Business Plan
April 20, 2011
MountainWest Bookkeeping Service
Table of Contents
Executive Summary (4)
Company Analysis (7)
Unique Qualifications (7)
Mission Statement (7)
Differentiation (8)
Business Philosophy (8)
Industry Analysis (8)
Market Size (9)
Rivalry (9)
Threats (9)
Buyer and Supplier Power (10)
Barriers or Threats of Entry (10)
Customer Analysis (10)
Customer Identification (10)
Client Demographic Characteristics (11)
Client Characteristics (11)
Client Expectations (12)
Competitive Analysis (12)
Major Players (13)
Improving MWBS Competitive Position (14)
Anticipated Change (15)
Marketing Plan (15)
Product and Services (15)
Promotions (16)
Price (17)
Place (18)
Customer Retention (19)
Partnership (19)
Operations Plan (20)
Serving Customers (20)
Regulatory Issues (20)
Credit Policy (21)
Managing Accounts Receivable (21)
Managing Accounts Payable (22)
Management Team (22)
Staffing (23)
Financial Plan (23)
Assumptions (23)
Projected Profit and Loss (24)
Project Cash Flow (26)
Exit Strategy (26)
Appendices (27)
Four Year Profit Projection (27)
Balance Sheet (28)
Twelve Month Cash Flow (29)
Depreciation Table (30)
Breakeven Analysis (31)
Credit Application (32)
Executive Summary
MountainWest Bookkeeping Service (MWBS) is a small start up home based bookkeeping business. It is a one-person bookkeeping and payroll service operated by an individual who has 12 years of accounting experience. The business offers full-charge bookkeeping and/or payroll services specializing in small construction and home based businesses. To increase revenue MWBS also offers training in office procedures and accounting software along with software installation. Growth during the first year is modestly projected to be $29,000 and at the end of the fourth year sales are projected to be $40,000.
Company’s Unique Qualifications
The sole proprietor has 12 years of accounting experience, office management and technical support. She will manage the business and provide the accounting services for MWBS clients.
Market size
According to the U.S. Bureau of Labor Statistics most construction trades tend to be small; 68 percent employed fewer than 5 workers. In Utah 8,000 contractors hold a license and there are 500 general contractor members.
Products and Services
MountainWest Bookkeeping Service (MWBS) will provide bookkeeping services to small businesses, specializing in small construction business with less than 50 employees and small home based business with less than five employees. Further, MWBS will offer full charge bookkeeping, payroll, record and office
cleanup/organization, software training and software installation.
Competition
We compete directly with other small home based business like Berry Excellent Accounting and Backyard Bookkeeper. These two competitors offer similar services. However MWBS is unique and has a competitive advantage because of its wiliness to serve the clients at their locations, offer training in record maintenance and office organizational skills. MWBS anticipates similar businesses will enter this market due to the current recession. A home business is now common place and accepted in today’s business climate. The home based business is an alternative where businesses can get their accounting needs met at an affordable price.
Risk/Opportunity
The greatest risks associated with MWBS are the ease of entry into the home based business. In spite of this, MWBS can overcome the risks because of its unique ability to organization records and offices to maximize the clients business potential. Operations
MountainWest Bookkeeping Service (MWBS) is a one ownership firm. The owner/employee main function is to provide accounting and payroll services to small construction business with less than 50 employees and small home based business with less than five employees. Any additional staffing requirements will be obtained on a subcontract basis.
Capital Requirements
MWBS are seeking $18,000 which will enable us to purchase any new equipment needed, cover the monthly expenses and owner draws for approximately six months.
Company Analysis
MountainWest Bookkeeping Service offers full-charge bookkeeping and/or payroll services specializing in small construction and home based businesses. MWBS will travel to the client’s location to perform bookkeeping services if the client prefers this method, the client can mail their documents to MWBS location or MWBS will periodically arrange to pick up the clients documents. Reports will be generated based on the client’s needs.
Unique Qualifications
T he sole proprietor who has 12 years of accounting experience, office management and technical support. She will manage the business and provide the accounting services for MWBS clients.
Mission Statement
The Mission and Vision of MountainWest Bookkeeping Service are to provide the ultimate bookkeeping service to small business owners across the Salt Lake Valley. MWBS endeavors to lighten the bookkeeping chore for its clients and help them focus on operating their day-to-day business operations.
Differentiation
MWBS will differentiate itself from its competitors by:
?Provide bookkeeping services on-site at its clients location
?Offer training in record keeping skills, which is an often overlooked bookkeeping task.
?Provide office organization skills training
Business Philosophy
MountainWest Bookkeeping Service’s main philosophy is to have a healthy, successful small home based business that is a leader in bookkeeping service that services small and home based businesses in the Salt Lake Valley.
Industry Analysis
Nearly every business requires a bookkeeper of some sort; either as a hired employee or a service that is outsourced to handle the job for them. Currently, more small businesses are willing to outsource their bookkeeping needs as a means to control their expenses and employee costs. Due to the current recession that seems at times to be endless a home business is now common place and accepted in today’s business climate. The home based business is growing and offers an alternative where businesses can get their accounting needs met at an affordable price.
Market size
According to the U.S. Bureau of Labor Statistics most construction trades tend to be small; 68 percent employed fewer than 5 workers. In Utah 8,000 contractors hold a license and there are 500 general contractor members.
Rivalry
Bookkeeping services in the Salt Lake Valley varies from large national chains to small home based businesses and a few services are offered on-line only. The larger national chains tend to have CPAs on staff and target larger organizations that may have bookkeeping staff on site but need the financial or tax service the larger accounting firms offer. Smaller bookkeeping firms tend to target small businesses with a few specializing in payroll services only. A few online firms accept document from their clients by mail only. There are no firms offering their service on-site at their client’s locations.
Threats
Bookkeepers and accountants are similar in nature. The accountant sets up the bookkeeping system, monitor it, and interpret the results. Where the bookkeeper is the person that performs one or more of the steps in accounting: accounts receivable, accounts payable or payroll. In smaller companies the bookkeeper may performs all the accounting steps, while in the larger organization the steps are broke n down. A full-charge bookkeeper can perform all the accounting steps including compiling the data into the general ledger and preparing financial statements.
The threat for a small home based business is the CPA status that an accountant may have over the bookkeeper. The larger accounting business have CPAs on staff so their clients can not only get their bookkeeping done but get tax advice and filings done at one location. But they also tend to charge more for their service.
Buyer and Supplier Power
There is no real buyer or supplier power because each service has a number of clients.
Barriers or Threats of Entry
No real barriers of entry. Anyone with an accounting background can enter the market and succeed.
Customer Analysis
Customer Identification
In the Salt Lake Valley there are approximately 30K small businesses. Further, according to the U.S. Bureau of Labor Statistics most construction trades tend to be small; 68 percent employed fewer than 5 workers. In Utah 8,000 contractors hold a license and there are 500 general contractor members. MWBS will target and specialize in serving small construction and small home based businesses with less than 50 employees based in Salt Lake County.
The following is an outline of the customer analysis that MWBS plans to service. It highlights the customer’s expectations and customer’s characteristics.
Client Demographic Characteristics
Small Construction Businesses Small Home Based Businesses
Client Characteristics
Where do these small businesses get their information to buy a service?
?Annual Home Builders events held at a Salt Lake City location.
?Salt Lake Home Builders Association
?https://www.doczj.com/doc/e21203979.html,, which is an online newspaper classified ads.
Client Expectations
What do most small businesses except to receive from their bookkeeping specialist?
?Ability to setup accounting software
? A competitive price and price matching
?Review and recommend business accounting needs that they may not be receiving that will help their business grow.
?Assist their business in lowering the cost of doing business.
?Reliable, consistent and professional service.
?Open communications
? A location close to their office
Competitive Analysis
Nearly every business requires a bookkeeper of some sort; either as a hired employee or a service that is outsourced to handle the job for them. Currently, more small businesses are willing to outsource their bookkeeping needs as a means to control their expenses and employee costs. Due to the current recession that seems at times to be endless a home business is now common place and accepted in today’s
business climate. The home based business is growing and offers an alternative where businesses can get their accounting needs met at an affordable price.
Below is a competitive analysis of MWBS major competitors, their strength and weakness. How MWBS compare to them and how MWBS can improve its competitive advantage.
Major Players
The major competitors for MWBS are Berry Excellent Accounting LLC and Backyard Bookkeeper. A brief summary of their strengths and weaknesses follow: Berry Excellent Strengths and Weakness
Strengths Weakness
?Six years of experience
?Willing to setup and support QuickBooks software
?QuickBooks consulting
?QuickBooks ProAdvisor ?QuickBooks support – support can be time consuming and if you are wrong in a support issue the entire
accounting system can be
compromised and your creditability
can be jeopardized.
?Specializing in too many customers can expose the business to
competitors with a specialized niche.
Backyard Bookkeeper Strengths and Weakness Strengths Weakness
?Two years of experience
?Disaster cleanup
?QuickBooks tune-up
?Two locations serving the Salt Lake Valley
?More customer selections ?Disaster Cleanup – can be time consuming and if you are wrong in
the cleanup the entire accounting
system can be compromised and
your creditability can be jeopardized. ?Specializing in too many customers can expose the business to
competitors with a specialized niche.
MWBS Strengths and Weakness
Strengths Weakness
?Creating a niche with other small home based businesses and small
construction businesses.
?Traveling to the client’s location to offer bookkeeping services will build trust and create a business
relationship.
?Offering client’s record keeping training and maintenance will keep
the client’s files organized, easy to
access and review. ?No CPA certificate or one on staff. ?New business with no track record.
Improving MWBS Competitive Position
Even though MWBS has no CPA certificate or staff member, this weakness can be solved by linking with another small CPA home based business. The CPA can offer
my client’s tax advice, and tax filing. In turn, MWBS can send business to the CPA from businesses that are looking for tax advice and filings only.
Anticipated Change
According to the Utah Department of Workforce Services, the unemployment rate for Salt Lake City is 6.8%. The high unemployment rate ma y be the principal reason more accounting professionals join the home based accounting businesses, which will broaden competition in the bookkeeping business. On the other hand more unemployed individuals may choose to start small construction and small ho me business, which will offer MWBS a larger new customer pool.
Marketing Plan
Products and/or Service
MountainWest Bookkeeping Service (MWBS) will provide bookkeeping services to small businesses, specializing in small construction business with less than 50 employees and small home based business with less than five employees.
The services MWBS will offer are as follows:
Bookkeeping
Bookkeeping: Organize and enter business data and financial information into the businesses accounting system or my accounting system.
?Bank Reconciliation: Verify business deposits, checks written and credit card transaction are correct before reconciling checking accounts and credit card
accounts.
?Accounts Payable Management: Vender billing and posting payments to a business’s accounting system.
?Accounts Receivable Management: Bill customer invoices and collections of past due accounts if necessary.
Basic Payroll
?Provide payroll services to small business, which include:
?Payroll processing
?Payroll reports will be provided after each pay period
Record and office cleanup/organization
?Assist clients that have troubles with a disorganized office and accounting system.
?Organize and setup paper records.
?Clean-up existing software accounting records.
?Organize office for easy records retrieval and archiving.
Record maintenance
?Offer training in regards to record keeping and maintenance for accounts payable/receivable and payroll.
Promotions
MWBS will establish new clients by:
?Joining the local Home Builders associations and posting on their site.
?Post the business in https://www.doczj.com/doc/e21203979.html,: specializing in small construction business and small home businesses.
?Offer a discount of %10 on the next month’s service to current client’s for referring a new small business.
?Contact small businesses close to my location in person with brochures explaining what MWBS does and how I can help their business be better. Find
out if their needs are being met for bookkeeping services, and what it cost them.
?Match the cost for the service they currently receive and offer one other service they are not getting for one month.
?Enlisting my family and friends to tell their friends and colleagues about my bookkeeping service
?Send out an email notice to everyone in my address book, announcing my business and what MWBS does
?Attend small business fairs
?Mail promo postcards to potential customers
Price
Pricing for MWBS is as follows:
General Bookkeeping Fee: $40 per hour
?Accounts Payable
?Accounts Receivable
?Reconciling accounts (checking, credit cards, etc)
?Organize clients records
?Misc. records posting, etc.
Payroll Processing Fee: $40 per hour 1-50 employees per pay period, on-site fee $40 per hour.
?Includes federal/state tax report
?One misc. payroll report, determined by the client.
?Additional Payroll Reports: $10 per report, approximately 12 pages.
Training Fee: $55 per hour
?Record keeping and maintenance
?Software
?Accounts Payable
?Accounts Receivable
Accounting Records Clean-Up: $55 per hour
?Organize and setup paper records
?Clean-up existing software accounting records
Transportation Fee: $10 or market value to pickup or drop off records.
One time software setup fee: QuickBooks and Peachtree $60.00 per hour.
Place
MWBS will be a small home based business, located in the Salt Lake Valley. MWBS will travel to client’s lo cations to provide the bookkeeping/payroll service if that is what the client prefers.
Customer Retention
MWBS will retain clients by:
?Offer a 10% monthly service discount to existing clients that refer new customers that use a bookkeeping service offered by MWBS.
?Communicate with clients often and created a trusting relationship based on mutual respect and honesty.
?Offer training in organization skills to long time clients at a discount.
?Offer training in record keeping and maintenance to long time clients at a discount.
?Creating value by help the client’s to grow their business through learning new ways to reduce business cost.
?Create a monthly newsletter with accounting tips and accounting news. Partnerships
MWBS will improve the success of the business and assist its clients by partnering with a CPA, preferably another small home based business. The CPA partnership will assist MWBS clients with their annual tax needs and tax advice. The trusted CPA partner would refer clients to MWBS and MWBS would refer clients that need tax to the CPA. MWBS and the CPA would have an agreement not to lure clients from each other.
Operations Plan
MountainWest Bookkeeping Service (MWBS) is a one ownership firm. The owner/employee main function is to provide accounting and payroll services to small construction business with less than 50 employees and small home based business with less than five employees. Any additional staffing requirements will be obtained on a subcontract basis.
Serving the Customers
MountainWest Bookk eeping Service’s main philosophy is to have a healthy, successful small home based business that is a leader in bookkeeping service that services small and home based businesses in the Salt Lake Valley. To accomplish this MWBS will provide the finest service possible. The following is the planned service list: □MWBS provide in person and telephone contacts to establish a trusting and working relationship.
□Complete each job accurately and in a timely manner.
□Establish monthly Newsletter educating clients about quarter deadlines, business and office organization tips.
□Offer training courses for clients that struggle with software issues, and office record organization.
Regulatory Issues
The only license that is required to operate a small home business in the City of West Jordan, Utah is a business license.