Office Space Solutions improves businesses by specializing in high-growth companies and providing paper flow, communication, and office system restructuring. This includes assessing office space organization and process flow to achieve a complete turnaround, increasing efficiency, reducing costs, boosting income, and improving employee satisfaction.
Office Space Solutions has two competitive advantages. Firstly, it has extensive experience in office space management and work flow efficiency. Owner Bev Johnson has spent the past 10 years working with three successful start-up companies, effectively managing personnel growth and enhancing employee productivity. Furthermore, Bev’s industry connections provide valuable networking opportunities, giving Office Space Solutions an edge over competitors.
Office Space Solutions’s mission is to provide high-quality support services for its clients. The focus is to attract and maintain customers, with the belief that everything else will fall into place when this is achieved. The company aims to exceed customer expectations with its services.
Office Space Solutions offers management support services to start-up and growing firms and companies. The company sets up, restructures, and streamlines office space, paper flow, communication, and office systems. This work reduces office operation costs while increasing work efficiency and revenue for clients.
The start-up expenses for Office Space Solutions include a computer system with a printer, CD-RW, Microsoft Office, and Microsoft Access, as well as a copier, fax, and one phone line. Website development and various office supplies are also part of the start-up expenses.
Start-up Requirements:
– Legal: $0
– Stationery, etc.: $100
– Brochures: $200
– Expensed Equipment: $3,000
– Other: $0
– Total Start-up Expenses: $3,300
Start-up Assets:
– Cash Required: $6,700
– Other Current Assets: $2,000
– Long-term Assets: $0
– Total Assets: $8,700
Total Requirements: $12,000
Start-up Funding:
– Start-up Expenses to Fund: $3,300
– Start-up Assets to Fund: $8,700
– Total Funding Required: $12,000
Assets:
– Non-cash Assets from Start-up: $2,000
– Cash Requirements from Start-up: $6,700
– Additional Cash Raised: $0
– Cash Balance on Starting Date: $6,700
– Total Assets: $8,700
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:
– Investor 1: $7,000
– Investor 2: $5,000
– Other: $0
– Additional Investment Requirement: $0
– Total Planned Investment: $12,000
– Loss at Start-up (Start-up Expenses): ($3,300)
– Total Capital: $8,700
Total Capital and Liabilities: $8,700
Total Funding: $12,000
Company Ownership:
Bev Johnson is the sole owner and consultant of Office Space Solutions. Office Space Solutions is a home-based business. All business meetings will occur at the client’s business or at a location close to the client’s business.
Services:
– Planning, setting up, or improving office procedures, including simplifying paper flow, minimizing wasted time, and maximizing access to materials.
– Controlling costs and minimizing expenses with improved office efficiency and methods.
– Managing office relocations, including vendor negotiations and problem-solving.
Market Analysis Summary:
Office Space Solutions will focus on a specific part of the business market:
– Start-ups with more than five employees.
– Small businesses rapidly expanding operations.
The city has several support service businesses but none as visible or successful as Office Space Solutions.
Target Market Segment Strategy:
Office Space Solutions will focus on new and growing companies located in small offices. The targeted start-up business will have four or more staff members in addition to an owner. This is a perfect atmosphere for a support service because the services provided by Office Space Solutions are crucial to their success and outside the business’s expertise. Focusing on growing businesses allows for competitiveness with smaller businesses and targets a segment not currently marketed by competitors.
Service Business Analysis:
The competition consists of a few support service firms offering a wide range of services to large companies in the city. However, these firms do not target the crucial area of new and growing businesses like Office Space Solutions does. By focusing solely on these companies, Office Space Solutions can provide a service that understands their problems and specific needs. Target clients often look for long-term relationships with critical services, making it more cost-effective and convenient to stick with one provider.
Market Segmentation:
The market for office space and workflow organizers can be divided into two important segments:
– Start-ups with five or more employees: These start-ups lack in-house expertise to solve office space or workflow management problems. Office Space Solutions believes this is an underserved segment and can become an invaluable service to these target clients. As these companies grow, they will provide repeat business.
– Small rapidly growing companies: These companies have achieved some success but may face operational problems as they expand. Each stage of growth presents challenges that Office Space Solutions can address, helping them achieve their sales goals.
Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Start-Up 15% 535 615 707 813 935 14.98%
Growing Business 10% 634 697 767 844 928 9.99%
Other 0% 0 0 0 0 0 0.00%
Total 12.36% 1,169 1,312 1,474 1,657 1,863 12.36%
Strategy and Implementation Summary
Office Space Solutions will sustain its competitive advantages to gain market share. The first advantage is extensive knowledge of office space management and work flow efficiency. The second advantage is an established network of contacts among start-ups and growing companies.
Competitive Edge
Office Space Solutions’ competitive edge is Bev Johnson’s ten years as the go-to person for new businesses with space management and work flow questions. Referrals have all occurred through word of mouth from Bev’s network of office manager contacts. Her industry access is invaluable for networking. These relationships create trust and generate new referrals.
Bev has given presentations on space and process management for professional women’s groups and the city’s Chamber of Commerce.
Bev has been pivotal in the success of three start-ups over the past ten years. In each case, she was hired for her success in transforming chaotic office environments into productive spaces.
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Sales Strategy
Office Space Solutions’ sales strategy will be based on person to person contacts with new and growing businesses. Bev has compiled a list of referrals that will serve as the launching pad.
The following table and chart provide a forecast of sales. As a consulting firm, there are negligible cost of sales, and Bev’s salary is included in the Personnel table.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Start-Ups $19,606 $30,000 $40,000
Growing Businesses $38,164 $50,000 $60,000
Total Sales $57,770 $80,000 $100,000
Direct Cost of Sales
Year 1 Year 2 Year 3
Start-Ups $0 $0 $0
Growing Businesses $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0
5.3 Milestones
Office Space Solutions will have several milestones early on:
– Office set up.
– Exceed $50,000 in sales the first year.
Milestones:
– Milestone
– Start Date
– End Date
– Budget
– Manager
– Department
– Office Set up
– 11/1/2001
– 1/1/2002
– $0
– BJ
– Owner
– Hire Assistant
– 9/1/2002
– 9/30/2002
– $0
– BJ
– Owner
– Exceed $50,000 in Sales
– 1/1/2002
– 12/30/2002
– $0
– BJ
– Owner
– Totals
– $0
Management Summary:
Bev Johnson, founder and owner, received her Bachelor Degree in business management from Willamette University. During her undergraduate studies, Bev created her support staff company, including typing students’ term papers. This was lucrative because many students at Willamette preferred to pay someone else to do their typing.
After college, Bev worked in various office settings, developing her skills in cutting waste and inefficiency. She became an office manager at Renco, a high-tech start-up that grew from 15 people to over 59 employees in three years. She then worked as the office coordinator for Carter Technology, where the staff grew from 30 people to 89 employees in three years. Before starting Office Space Solutions, Bev worked at Steward Consulting, which grew from 45 employees to over 258 staff members in four years.
Towards the end of her time at Steward Consulting, Bev sought a new challenge that she could take on independently. She realized that she could leverage her knowledge of office efficiency to start a new business.
Personnel Plan:
– Year 1
– Year 2
– Year 3
– Owner
– $32,000
– $40,000
– $47,000
– Part-time assistant
– $3,000
– $16,000
– $18,000
– Other
– $0
– $0
– $0
– Total People
– 0
– 0
– 0
– Total Payroll
– $35,000
– $56,000
– $65,000
The following sections outline the financial assumptions, key financial indicators, break-even analysis, profit and loss, cash flow, and the balance sheet.
Important Assumptions:
– General Assumptions
– Year 1
– Year 2
– Year 3
– 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
Break-even Analysis:
The table and chart below indicate the monthly revenue needed to break even.
Break-even Analysis
| Break-even Analysis | |
| Monthly Revenue Break-even | $3,576 |
| Assumptions: | |
| Average Percent Variable Cost | 0% |
| Estimated Monthly Fixed Cost | $3,576 |
7.3 Projected Profit and Loss
The table indicates projected profit and loss.
Pro Forma Profit and Loss
Sales: Year 1 – $57,770, Year 2 – $80,000, Year 3 – $100,000
Direct Cost of Sales: $0
Other Production Expenses: $0
Total Cost of Sales: $0
Gross Margin: Year 1 – $57,770, Year 2 – $80,000, Year 3 – $100,000
Gross Margin %: 100.00%
Expenses:
Payroll: Year 1 – $35,000, Year 2 – $56,000, Year 3 – $65,000
Sales and Marketing and Other Expenses: Year 1 – $2,660, Year 2 – $3,200, Year 3 – $4,150
Depreciation: $0
Leased Equipment: $0
Utilities: $0
Insurance: $0
Rent: $0
Payroll Taxes: Year 1 – $5,250, Year 2 – $8,400, Year 3 – $9,750
Other: $0
Total Operating Expenses: Year 1 – $42,910, Year 2 – $67,600, Year 3 – $78,900
Profit Before Interest and Taxes: Year 1 – $14,860, Year 2 – $12,400, Year 3 – $21,100
EBITDA: Year 1 – $14,860, Year 2 – $12,400, Year 3 – $21,100
Interest Expense: $0
Taxes Incurred: Year 1 – $4,458, Year 2 – $3,720, Year 3 – $6,330
Net Profit: Year 1 – $10,402, Year 2 – $8,680, Year 3 – $14,770
Net Profit/Sales: Year 1 – 18.01%, Year 2 – 10.85%, Year 3 – 14.77%
7.4 Projected Cash Flow
The following chart and table indicate projected cash flow.
Pro Forma Cash Flow
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash Sales | $31,774 | $44,000 | $55,000 |
| Cash from Receivables | $18,069 | $32,950 | $42,256 |
| Subtotal Cash from Operations | $49,843 | $76,950 | $97,256 |
| 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 | $49,843 | $76,950 | $97,256 |
7.5 Projected Balance Sheet
The following table indicates the projected balance sheet.
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $11,286 | $16,064 | $28,493 |
| Accounts Receivable | $7,927 | $10,977 | $13,722 |
| Other Current Assets | $2,000 | $2,000 | $2,000 |
| Total Current Assets | $21,213 | $29,041 | $44,215 |
| Long-term Assets | |||
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $21,213 | $29,041 | $44,215 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $2,111 | $1,259 | $1,663 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Total Current Liabilities | $2,111 | $1,259 | $1,663 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $2,111 | $1,259 | $1,663 |
| Paid-in Capital | $12,000 | $12,000 | $12,000 |
| Retained Earnings | ($3,300) | $7,102 | $15,782 |
| Earnings | $10,402 | $8,680 | $14,770 |
| Total Capital | $19,102 | $27,782 | $42,552 |
| Total Liabilities and Capital | $21,213 | $29,041 | $44,215 |
| Net Worth | $19,102 | $27,782 | $42,552 |
7.6 Business Ratios
The following table outlines important ratios from the Management Consulting Services industry. The final column, Industry Profile, details specific ratios based on the industry as classified by the NAICS code, 541618.
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 38.48% | 25.00% | 12.40% |
| Percent of Total Assets | ||||
| Accounts Receivable | 37.37% | 37.80% | 31.03% | 26.10% |
| Other Current Assets | 9.43% | 6.89% | 4.52% | 44.70% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 74.50% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 25.50% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | ||||
| Accounts Payable | 2,111 | 1,259 | 1,663 | 44.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 16.00% |
| Total Liabilities | 2,111 | 1,259 | 1,663 | 60.30% |
| Net Worth | 90.05% | 95.66% | 96.24% | 39.70% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 100.00% | 100.00% | 100.00% | 0.00% |
| Selling, General & Administrative Expenses | 81.99% | 89.15% | 85.23% | 80.80% |
| Advertising Expenses | 2.42% | 1.88% | 2.00% | 1.30% |
| Profit Before Interest and Taxes | 25.72% | 15.50% | 21.10% | 2.20% |
| Main Ratios | ||||
| Current | 10.05 | 23.06 | 26.59 | 1.75 |
| Quick | 10.05 | 23.06 | 26.59 | 1.38 |
| Total Debt to Total Assets | 9.95% | 4.34% | 3.76% | 0.30% |
| Pre-tax Return on Net Worth | 77.79% | 44.63% | 49.59% | 3.80% |
| Pre-tax Return on Assets | 70.05% | 42.70% | 47.72% | 9.70% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 18.01% | 10.85% | 14.77% | n.a |
| Return on Equity | 54.46% | 31.24% | 34.71% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 3.28 | 3.28 | 3.28 | n.a |
| Collection Days | 55 | 96 | 100 | n.a |
| Accounts Payable Turnover | 5.86 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 40 | 26 | n.a |
| 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 | ||
| Assets | Starting Balances | ||||||||||||
| Current Assets | |||||||||||||
| Cash | $6,700 | $5,571 | $4,496 | $4,113 | $4,239 | $3,548 | $3,558 | $3,783 | $4,608 | $5,858 | $6,868 | $8,749 | $11,286 |
| Accounts Receivable | $0 | $721 | $1,688 | $2,081 | $2,425 | $2,786 | $3,262 | $3,806 | $4,372 | $5,060 | $5,924 | $6,986 | $7,927 |
| Other Current Assets | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 |
| Total Current Assets | $8,700 | $8,292 | $8,184 | $8,194 | $8,663 | $8,334 | $8,820 | $9,589 | $10,981 | $12,918 | $14,792 | $17,735 | $21,213 |
| Long-term Assets | |||||||||||||
| Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Assets | $8,700 | $8,292 | $8,184 | $8,194 | $8,663 | $8,334 | $8,820 | $9,589 | $10,981 | $12,918 | $14,792 | $17,735 | $21,213 |
| Liabilities and Capital | |||||||||||||
| Current Liabilities | |||||||||||||
| Accounts Payable | $0 | $294 | $468 | $485 | $625 | $534 | $747 | $892 | $1,117 | $1,342 | $1,492 | $1,849 | $2,111 |
| Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Subtotal Current Liabilities | $0 | $294 | $468 | $485 | $625 | $534 | $747 | $892 | $1,117 | $1,342 | $1,492 | $1,849 | $2,111 |
| Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Liabilities | $0 | $294 | $468 | $485 | $625 | $534 | $747 | $892 | $1,117 | $1,342 | $1,492 | $1,849 | $2,111 |
| Paid-in Capital | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 |
| Retained Earnings | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) | ($3,300) |
| Earnings | $0 | ($702) | ($984) | ($991) | ($662) | ($900) | ($627) | ($3) | $1,164 | $2,876 | $4,600 | $7,186 | $10,402 |
| Total Capital | $8,700 | $7,998 | $7,716 | $7,709 | $8,039 | $7,800 | $8,074 | $8,697 | $9,864 | $11,576 | $13,300 | $15,886 | $19,102 |
| Total Liabilities and Capital | $8,700 | $8,292 | $8,184 | $8,194 | $8,663 | $8,334 | $8,820 | $9,589 | $10,981 | $12,918 | $14,792 | $17,735 | $21,213 |
| Net Worth | $8,700 | $7,998 | $7,716 | $7,709 | $8,039 | $7,800 | $8,074 | $8,697 | $9,864 | $11,576 | $13,300 | $15,886 | $19,102 |
Business Plan Outline
- Executive Summary
- Company Summary
- Services
- Market Analysis Summary
- Strategy and Implementation Summary
- Management Summary
- Financial Plan
- Appendix
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