42,000 $42,000
Assistant $17,280 $34,560 $34,560
Total People 2 2 2
Total Payroll $59,280 $76,560 $76,560

Financial Plan

The following sections provide important financial information.

8.1 Important Assumptions

The following table details important financial assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis shows that approximately $7,000 in monthly revenue is needed to reach the break-even point.

Graphic Design Business Plan Example

Break-even Analysis:

Monthly Revenue Break-even: $7,053

Assumptions:

– Average Percent Variable Cost: 3%

– Estimated Monthly Fixed Cost: $6,841

8.3 Projected Profit and Loss:

The table below shows projected profit and loss.

Graphic Design Business Plan Example

Pro Forma Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $69,397 $125,251 $145,392
Direct Cost of Sales $2,082 $3,758 $4,362
Other Production Expenses $0 $0 $0
Total Cost of Sales $2,082 $3,758 $4,362
Gross Margin $67,316 $121,493 $141,030
Gross Margin % 97.00% 97.00% 97.00%
Expenses
Payroll $59,280 $76,560 $76,560
Sales and Marketing and Other Expenses $2,820 $2,820 $2,820
Depreciation $2,400 $2,400 $2,400
Website maintenance $600 $600 $600
Insurance $900 $900 $900
Rent $7,200 $7,200 $7,200
Payroll Taxes $8,892 $11,484 $11,484
Other $0 $0 $0
Total Operating Expenses $82,092 $101,964 $101,964
Profit Before Interest and Taxes ($14,776) $19,529 $39,066
EBITDA ($12,376) $21,929 $41,466
Interest Expense $0 $0 $0
Taxes Incurred $0 $5,859 $11,720
Net Profit ($14,776) $13,670 $27,347
Net Profit/Sales -21.29% 10.91% 18.81%

8.4 Projected Cash Flow

The chart and table below indicate projected cash flow.

Graphic Design Business Plan Example

Pro Forma Cash Flow

Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $69,397 $125,251 $145,392
Subtotal Cash from Operations $69,397 $125,251 $145,392
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $69,397 $125,251 $145,392
Expenditures
Expenditures from Operations
Cash Spending $59,280 $76,560 $76,560
Bill Payments $20,322 $32,111 $38,554
Subtotal Spent on Operations $79,602 $108,671 $115,114
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $79,602 $108,671 $115,114
Net Cash Flow ($10,205) $16,580 $30,278
Cash Balance $11,995 $28,575 $58,853

8.5 Projected Balance Sheet

The projected balance sheet is shown below.

Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $11,995 $28,575 $58,853
Other Current Assets $0 $0 $0
Total Current Assets $11,995 $28,575 $58,853
Long-term Assets
Long-term Assets $19,800 $19,800 $19,800
Accumulated Depreciation $2,400 $4,800 $7,200
Total Long-term Assets $17,400 $15,000 $12,600
Total Assets $29,395 $43,575 $71,453
Liabilities and Capital
Current Liabilities
Accounts Payable $2,172 $2,681 $3,213
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $2,172 $2,681 $3,213
Long-term Liabilities $0 $0 $0
Total Liabilities $2,172 $2,681 $3,213
Paid-in Capital $43,000 $43,000 $43,000
Retained Earnings ($1,000) ($15,776) ($2,106)
Earnings ($14,776) $13,670 $27,347
Total Capital $27,224 $40,894 $68,240
Total Liabilities and Capital $29,395 $43,575 $71,453
Net Worth $27,224 $40,894 $68,240

8.6 Business Ratios

The following table compares business ratios with the Standard Industry Code #7336, Graphic Design Services.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 80.48% 16.08% 9.02%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 52.57%
Total Current Assets 40.81% 65.58% 82.37% 76.45%
Long-term Assets 59.19% 34.42% 17.63% 23.55%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 7.39% 6.15% 4.50% 34.45%
Long-term Liabilities 0.00% 0.00% 0.00% 23.62%
Total Liabilities 7.39% 6.15% 4.50% 58.07%
Net Worth 92.61% 93.85% 95.50% 41.93%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 97.00% 97.00% 97.00% 100.00%
Selling, General & Administrative Expenses 118.29% 86.09% 78.19% 77.05%
Advertising Expenses 1.47% 0.81% 0.70% 1.42%
Profit Before Interest and Taxes -21.29% 15.59% 26.87% 0.83%
Main Ratios
Current 5.52 10.66 18.32 1.51
Quick 5.52 10.66 18.32 1.13
Total Debt to Total Assets 7.39% 6.15% 4.50% 66.33%
Pre-tax Return on Net Worth -54.28% 47.76% 57.25% 2.06%
Pre-tax Return on Assets -50.27% 44.82% 54.67% 6.12%
Additional Ratios
Net Profit Margin -21.29% 10.91% 18.81% n.a
Return on Equity -54.28% 33.43% 40.07% n.a
General Assumptions
1 2 3 4 5 6 7 8 9 10 11 12
1 2 3 4 5 6 7 8 9 10 11 12
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
0 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss:

Pro Forma Profit and Loss
1 2 3 4 5 6 7 8 9 10 11 12
Sales $0 $600 $1,500 $3,360 $4,496 $5,672 $6,945 $8,005 $8,790 $9,312 $9,724 $10,994
Direct Cost of Sales $0 $18 $45 $101 $135 $170 $208 $240 $264 $279 $292 $330
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $18 $45 $101 $135 $170 $208 $240 $264 $279 $292 $330
Gross Margin $0 $582 $1,455 $3,259 $4,361 $5,502 $6,737 $7,765 $8,526 $9,033 $9,432 $10,664
Gross Margin % 0.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00% 97.00%
Profit Before Interest and Taxes ($5,185) ($4,603) ($3,730) ($1,926) ($824) $317 ($1,760) ($732) $29 $536 $935 $2,167
EBITDA ($4,985) ($4,403) ($3,530) ($1,726) ($624) $517 ($1,560) ($532) $229 $736 $1,135 $2,367
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($5,185) ($4,603) ($3,730) ($1,926) ($824) $317 ($1,760) ($732) $29 $536 $935 $2,167
Net Profit/Sales 0.00% -767.17% -248.67% -57.32% -18.33% 5.58% -25.34% -9.14% 0.33% 5.75% 9.62% 19.71%

Pro Forma Cash Flow:

Pro Forma Balance Sheet

Pro Forma Cash Flow
1 2 3 4 5 6 7 8 9 10 11 12
Cash Sales $0 $600 $1,500 $3,360 $4,496 $5,672 $6,945 $8,005 $8,790 $9,312 $9,724 $10,994
Subtotal Cash from Operations $0 $600 $1,500 $3,360 $4,496 $5,672 $6,945 $8,005 $8,790 $9,312 $9,724 $10,994
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Starting Balances
Assets
Cash $22,200 $18,651 $14,265 $10,761 $9,089 $8,498 $9,049 $7,943 $7,442 $7,693 $8,444 $9,592 $11,995
Other Current Assets $0
Total Current Assets $22,200 $18,651 $14,265 $10,761 $9,089 $8,498 $9,049 $7,943 $7,442 $7,693 $8,444 $9,592 $11,995
Long-term Assets
Long-term Assets $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800 $19,800
Accumulated Depreciation $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400
Total Long-term Assets $19,800 $19,600 $19,400 $19,200 $19,000 $18,800 $18,600 $18,400 $18,200 $18,000 $17,800 $17,600 $17,400
Total Assets $42,000 $38,251 $33,665 $29,961 $28,089 $27,298 $27,649 $26,343 $25,642 $25,693 $26,244 $27,192 $29,395
Liabilities and Capital
Current Liabilities
Accounts Payable $0 $1,436 $1,453 $1,479 $1,533 $1,566 $1,600 $2,055 $2,085 $2,108 $2,123 $2,135 $2,172
Current Borrowing $0
Other Current Liabilities $0
Subtotal Current Liabilities $0 $1,436 $1,453 $1,479 $1,533 $1,566 $1,600 $2,055 $2,085 $2,108 $2,123 $2,135 $2,172
Long-term Liabilities $0
Total Liabilities $0 $1,436 $1,453 $1,479 $1,533 $1,566 $1,600 $2,055 $2,085 $2,108 $2,123 $2,135 $2,172
Paid-in Capital $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000
Retained Earnings ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000) ($1,000)
Earnings $0 ($5,185) ($9,788) ($13,518) ($15,444) ($16,268) ($15,951) ($17,712) ($18,444) ($18,415) ($17,879) ($16,944) ($14,776)
Total Capital $42,000 $36,815 $32,212 $28,482 $26,556 $25,732 $26,049 $24,288 $23,556 $23,585 $24,121 $25,056 $27,224
Total Liabilities and Capital $42,000 $38,251 $33,665 $29,961 $28,089 $27,298 $27,649 $26,343 $25,642 $25,693 $26,244 $27,192 $29,395
Net Worth $42,000 $36,815 $32,212 $28,482 $26,556 $25,732 $26,049 $24,288 $23,556 $23,585 $24,121 $25,056 $27,224

Graphic Design Business Plan Example

Business Plan Outline

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