my subject is capstone project.we r running one bicycle shop business by 4 member i need all financial plan with defination,we r running this business in sydney cbd

1.1 About the company

The Blue Sapphire is a recruitment agency which focuses on providing low cost employment services to small to medium sized businesses all over Australia and New Zealand.  We provide employment under the Australian Government’s Administrative & Office Support Staff. We are dedicated in providing job seekers a meaningful work and become self- sufficient and we help employers to find the right staff by understanding their needs and providing them with workers from diverse backgrounds. It will provide businesses with a high- calibre of employee available for project or permanent work.

Blue Sapphire is a newly established company. It is an organized as a partnership among four partners namely Mangesha Shakya, Bijaya Acharya, Nabin Thapaliya and Harmeet Singh. We will be located at Sydney, CBD. The hours of operation will be Monday- Friday 9 a.m. – 5 p.m., Saturday – Sunday 10 a.m. – 4 p.m. The opening hours will vary during the public holidays.

Company Ownership

The company will start as a joint proprietorship of the founders involved in the business, As a new corporate entity, BSA will be treated as a start-up in this business plan. Blue Sapphire Recruitment agency will be established as partnership trading business.

Start-up Summary

The goal of the company is to start-up as inexpensively as possible to avoid the use of debt. The company is estimated to start working from the early week of July which is three months away.  The opening day’s cash on hand balance will be $000.

The purpose of this plan is to secure a 60% of the capital as a bank loan and a 40% of the financing will be covered as owner’s investment where each of the shareholders will invest 10% of the total funding.

Business Concept

Blue Sapphire recruitment agency provides a complex blend of services to distinct population. The company serves businesses through connecting them with the professional contingent workforce. It also serves the worker by connecting them with businesses and providing benefits which are not often provides by other employment agencies.

Key stakeholders

Name		Role	Contact Information
		CEO
		Operation and IT Head
		Marketing Head
d.		Finance Head

1.2 Products and Services

The Sapphire Recruiters is uniquely positioned to help people (of all education background and skills) to find the jobs/ careers. This company is going to allocate those people to a number of different sized organizations on the basis of their education, capabilities, abilities and skills to perform a particular job. The company serves their clients through connecting them with the professional contingent workforce. Also, provide job creation and job design services to help employers think about the ways in which jobs can be structured and performed by a person who has a disability. Overall, our agency provides the following services:

·         Conduct specialist recruitment

·         Assistance with the preparation of selection documentation

·         Handle initial enquiries and acknowledge applications

·         Short list applications and conduct first round interviews

·         Conduct verbal reference checks and skills tests

·         Present short listed applicants for further consideration

·         Organise interviews with the short listed applicants

·         Assist with negotiations and advise unsuccessful applicants of the outcome

1.3 The Market

The market in which we are going to operate is Sydney CBD with the expansion all over Australia in near future. As the Sydney Population is growing and the demand for workforce is booming at increasing rate, there is need of workforce for various companies. Jobs across the City of Sydney’s local area are increasing at twice the rate of metropolitan Sydney and in a 5-year period between the last ABS Census', 40% of all jobs growth across the metropolitan area took place within the City.

The area where we are focusing for recruitment purpose is ICT, digital marketing, mobile optimization, administrative and Office Support Staff as there are more number of jobs increasing in this metropolitan city in these sectors. So our main target will be all IT staffs and office support staff who will be performing administrative duties, accounting staffs, office clerks, office technicians and digital marketing staffs and other executives.

At the beginning of the business we are not expecting much of the return. After few months the sales will be expected to rise by 10% and this will rise further in coming days. Regarding the generation of sales, if the candidate is successfully placed in the company, we will be receiving 10% of the candidate's first year salary (payable by the business to candidate).

1.4 Business Potential:

Recruiting business is becoming quite popular and it is bringing in new opportunities and challenges with it. It is estimated that potential employees searching for jobs will make 14 % of the total labour force and would be competing in the market for the available jobs by end of 2016 in Sydney Reign. This figure is estimated to shoot up in coming years as well. These trends provide us a base for establishing a recruiting agency which has high potential of growth.  The highest part of these numbers is the people who have moved from other countries and have recently settled in Australia. These people have got essential skills but no market links so we will give special emphasizes on such people.

· Our management staffs come from all different educational and cultural backgrounds which give us the biggest competitive advantage over other companies.

· Special empathizes would be given to quality of both candidates and hiring companies which over the time will develop good ratings and hence good company position.

· Our services would be accessible for people in variety of triads directly increasing the potential of our business.

1.5 Mission, Goals and Objectives:

The mission of Blue Sapphire Recruitment Agency is to contribute to the community by filling the need for specialized, professional, contingent workers. The company will provide workers with a safe and independent environment. Blue Sapphire listens to individual needs and customizes personnel solutions for both businesses and workers.

Through a well-connected network of colleagues in the emerging company, we believe our services will exceed the expectations of our customers. The firm has very specialized knowledge of the emerging company market with over five years of work experience. The main objective of the company is to provide job placement services in a professional and cost efficient manner to small, medium and large businesses throughout the target market while concurrently finding job/careers that properly suit applicants.

Blue Sapphire will reach profitability by month June of the year 2017 and each shareholder should share the net profit after 30% investment of those profits. Our target in the first year is to earn at least $120,000 and increase this by at least 20% in coming years.

1.6 Strategies:

The business is going to use number of marketing strategies to easily target job seekers and companies seeking to hire new employees within the target market. The business is going to use traditional methods like print advertisements and advertisements placed on other search based engines. The business will also be using internet based strategy. The business will also be developing its own website and other information regarding the available positions. We will be visiting different companies so that we can develop relationship with key companies who could provide vacant positions for us. Also the company will attend different local trade fair so that we can generate substantial number of potential candidates for the vacant positions.

The other business strategies are as follows:

· Target prospects that have shared “Core Values” and not just “Industry or Niche Industry” expertise.

· Share “Placement, Project and People Success” stories.

· Develop solid sales processes that are consistent and carried out by the entire sales team.

· Consistent and ongoing sales and business development training.

· Best Practices and Communications when approaching prospects via Social Media.

· Customer Relationship Management (CRM) and Recruitment Technology.

Blue Sapphire Recruitment agency will be established as partnership trading business.

1.7 Finance:

The business consists of $100,000 investment with 60% as bank loan and 40% from 4 partners each sharing $10,000. With the help of marketing strategies and improved services and relationship with clients, the business should make the profit in the first year. The following figure indicates the business forecasted profit, sale and number of clients in the first year.

Forecasted profit:                   $142,741

Forecasted Sale:                    $641,340

Forecasted number of clients:  200

The 60% bank loan will be paid with the annual payment of $ 12,000 which carries interest rate of 5.65% for 5 years.

2. The Market

2.1 Industry Profile:

There are no companies with a dominant market share in this human resource recruitment service industry. The industry statistics shows that there is revenue of $ 11 billion annually, annual growth 0.2%, and employment of 93,900 people by 6,974 businesses.

Demand and revenue growth for the Employment Placement and Recruitment Services industry are greatly influenced by Australia's unemployment rate, the total size of the labour force, and business confidence. When business confidence declines, fewer client businesses seek to employ additional staff, resulting in a reduced need for the industry's recruitment services. The subsequent increase in the national unemployment rate has a negative impact on industry growth. Following the global financial crisis, the industry benefited from low unemployment, with revenue surging in 2010-11 and 2011-12. However, industry revenue declined in subsequent years as unemployment increased. ( www.IBISWorld.com.au )

Changes in national unemployment levels have caused fluctuations in industry revenue over the past five years. IBIS World expects that the top four industry operators will account for approximately 14% of total industry revenue in 2015-16, which indicates a low level of market share concentration. The eight largest companies are expected to account for about 20% of industry revenue for the year. Industry concentration has remained relatively stable over the past five years as growth in the number of firms entering the industry has been offset by organic expansion and acquisitions by major players. However, industry concentration is expected to increase slightly over the next five years as the larger companies become more dominant and increase their market shares.( www.IBISWorld.com.au )

2.2 Competitors and Target Market

The top recruitment agencies in this business include are IPA Personnel, People2people, Kelly Services, Davidson Recruitment, Finite IT Recruitment Solutions and others. As there are many other recruitment agencies, there is very tough competition going on. So, our target in next 5 years is to become one of the top ten recruitment agency in Sydney.

Generally these recruitment agencies are using the top search job websites like www.seek.com , career one, my career etc. We will also be partnering with these job search websites so that we can compete in the market. As the business research on this recruitment field, there are no such company which is the major leader. But there are many recruitment agencies that are currently holding small portion of share in the market. Our target customers are mostly the people from IT background and office support. Many agencies are focusing on various field of job market so they fail to achieve their goals. So we have focused on particular area of job market (IT and Office Support) which is the most demanding sector in the current scenario of job market.

In the beginning of start of the business we should focus on developing different marketing and personal relationship building strategies so that we can overcome the market barriers. Regarding our pricing strategies, we will be taking only 10% of the commission of the candidate’s annual salary whereas many recruitment agencies are taking more than this percentage.

3. Sales and Marketing Plan

3.1 Our customers

Our customer base will be on two ends one the companies which are willing to partner with us in hiring their staff and number two the potential candidates who are looking for jobs. We won’t charge anything to the companies hiring the staff and all our income will be generated from the candidates who actually get placed in jobs from us. The particular areas we will focus for recruitment purpose are ICT, digital marketing, mobile optimization, administrative and Office Support Staff. The reason behind focusing on these fronts is that there is high demand for jobs in these sectors and this number is even expected to rise in near future. So our target customers will be staff performing administrative duties, office clerks, accounting staffs, office technicians and digital marketing staffs and other executives.

3.2 Our services

We serve our clients by connecting them with the professional contingent workforce. We offer job creation and job design services to help employers think about the ways in which jobs can be structured and performed by a person with disability. Our services include:

· Conducting specialist recruitment

· Assisting our customers  with documentation

· Handling initial enquiries and acknowledging applications

· Shortlisting applications

· Conducting first round interviews

· Conducting verbal reference checks and skills tests

· Presenting short listed applicants for further consideration

· Organizing interviews with the short listed applicants

· Assisting with negotiations and advising unsuccessful applicants of the outcome

3.3 Value proposition

3.4 Promotion

Our company will use variety of promotional strategies with aim to maximize the range of companies seeking to hire new employees and target job seekers. The business will use combination of traditional and modern marketing techniques. The traditional promotional techniques will include:

· Print advertisements

· Newspaper ads

Our company will develop its own website to assist our customers and will be visiting different companies and job fairs so that we can develop relationship with key companies who could provide vacant positions for us. Also the company will attend different local trade fair so that we can generate substantial number of potential candidates for the vacant positions. We are also using modern promotional strategies including:

· Social Media Integration

· Mobile Apps

· Online Marketing

Timeframe and Budget for promotional initiatives

Techniques	Time Frame	Budget($)
Print Advertisement	3 months	3,000
Social Media Integration	First year	2500
Mobile Apps	Continuous	3500
Online Marketing	First year	5000

3.5 SWOT analysis

Strengths 1.    1. Increasing demand in employment industry. 2.  2. The cash flow keeps on adding with time. 3.  3. Strong team from different educational and cultural background. 4.  4. Limited assets required. 5.  5. Good link with international workers who need good guidance in recruitment	Weakness 1.  1. Weak initial cash flow. 2.  2. Difficulty of finding investors to commit money. 3.  3. Lack of brand equity. 4.  4. Need to compete with already established recruitment agencies 5.  5. Hard to estimate wage growth.
Threats 1.    1 .Instability in employment sector 2.  2. Automation is decreasing the number of jobs available every year. 3.  3. Change in regulations can impact the business. 4.  4. New recruitment agencies can add to the competition. 5.  5. Risk of economic recession.	Opportunities 1.   1. Development and growth of young skilled workers. 2.  2. Opportunity to expand nationwide. 3.  3. Continued expansion for online recruitment. 4.  4. Increasing number of new organizations requiring good staff entering the market. 5.  5. The culture of people hiring recruitment agencies to get their dream job is growing in Australia.

3.6 Sales and marketing objective

Sales forecasting:

We are accepting to make 20 sales each month. We are also targeting 10% increase in sales through each year. Since first 2 months will be just for settling into the process so we are not accepting to make any sales in this time period.

M/y	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	June	July	Aug	Total
Year1	0	0	20	20	20	20	20	20	20	20	20	20	200
Year2	5	5	21	21	21	21	21	21	21	21	21	21	220
Year3	10	10	22	22	22	22	22	22	22	22	22	22	240

Our marketing strategies are one to the most vital part in success of our company. The objectives of our marketing plans are:

· Establishing our brand in the market.

· Increasing the sales

· Targeting new customers

· Enhance customer relationship

· Enhance internal and external communication

· Improve stakeholder relations

· Building up the brand awareness

· Launching new products and services

· Increasing the profits

3.7 Sales and distribution

For distribution of our services we will be using the online channel. Using this channel we will reach large group of our potential customers. We will harness social networks, online ad campaigns and message boards to spread the world and hence achieving substantial sales volume quickly. Our website will serve as first hand interaction with our customers. We will put the available jobs and its requirements on our webpage. Those who feel they satisfy the requirement criteria can submit their application along with their resumes for that particular job. Our team will shortlist the candidates. We will offer intensive support with documentation and other requirements to the shortlisted candidates.  Following this the shortlisted candidates will be called for interviews at our office and successful candidates will be chosen among them. Contract negotiation and contract signings will be done with the successful candidates as the last step.

3.8 Pricing

Our company will be using value based pricing strategy. We will charge only to the successful candidates. On conducting detailed financial analysis and pre-accessing all the cost involved we have come to the decision that will be charging 10 % of the weekly pay of our customers across first year of their jobs. The average price of recruitment agencies in Australia is around 12% of the candidates pay plus some fixed initial pricing. But in order to compete and develop our name in the market we have slashed the pricing to 10% and also our company won’t charge any initial cost. This way our customers will not feel the burden of paying high initial fees and encourage more candidates to access services of our recruitment agency and will provide us a competitive advantage in the market.

4. Operation Plan

4.1 Production

Blue Sapphire Recruiters is completely service minded offering services to both employees and employers. The company serves businesses through connecting them with the professional contingent workforce. Because we serve two distinct groups of people, both businesses and employees will be considered equally important to BSA. When a business is contacted and expresses interest in contingent employees that the company can provide, the following procedures will be followed:

1.      Consult with client and create a follow-up plan.

2.      Complete the contact, client, and job sheet in the database.

3.      Print one of each and forward a copy of the job sheet on yellow paper to the employment specialist.

4.      File original sheets in the appropriate binders.

5.      Search for matches in the database and pull each folder that looks like it will work.

6.      Review that folder to assure a match.

7.      Call each potential candidate and discuss the job and pay to its fullest.

8.      Fax, e-mail, or otherwise contact client with information and/or resumes for review.

9.      Schedule interviews or make a decision on appropriate candidates.

4.2 Premises, Plant and Equipment

The company is located in the heart of Sydney CBD.

5.  Financial Plan

1. Capital Requirements and Funding Proposal

Blue Sapphire Recruiters will invest $40,000 (40%) from the shareholders ($10,000 from each of shareholder) and remaining $60,000 (60%) will be lent from bank. The bank will have interest rate at 5.65% for five years.

Management Investment	$40,000
Total Equity	$40,000
Bank Loan Investment	$60,000
Total Debt	$60,000
Total Finance	$100,000

With the above structure, our recruitment agency will have to pay interest of $3,390 every year with $12,000 as principal amount every year. So, in 5 years’ time, we will be paying the bank loan.

2. Financial Assumptions

The assumption we have made during the preparation of our financial statement is during the first year of business we will have 200 clients. The people whom we are targeting generally have the salary between $40,000 to $100,000 annually. So we assume the average pay will be $ 70,000 per annum. Generally the market rate of recruitment agency for hiring a person is around 20% of their income. We are beginners in the market. So we will charge only 10% of annual income for the company who is going to hire staff. With above assumptions the commission will be $7,000 per annum if we are going to hire staff for the company.

The following table shows the monthly breakdown of number of staffs we will be hiring assuming that from the third month of start of the business we will hire 20 staff each month.

Month	No. of Persons Hired	Income	Total Income
September	0	$0	$0
October	0	$0	$0
November	20	$11,660	$11,660
December	40	$23,320	$34,980
January	60	$35,020	$70,000
February	80	$46,640	$116,640
March	100	$58,300	$174,940
April	120	$69,960	$244,900
May	140	$81,620	$326,520
June	160	$93,280	$419,800 (Break-even point)
July	180	$104,940	$524,740
August	200	$116,600	$641,340
Total	200	$116,600	$641,340

3. Personnel Payroll Plan Yearly

Job Description	Year 1	Year 2	Year 3
Front staff	$45,000	$48,000	$45,000
Legal Advisor	$70,000	$73,000	$75,000
Recruiter	$70,000	$73,000	$75,000
Office Support Staff	$50,000	$53,000	$55,000
Office Staff	$50,000	$53,000	$55,000
Total	$285,000	$300,000	$310,000

4. Projected Profit and Loss

Year	1($)	2($)	3($)
Sales	641,340	705,474	811,295
Cost of goods sold (10%)	64,134	70,548	81,130
Gross Margin	90%	90%	90%
Operating Income	577,206	634,926	730,165
Expenses
Start-up Costs	20,000	-	-
Payroll	285,000	300,000	310,000
Marketing Costs	14,000	14,750	15,000
License fees	2,000	738	738
Insurance Costs	8,000	8,450	8,900
General and  Administrative	20,000	20,475	20,600
Rent and Utilities	50,000	51,225	52,175
Miscellaneous Costs	5,000	6,060	6,900
Superannuation	27,075	28,500	29,450
Total Operating Cost	431,075	430,198	443,763
EBITDA	146,131	204,728	286,402
Interest expense	3,390	2,712	2,034
Net Profit	142,741	202,016	284,368

The principal payment amount is $12,000. After deducting the principal amount from the net income of $142741, net profit will be $ 130,741. The 70% of the profit will be shared and remaining 30% will be invested in the company.

5. Cash Flow Analysis

Statement of Cash flow

Of Blue Sapphire Recruiters

	Year 1($)	Year 2($)	Year 3($)
Beginning cash on hand	-	78,443	192,453
Add: Cash receipts
Partner Capital Contribution	39,221	57,005	81,710
Cash sales	641,340	705,474	811,295
Total cash receipts	680,561	762,479	893,005
Less: cash payments
Cost of Goods Sold	64,134	70,548	81,130
Sub-Total Cost of Goods Sold	64,134	70,548
Operating Expenses
Marketing	14,000	14,750	15,000
Business Licenses and Permits	2,000	738	738
Insurance	8,000	8,450	8,900
Miscellaneous Expense	5,000	6,060	6900
Rental Payments	50,000	51,225	52,175
Start-up cost	20,000	0	0
General and Administrative	20,000	20,475	20,600
Superannuation	27,075	28,500	29,450
Salaries-Indirect	285,000	300,000	310,000
Sub-Total Operating Expenses	431,075	430,198	443,763
OTHER EXPENSE PAYMENTS
Interest Expenses	3,390	2,712	2,034
Cash disbursement to owners	91,519	133,011	190,658
Repayment of principal	12,000	12,000	12,000
Sub-Total Other Expense Payments	106,909	147,723	204,692
Total Cash Payment	602,118	648,469	729,585
Net Cash Change- Inflow(Outflow)	78,443	114,010	163,420
Cash Position (end of year)	78,443	192,453	355,873

Balance Sheet

Blue Sapphire Recruiters
Assets	2016	2017	2018
Current Assets
	Cash	78,443	192,453	355,873
	Accounts receivable		20,000	22,000
	Inventory
	Prepaid expenses
	Short-term investments
	Total current assets	78,443	212,453	377,873
Fixed (Long-Term) Assets
	Long-term investments
	Property, plant, and equipment	40,000	28,000	60,000
	(Less accumulated depreciation)	-9,054	-18,108	-27162
	Intangible assets
	Total fixed assets	30,946	9,892	32,838
Other Assets
	Deferred income tax
	Other
	Total Other Assets	-	-
Total Assets	109,389	222,345	410,711
Liabilities and Owner's Equity
Current Liabilities
	Accounts payable	30,000	50,000	80,000
	Short-term loans			50,000
	Income taxes payable
	Accrued salaries and wages
	Unearned revenue			32,000
	Current portion of long-term debt
	Total current liabilities	30,000	50,000	162,000
Long-Term Liabilities
	Long-term debt	35,000	32,000	40,000
	Deferred income tax
	Other
	Total long-term liabilities	35,000	32,000	40,000
Owner's Equity
	Owner's investment	40,000	42,822	60,605
	Retained earnings	4,389	97,523	148,106
	Other
	Total owner's equity	44,389	140,345	208,711
Total Liabilities and Owner's Equity	109,389	222,345	410,711
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets)	0.59	0.37	0.49
Current Ratio (Current Assets / Current Liabilities)	2.61	4.25	2.33
Working Capital (Current Assets - Current Liabilities)	48,443	162,453	215,873
Assets-to-Equity Ratio(Total Assets / Owner's Equity)	2.46	1.58	1.97
Debt-to-Equity Ratio(Total Liabilities / Owner's Equity)	1.46	0.58	0.97

6. Risks

Risks	Likelihood	Impact	Responsibility	Mitigation Techniques
1. Challenge posed by already established recruitment agencies 2. Instability in market 3. Quality of jobs 4. Quality of employees 5. Changing regulations 6. New recruitment agencies entering the market 7. Weak initial cash flow 8. Economic recession 9. Difficulty of finding investors 10. Communication gap between multicultural owners and workforce	High High Medium Medium Medium Medium High Low Low Low	High Medium High High Medium Low Medium High Medium Low	Marketing Manager Planning Department Quality Department Quality Department Legal Advisor Owners Finance Team Planning Department Finance Team HR manager	Offering our services at reduced price and will serious marketing to help us make good entry to the market. Detailed market research from internal and external sources. Quality checks on the partner organization. Proper recruitment process and pre job trainings to the customers whom we are forwarding for recruitment. Hiring legal advisors. Offering loyalty bonuses and discounts. Proper budgeting and backup plan for more investment if required. Detailed market research Applying for bank loans and finding stakeholders interested in committing money to our business. Proper communication channel and regular meetings.

7. Structure and Management

7.1 Organizational Structure

Blue Sapphire Recruitment Agency will start as a joint proprietorship of the founders involved in the business. It will be owned by four different partners all of them having  an equal share in it. As a new corporate entity, BSA will be treated as a start-up in this business plan.

The founder of the company is Mr Nabin Thapaliya who will also hold the prestige designation of Managing Director of our company. The management team will include another three personals which are:

· Mangesha Shakya: Operational Manager

· Harmeet Singh: Marketing Manager

· Bijaya Acharya: Financial Manager

We are planning to hire another 4 employees once we start our company. These four employees will be for the following role:

· Legal Advisor

· Recruiter

· Front Staff

· Office Support Staff

As our business grows and according to external and internal needs of the organization we are planning to expand our business and number of employees. If business grows to our expectations, we will double the number of employees in second year. The core organizational structure will remain same but we will keep on expanding the staff in coming years.

7.2 Key Personals

Bijaya

Designation: Finance Manager

Qualification: Job Profile:

Nabin Thapaliya

Designation: Managing Director

Qualification: Master in Professional Accounting

Background: Our managing director comes from business and administration background with accounting degree as well. He has worked as team leader and salesperson. His experience in the field of administration and office support makes him good personnel as a managing director of a company.

Job Profile:

Mangesha Shakya

Designation: Operational Director

Qualification: Job Profile:

Harmeet Singh

Designation: Marketing Manager Qualification: Masters in IT

Background: Our marketing manager comes from IT and marketing background. He has worked with different IT and marketing companies and is currently working as marketing manager at Study Internationals. His experience and skills in marketing field makes him a good choice to lead our marketing team.

Job Profile: Harmeet Singh will be responsible for handling all the marketing activities of our company. The first aim of our company after establishment is to put a lot of effort into marketing in order to compete with the other recruitment agencies. So it’s his job profile to launch physical and online marketing campaign. He will have an additional role in providing IT support as well.