Goals of the business
- Goal 1: to grow steadily for profitability by maintaining core values and integrity of the organization and providing business training by using core, proven business, and HR principles
- Goal 2: to deliver high customer satisfaction by offering effective business training in broad and general areas of training by using empirically supported materials
- Goal 3: to acquire a significant market share by competently addressing different segments of the market and needs of diverse segments by putting specific emphasis on underserved parts of the market
- Goal 4: to become highly profitable by reducing costs and maximizing returns on investments
- Goal 5: To create an enjoyable place of work through professional engagement, socialization, diversity, inclusion and encourage employees and other stakeholders to engage in life-long professional development
- Goal 6: to be the best place to buy by developing excellent products and customer service
Key to success
Attract the best personnel
Star will attract the best personnel in business training and development. It would engage in attracting some of the renowned trainers from other established firms, who will form a part of the executive team. The strategy would ensure that the company has a competent team with the required skills and expertise for managing business operations (Mathis and Jackson, 2011). The HR department shall provide the best criteria for recruitment, selection, and retention. Star shall offer the best compensation and benefits for its entire staff.
Managerial ability and experience
The new company would hire experienced staff from other companies to be the executive team. Star believes that the strategy would bring experienced executives, diverse managerial skills, and the best talents in the industry.
Consistent fulfillment of clients’ expectations
The company shall meet its clients’ expectations by developing unique products and services for the specific training needs of a given business. It would offer these services based on clients’ requests, the preferred mode of deliveries, including the Internet, at their pace, location, and time. This high-level of flexibility in product development and service provision would enhance customer satisfaction and experiences and improve retention.
Industry History
The business training and development industry consist of firms that provide short courses, seminars for employees, executives, and professional development. These firms offer training through public courses, employees’ training programs, and through specific, customized, or modified training programs. Some firms offer training in their own facilities, customers’ locations, training institutions, home, conference halls, or through the Internet.
According to IBISWorld, there are no business training and coaching firm with a dominant market share (IBISWorld, 2013). The average growth of the industry is 0.2 percent with annual revenue of $9 billion. The industry has 37,514 businesses with 64,943 employees.
Generally, the industry outlook is good because of rapid changes in technologies and the need among employees to keep up with such changes and develop their skills. Most firms offer management development training, professional development, quality assurance, and business coaching.
Management Structure
The company has a flat management structure. There would be no managers between the sales team, the assistant, and the executive. The CEO believes that this strategy would enhance inclusion and the decision-making process in the company. Trainers shall be independent contractors hired on a case-to-case basis.
The role of employees
The CEO would be responsible for managing daily operations activities, including financial management of the business and business development.
The sales team would be responsible for meeting growth targets, sales forecast, closing business leads, maintaining existing accounts, and generating new business opportunities.
Target Markets
Senior executives in Fortune 500 and mid-sized firms
Star believes that senior executives from different industries require training and skill developments, specifically in new technologies, change management, and best practices in employee management and running an organization. Hence, this is an important market for the company.
IT firms
The company shall liaise with IT vendors in order to develop training guidelines for different products. This is a rich target market because of constant changes in the industry and the need to equip end-users with skills in using new technologies.
Public institutions
The public sector constantly recruits new employees, who may lack the required skills to conduct their jobs. Star will focus on this unique market because of the public sector’s commitment to have a qualified and well-trained workforce.
Individuals
The company will also focus on individuals who want to improve their skills in different areas. Training for this target market will be specifically based on individuals’ needs.
Selling strategies
The company shall use personal selling. The CEO and the sales team shall engage in personal selling to potential clients. This would enhance personal interaction and the development of good business relations.
Star would partner with local business organizations in order to provide training and development in seminars. In addition, it will get recommendations from local business organizations on firms that require training.
The company shall write a few informative articles about the importance of employee training for publications in local dailies, magazines, and some training Web sites. This would establish Star as a company with experts in the field.
There would be weekly eNewsletters to remind prospects that Star offers business training and development to different segments of the market at affordable rates. The strategy of eNewsletters would include case studies and benefits, the announcement of new workshops, and various ways of getting relevant information from the company.
Social media would also act as selling and promotional points for the company. This strategy would allow prospects to know the company and contribute to the company’s products by joining the conversation. The company would display successful workshops, training, and seminars.
There would be free webinars where the company shall invite qualified businesses with expertise in topics for training and development. The aims of free webinars are to show that Star has the right expertise, training materials, delivery modes, and enthusiasm to be the preferred choice in the industry. The company shall help companies to identify training needs and ask for referrals too.
These selling strategies would ensure Star achieves a 15% market share, be profitable, and create product awareness within the first year, and generate revenues of more than $400,000.
Control Plan
Customer feedback
The company shall monitor customer feedback by conducting polls and surveys in order to get insights about its products and services from customers’ points of view.
Target market sales
The company shall measure sales in terms of revenue generated and profits made. Star would compare actual sales and profitability against its targets and identify areas where changes are necessary. If the company fails to meet its sales targets, then it would conduct market research to determine why its potential customers do not respond positively to its products and services (Wheelen and Hunger, 2012).
Budgeting
The company shall use budgeting as a control plan strategy. This would allow it to control the costs of operations, salaries, travel expenses, and market research against revenues generated. The aim is to reduce spending and enhance profitability.
Market share
The company shall review the growth in market share against its set targets periodically in order to determine any slow growths. It will use milestone percentages to determine the acquisition of the market share.
Financial projections
The company has based its financial projections on key assumptions related to operating margins, employees or headcounts, income rates, tax rates, cash flows, contracted services, and others.
Salaries and associated costs
The company shall keep a few employees and maintain fair salaries, compensations, and benefits. Salaries and other expenses will depend on anticipated operation conditions, business activities for productivity, and projected wage standards.
Contracted services
The company shall hire trainers on a contract basis. Expenses will differ based on prevailing market conditions but may increase at a projected rate of 1% per annum.
Profit-sharing
There is no profit sharing in the company because of the ownership structure.
Income taxes
The company assumes a payroll tax of 13.5 percent and corporate tax of 9%. These rates would reduce the tax burden on Star because the company shall focus on alternative minimum tax conditions, which would result in low cash tax payments during projected financial periods.
Cash flow
During the projected financial periods, Star believes that the business shall generate sufficient incomes to run the business and reinvest surplus in core areas of operations and revenue generation. The company projects net profit percentage as 0.45% for year 1, 3.01% for year 2, and 9.21% for year 3. In addition, the cash balance would be $23,615.01 for year 1, $45,198.75 for year 2, and $130,680.75 for year 3.
Balance sheet
The company does not have huge liabilities. Moreover, it is able to clear all its liabilities within the projected financial periods.
Others
The company shall also incur other costs related to utilities, communications, professional charges, third parties recommendations, and stationery and general office supplies (Tjia, 2009).
Financial position
Star’s financial position would be healthy at the end of the first year. For instance, it will have a cash balance of $23,615.01, with a net cash flow of $-21,384.99, operating expenses at $580,500, and cash sales at $580,500.
References
IBISWorld. (2013). Business Coaching in the US: Market Research Report. Web.
Mathis, L. R., and Jackson, H. J. (2011). Human Resource Management (13th ed.). Mason, OH: South-Western Cengage Learning.
Tjia, J. (2009). Building Financial Models (2nd ed.). New York: McGraw-Hill.
Wheelen, T., and Hunger, D. (2012). Strategic management and business policy : toward global sustainability (13th ed.). New York: Pearson Education.