Business Plan template to ‘Grow a business’

Writing a Business Plan

A business plan is a formal statement of a set
of business goals, the reasons why they are
believed attainable, and the plan for reaching
those goals. It may also contain background
information about the organization or team
attempting to reach those goals (source
Wikipedia).

Business plan is essential tool for any
entrepreneur looking to start a business. The
document should be aimed at helping you
plan your journey from start to ﬁnish. My top
tip when developing a business plan is to
keep it simple to give anyone a quick
overview of your business ambitions. You are
encouraged to use this document as a guide,
I would strongly discourage you to copy it
blindly. Remember the business plan is
primarily for you.

This business plan was built over three
months in 2007, to plan our growth. Kwiqq
evolved and we have a very different
business model now. I’m sharing this with the Out now on Amazon
community, if you find this useful please Aug 2010
share it with others. The document serves as
a mock and is not Kwiqq’s business plan. “Essential Social Media
knowledge to grow your
business...”

Raj Anand

Twitter | Blog | LinkedIn
RajAnand.biz

Business Plan made by Raj Anand, Social Media Innovation

Business Plan – <Company Name>

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Mock Business Plan Produced by Raj Anand


Index
Executive Summary .......................................................................................................................4
Background and Strategic Vision ................................................................................................5
Strategy for Growth .......................................................................................................................8
Technology ...................................................................................................................................9
Trademark and IP ........................................................................................................................9
Our Software ..............................................................................................................................10
Benchmark .................................................................................................................................10
Market ...........................................................................................................................................12
Growth of Social Networks .........................................................................................................12
Social Networking Phenomenon ................................................................................................12
For Corporate Clients .................................................................................................................13
3rd party Social Networks ......................................................................................................14
Market Share .............................................................................................................................14
Sales Strategy ............................................................................................................................16
Marketing ...................................................................................................................................17
Global expansion .......................................................................................................................17
Exit Strategy ...............................................................................................................................18
Organisation Structure ...............................................................................................................18
Current Structure ....................................................................................................................18
Structure in 6 months .............................................................................................................19
Structure in 1 year ..................................................................................................................19
Structure in 2 years ................................................................................................................19
<Company Name>’s Journey......................................................................................................20
Management Team ....................................................................................................................20
Finance .........................................................................................................................................21
Evaluation: .................................................................................................................................21
Advertising .............................................................................................................................22
User Generated Content / Users ............................................................................................22
Setup/Monthly cost .................................................................................................................22
Appendix 1 ...................................................................................................................................23

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Executive Summary

<Company Name> is a company supplying social networking software to entrepreneurs and
bluechip clients. The company was established on 15th January 200X in XXX. <Company Name>
was formed out of the work XXX did whilst studying computer science and artificial intelligence
(MRes) at XXX. After developing the first version of the software with the help of XXX(Creative)
and XXX (Business Strategy and Legal), XXX met XXX. XXX co-founded a successful corporate
entertainment venture establish over 9 years called the XXX with over XXX employees globally.

XXX, XXX and XXX formed <Company Name> and undertook the roles as CEO, Technical and
Creative Director respectively. A loan of £XXX was taken to fund the company by them.
<Company Name> over the last year has been covered in various business and technology
publications like: XXX, XXX, XXX and various local business magazines with focus on the
founders and product. The company over the last one year has XXX clients in UK and US paying
at an average £XXX (setup) + £XXX (monthly). The company is working with top brands like XXX,
XXX and XXX.

<Company Name>’s vision is to be the leading social networking software provider for corporate
clients based on their product and experience in developing successful communities. <Company
Name> will expand into 15 major cities in the next 5 years. The vision is to establish local offices
in these cities and maintaining its headquarters in XXX, UK. <Company Name> will supply
software in these cities through local offices where the sales and account managers will be
placed.

<Company Name> is now looking to raise £ XXX million in 3 stages over the next 2 years: £ XXX
million (first year), £ XXX million (next 6 months) and £ XXX million (following 6 months). The first
round is required for further product development, expansion into US and UK and increase
operation (sales and technical staff). The rest is required to continue our expansion overseas and
for operation cost.

In XXX 2007, XXX a business angel and XXX’s Chairman invested £XXX for XXX% of the
business and is now non executive director of XXX. XXX a lead Strategy Consultant at XXX and
XXX, XXX became non executive director and investor in the business.

<Company Name> now has four full time and four part time contract developers based in XXX.
The company has gone through a major software upgrade in XXX 2007. <Company Name> has
now adopted framework used by XXX, which aligns it with big players in the social networking/
online software arena. <Company Name> from its experience has identified three industries they
would like target: travel operators, recruitment companies and incubator centres.

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• Mission Statement
<Company Name>’s mission is to be the primary social networking software provider for
corporate clients and high performing new enterprises. <Company Name>’s competitive
advantage is built around 4 unique resources:
1. A first mover advantage in terms of signing up and managing corporate clients’ social
networking sites in a market where scale economies and network effects matter
2. Leading edge Intellectual Property with its white labelled, modular social networking software
3. Provision of open source technology in order to establish <Company Name>’s platform as the
industry standard
4. User Generated Content on clients’ site which is jointly owned

<Company Name>’s business model is based on a fixed fee for set-up plus an ongoing
management fee to maintain and update a corporate social networking site. The model has been
well received by our present and prospect clients and will make it very difficult for competitors to
subsequently try to lure clients away.

Background and Strategic Vision
<Company Name> is nearly a year old. The company was launched in XXX in January 2007 to
supply social networking software to corporate clients. Although the software had been in
development from Dec 2005. In just one year <Company Name> has signed eight clients
including XXX, XXX, XXX, XXX, XXX, XXX, XXX, XXX and has been featured in several high
profile publications including XXX, XXX, XXX etc. It has gained accolades in the media including
XXX, founder and Director of Innovation at <Company Name>, XXX. <Company Name>’s CEO,
XXX has been invited as a speaker and panel member of several conferences in XXX, XXX etc.
<Company Name> is currently working with clients in the Travel, Entertainment and Government.
Appendix 1 provides some of the press coverage and advertising from some of the events.

“<Company Name> have worked closely with us to develop our business networking project,
XXX. We have been delighted with the results achieved thus far and have found the knowledge,
service and support offered from the <Company Name> team invaluable in resolving any issues
promptly.”

- XXX, XXX

For many corporations, social networking is more than a phenomenon but a necessity; it enables
them to: generate revenue, market their product/service, create a point of difference with their
competition, collect customer feedback and increase interaction amongst their offline community.
Most clients recognise that a social network is becoming a service that is expected of them,
especially in the travel industry.

<Company Name>’s service offering is best explained with reference to a client example:

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Example: <Company Name> developed a social network for XXX Holidays (XXX’s 18-30 age
group brand): XXX.co.uk.

The site helps XXX brand in the following ways:

• Site allows XXX a platform to market their existing products and holidays (Graphs available
below)

• It allows XXX to collect a database of their users and others interested in their brand
• Increases their profit share by encouraging users to book online and bypass agency
commission.
• Encourages new users to book with XXX by showing real case studies of satisfied customers
on the social networking website.

• Provided travellers the opportunity to meet with others and it’s also an excellent method to
communicate and give feedback
• Make contacts and search venues and other XXX products before they left for the holiday

<Company Name>’s vision is to be the No.1 choice for Social Networking Software for corporate
clients globally. Social Networking is defined as websites where users can build their own profile,
search and tag multimedia. Prominent examples include: Facebook or Myspace. Our software

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framework is visually highly adaptable and the website’s business logic and presentation can be
completely customisted on a per client basis. We will charge our clients for developing the logic
and presentation layers, as well as maintaining and hosting the site. Extended consultancy can
also be sold to brainstorm methods of revenue generation and marketing..

We also plan to release the core <Company Name> framework as open source software. The
business logic and presentation layer will be proprietary IP. The release will be in English and
developers can build their own visual, logic and language layers as well as contribute to the core
framework. The software can be used for open/closed, social/business use in multiple languages.
<Company Name> will control the content of release versions of it’s software framework. The
software is built on XXX, an open source framework available and used in large-scale
installations including XXX with 20 million users, and is available in 12 languages.

The open source approach is aimed to make <Company Name> the market leader for the
corporate sector of the social networking web industry. It will allow web design companies to build
simple social networking sites for SMEs (small to medium sized enterprises) sector which require
basic social networking features like profiles, search users etc. These are often less demanding
than corporate clients who require advance backend system to work with their existing
infrastructure. However, by doing so <Company Name>’s technology will have greater
networking power for the corporates – who will need more sophisticated features and hence
<Company Name> technology. <Company Name>’s advantage scales with the number of
installations as with more clients more technical solutions will be developed. Ultimately the aim is
to establish <Company Name>’s technology as the industry standard. This will ensure that
<Company Name> has an unassailable long term competitive advantage in the corporate sector
of the market and a base upon which much wider product proliferation can be generated.

<Company Name>’s business model is based on building the proprietary visual and logical layers
on top of the <Company Name> framework in partnership with our clients. This is a similar
strategy to MySQL, the market leader by number of installations in the database software market.
MySQL used an open source software and community around it, to promote its software. One
point of difference between <Company Name> and MySQL is that <Company Name> will provide
software and service whilst MySQL only provides support for its software. As our target market is
blue chip clients we expect our status as creators and lead developers combined with our
comparatively low cost (discussed below) and real world experience in building successful
corporate social networks will ensure we are the optimum choice. <Company Name> is
significantly more cost effective than the alternative of hiring Web 2.0 consultants or using an in-
house team to develop social networks for their website. Open sourcing will help us market our
products to corporate companies, establish ourselves as leaders in social networking and get
developers in corporate companies onboard. The contributions of the open source community to
our software will leverage <Company Name> resources and increase its evaluation. We also
expect that open sourcing our software will create a pool of experienced developers with the
potential to join our product development team.

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We intend to reach blue chip clients primarily in the travel and tourism, entertainment (gigs,
festivals etc) and large communities (government agencies and B2C business customers e.g.
recruitment, publications etc). <Company Name>’s vision is to expand globally by forming
partnerships with companies and assign sales and account managers to each country. As such
<Company Name> looks to expand into 14 countries in the next two years.

Based on our current success and open sourcing our software we plan to have XXX clients at the
end of XXX paying £ XXX (setup) and £ XXX (monthly). Our revenue and after tax profits will be
XXX and XXX by the end of 2009. At present <Company Name> is charging £ XXX for a setup
fee and £ XXX per month for maintenance which we will increase in 2008 based on the fact that
we will grow the number of services we provide to our clients like moderation of content,
marketing consultancy etc (further discussion in Strategy for Growth).

Strategy for Growth
Our growth strategy is to expand globally through partnerships using our current business model
which has helped us expand rapidly already in 3 continents from our UK office. Historically the
most effective strategy for <Company Name> has PR by constantly being in news (often for new
social network launch and speaking at high profile events), continuously develop our product and
good communication with prospect and current clients. We form partnerships with our clients and
work with them closely. As experts in the social networking software field we believe we are in a
great position to launch our global campaign.

Within five years we will have offices and staff (similar to XXX, UK office) in major cities
worldwide. Apart from social networks we will provide additional value added services:

• Moderation of content: Some corporate clients are required by law to moderate/approve the
content on their sites before publishing it. This has been requested of us and in the past we
have suggested outsourcing it to third party specialists. We know it’s a lucrative market with
only few dominant players and we know there is definite market in supplying this service.
• Marketing consultancy: For a successful online community a marketing/PR strategy is
required. Being in this space <Company Name> understands the commonly used strategies
and will advise clients on how best to grow their communities.
• Advertising: With several communities under <Company Name>’s banner we will be able to
provide advertisements as a standard package to our clients. This will provide our clients
another method to monetise their social network.
• High Traffic Hosting: As <Company Name>’s software is fully scalable and can cope with
millions of users we believe we can add extra value to our clients as a one stop shop for all
social networking requirements. Adding high traffic hosting will reduce the costs associated
with outsourcing hosting for high-bandwidth sites This is often a requirement for social
networking sites as they typically have a high volume of multimedia content uploaded by
users, often referred to as UGC or User Generated Content.

These will work in conjunction with the social networking software we provide to our clients. We
will also branch out into similar markets in the online social marketing space like widget
generation, online multimedia (videos, interactive games etc). To make our strategy possible we
will look to acquire carefully selected start-ups or hire key individuals in the space we are
targeting.

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Technology

All our software is developed in our XXX office so we have a centralised operation. This gives us
control of software progress. Our software is built on the XXX framework developed by XXX over
the last 9 years. XXX is a fully scalable and modular PhP framework which allows our software to
be database independent so clients could use Oracle, MySQL, MS-Sql database with minimum
work.

<Company Name>’s code is modular and sits on top of XXX’s framework which implies our code
is scalable and can be changed to match client’s requirements. To increase our reach we are
looking to open source <Company Name> module’s for blogging, picture upload, login system etc
to the community. This will help us market our software and provide our service to corporate
clients who will use us as experts in customising our software and consultancy. <Company
Name> will be in total control of the presentation and business logic for the clients’ website, which
we will build from scratch for our clients.

For £XXX (setup cost) + £XXX we will provide our clients with XXX hours of set-up time
(developers and designers) and XXX hours per month. Any extra development will be charged
£XXX per day, depending on the number of hours involved in development.

The XXX software will be released to the XXX community which already have several developers
(over 5,000 developers) on board. XXX is a web application framework for PHP projects. It is
sponsored by XXX and developed by the community over the last XXX years. Development of all
the modules will take XXX weeks. There are XXX modules we will release to the community each
one will be released separately and will be documented and would include examples and unit
test. Once all the modules are released the tools will be available as a package.

<Company Name>’s software uses XXX framework and PhP/MySQL as our base software. As
our software is database independent, any website based in Linux (Studies show 6 out 7 popular
websites are based in Linux) and has provisions to install PhP (one of the most popular open
source scripting languages), can use <Company Name>’s social network. This implies
<Company Name>’s framework is compatible with the majority of the corporate clients.

So far all the companies we are working with have used <Company Name> to host their social
network. In this scenario their principle website’s hosting environment will not affect their decision.

Trademark and IP

<Company Name>’s main Intellectual Property lies in its <Company Name> modules (discussed
above) and two additional layers of the software (business and presentation logic).

Although over the last one year <Company Name> has built its brand in the social networking
scene and hence <Company Name> and its logo will be trademarked in the UK, EU and US. This
will protect <Company Name>’s brand identity in the social networking scene. <Company Name>
will be trademarked under 6 categories, out the 45 available:

Class 9
Electronic publications; downloading of electronic publications; computer software

Class 35
Online business and professional networking services

Class 37
Maintanance, repair and installation of software

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Class 38
Telecommunications; networking via the internet; provision of portals and blogs for networking

Class 42
Application provider services (APS)

Class 45
Personal and social services rendered by others to meet the needs of individuals

Our Software

XXX our software is a key strategic decision. It will be very helpful in penetrating into foreign
markets. It will help developers and smaller companies build their own social network which
should not affect us as they are not our target market.

The XXX team would consist of one developer to constantly document and answer queries. This
team would be led by XXX who will be the facilitator and involved in marketing this aspect of the
business. We are convinced that if the <Company Name>’s open source software is a success
we will see a lot of interest from Blue Chip clients. As <Company Name> are not only experts in
building the software, but also cost effective.

In the short term, we expect users to suggest changes which will be updated by our developer,
following this, the open source community may build patches and gradually increase its role,
decreasing costs in significant parts of the software. We also expect a lot of updates to be
received by our setup and maintenance team. We will have a separate section of the site
dedicated to the open source community along with a mailing list an active forum.

Benchmark

Below is a list of competitors based predominantly in the United States. The competition can be
classified into 2 types, B2B (business to business) and B2C (business to client). <Company
Name>’s business model is B2B but examples of both kind are listed below:

XXX

XXX is a custom social networking system based in the XXX, US. Their product is a templated
software solution with majority the social networking tools required by business. They have a
cookie cutter approach to the problem and have over a hundred social networking sites in their
portfolio. The company doesn’t have any particular niche and supply their social networking
platform to different sectors.

They have a free, mid and an enterprise product. The enterprise product starts at $XXX (setup)
and $XXX per month. Hence they provide both a white labelled and an enterprise service to
clients.

We believe their implementation is good but their biggest downfall is the lack of service for
corporate clients as their focus is distributed. XXX.com is part of a web hosting company
XXX.com which gives them a track record in providing hosted solutions.

We will compete with XXX.com in the US based on the service we provide to clients and our
product. We believe our product is superior to theirs as its based on XXX (open source PhP5

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framework) and soon our time to create a community will reduce significantly. Further we will rely
on open source community to extend maintain our dominance over onsite and other networks

XXX

XXX is a Web 2.0 agency based in the Los Angeles, US, specialising in social networks. The
company strictly follows a B2B model. Their average charge is £XXX (setup fee) and up to XXX%
revenue share in the business. In the past they have developed social networking sites like:
XXX.com, XXX.com and XXX.com site.

XXX’s product implementation is not very convincing and clearly there is no underlining
framework which powers their social network. XXX has a very informative and well written
website and have done some marketing/PR to promote them in the US. Although we believe
based on our product and open sourcing our core product we will have a much stronger
marketing foundation.

XXX

The company is co-founded by Marc Andreessen (co-founder of Netscape). It launched its
service in October 2005. Ning is an online platform for creating social websites/ networks. Ning’s
model has a B2C model where users can build their own community based on Ning’s template.

By June 2007 there were 67,000 communities and in September 2007 the number of users was
up to 100,000. Ning’s business model is advertising (Google Adsense) or flat licence fees of
$19.95/month for users to run their own ads.

As Ning is in the B2C market they don’t have a market sector focus. The solution is ideal for
users looking to build their own inexpensive community. The downside is that the solution uses
templates and will not be appropriate for corporates. Hence Ning is not in competition with
<Company Name>, we have different audience. Ning aims to gain volume of traffic by creating
small communities, whilst <Company Name> is looking to build larger communities by working
directly with corporates.

KickApps

KickApps was developed as a white label social networking platform designed for web
developers. Developers build their own social network on top of the platform hosted and
maintained by KickApps. Whilst features and functionality of social networks vary, they are
primarily defined by features such as, member profiles and various types of user generated
content.

Kickapps has a B2C model and is built primarily for developers. The number of communities is up
to 3000 in June 2007. KickApps’s business model is similar to Ning’s: advertising and licence fee.

KicksApps approach is unique and is good for customers with developers on board although it
lacks easy setup packages for customers. Unlike KickApps, <Company Name> sets up all the
entire social network for its clients, it also maintains and hosts the network, making <Company
Name> an ideal choice for corporate and SMEs.

Rareface

The company was one of Europe’s few social networking solution providers based in London.

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Market

Growth of Social Networks

Online social networks have been evolving for several years in various forms e.g.: Usenet,
bulletin board services, Arpanet etc at universities and companies. In the last few years they have
caught mainstream attention and been adopted by the younger online audience and latterly for
business, academia, medical, language etc. uses.

In the mainstream the earliest social network was Classmates.com, started in 1995 to reunite
school mates in the US. A similar website was also created by Friends Reunited in the UK in 1999
which was later bought by ITV plc for £120million. Both websites had a joining fee business
model associated with them.

Xing.com (earlier known as openBC) is a German Business social networking website in all major
European languages which was launched in 2003 and with members in 190 countries and more
than 1.5million paying members in July 2006 it went public (IPO). Xing.com has a revenue of 10.1
million Euros and tol date is one of the most successful business social networks

Generic social networks (for friends) became popular with the launch of Friendster.com in March
2002. Friendster had 50 million users but due to lack of customisability and scalability issues
Myspace took the lead. MySpace is a site which was initially focused on music but branched out
to more mainstream users. Myspace’s USP was its customisability and emphasis on young music
talent. In July 2005 Rupert Murdoch’s News Corporation bought Myspace for $580million.

After the success of MySpace a few issues regarding privacy and customisability appeared. The
technical community and the elder audience weren’t convinced by the profile and of being
contacted by strangers. To solve the problem Facebook, a social networking website focused on
university and predominantly used photo sharing was created. Facebook expanded
internationally and broadened its niche. It raised $12.7 million in May 2005. Recently on Oct 24,
2007 Microsoft bought 1.6% of Facebook for $240 million evaluating it at $15bn.

Simultaneously in the UK, Bebo.com was started by the founders of BirthdayAlarm.com and
Ringo.com. Bebo is a site predominantly for the younger audience and has 40 million registered
users. It has suppressed MySpace in several countries including UK, Ireland and New Zealand.
In the UK the site is more popular than AOL ranked 6th based on the number of viewers.

Although there are some clear winners in the Social Networking market in the US and Europe,
there are some other sites dominant in the Asian and South American market like Google’s
Orkut.com with approximately 68 million registered users and Hi5. The former is popular in Brazil
and India and the later is predominantly popular in all over Asia.

There are other sites growing quicker than Facebook in the US for example Perfspot is growing at
756% in just four months quicker than Facebook at 541%.

Social Networking Phenomenon

Social networking has recently been in news with Facebook in the lead. A major part of its
success is as a result of launching an API (application programming interface). The API allows
companies and developers to build applications in Facebook and reach users. Although this

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means companies can market to Facebook users, their activity is restricted Eg: Contact
information can’t be pulled out of Facebook’s system and ultimate control lies with Facebook.

After this success for Facebook, Google has decided to release an API for its social network
Orkut.com called Maka-Maka. MySpace, LinkedIn and Hi5 are also rumoured to be launching
their platforms soon.

For Corporate Clients

Corporate clients are constantly looking to add value to their brand. Often used by companies to
market, sell or collect information around their product/service. Social networking is currently an
intuitive way to encourage their audience to interact with them. Social Networks have been used
by travel, recruitment, magazine, automobile, football, production and many other companies.

The advantage for corporate companies can be demonstrated by the social network we created
for XXX’s youth brand XXX called XXX:

The XXX community was built with the aim of increasing internet channel share as they are
significantly more profitable for XXX. Participation by users has transformed into increased
internet channel share by strongly linking XXX to XXX’s sales website.
Since it’s standing start launch in April 2007 XXX has made a significant contribution to internet
channel share and the prospects for 2008 are bright.

As the graph indicates (above) XXX bookings were significantly improved in 2007 over 2006.
Revenue comparison:

JUL – 37% vs. 32%
AUG – 40% vs. 35%
SEPT – 42% vs. 19%

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XXX rise in internet channel share were higher than XXXs over all sales:

JUL – 37% vs. 28%
AUG – 40% vs. 27%
SEPT – 42% vs. 27%

“The <Company Name> team are one of the friendliest and most professional suppliers that XXX
have worked with. In a very short space of time, they have not only generated a thorough
understanding of our target audience, but also implemented a technological solution which is
already reaping significant brand building and financial awards in the online arena. With their
innovation, vision and speed of action, it is no wonder that this initiative has had such a positive
response amongst XXX management and customers alike.”

- XXX, XXX Product Manager

3rd party Social Networks

Similar effects, in general, can’t be achieved by investing in 3rd party social networks like
Facebook, MySpace etc. As they don’t provide the database of users they are looking to market
to.

They are unable to effectively monitor their users and calculate the effectiveness of their
campaigns. The social networks don’t provide content, which is invaluable from the prospect of
advertisers, on their websites instead is adding value to 3rd party networks. Further there are no
clear ways to monetise their 3rd party application campaigns. Traditional advertising, membership
fee and affiliate marketing etc become unusable with this business model.

Market Share

• Travel:
o XXX Holidays: XXX
o XXX Holidays: XXX

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• Business B2B Networks:
o Recruitment Companies: XXX
o Incubator Centres: XXX
o Mortgage Brokers: XXX
o Franchises: XXX
• Entertainment:
o Language Schools: XXX
o Publications: XXX

Out of the above markets there are 3 markets we will target initially, these are: Travel, Business
Incubators and Recruitment companies. Below the market is explained gobally

Travel companies:

From our research based on travelgate.co.uk and ibisworld.com we found that there are 900+
operators in the UK, 1500+ operators in the US and 1000+ operators in Europe. The breakdown
in the UK is:

123 Adventure brands
10 Birdwatching
27 Canals & rivers
18 Cooking
26 Disney
30 Diving
27 Ecological Brands
19 Gap year
25 Golf
43 Holiday parks & all-inclusive resorts
17 Horse riding
22 Language holidays
33 Safaris
49 Sailing
60 Short breaks & city holidays
8 Singles
63 Ski Brands
32 Spa and health
51 Specialist and cultural
38 Spiritual
129 Sports
26 Weddings
19 Working

So far we have captured one in the singles (XXX) and another in the short breaks (Holiday
Village, XXX). We think amongst the 23 sectors we can 1 in each sector in the UK similarly 23 in
US and Europe each. This will make our travel market share to 69 clients over all in UK, Europe
and US.

Business Incubator:

2005 last mapping survey done by UKBI (UK Business Incubations) there are 270 incubators in
the UK
2002 – 900 incubators in Western Europe
2002 – 1500 incubators in the US

According to the report 90 % incubators are growing. We are currently working with one incubator
based in XXX (South East) called the XXX. XXX is now increasing their involvement with

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<Company Name> by working on 2 accounts. The regions are: South East, South West, North
West, North East, Scotland, Wales and Northern Ireland we have 7 regions. We will get 2 clients
(accounts) per region i.e. 14 clients in the UK. Western Europe has 9 countries based on the
figures above we can get 14 X 9 clients: 126 clients.

In the US we can get 1 client per state i.e. 50 clients in the US. That beings the client list to 190
business incubators world wide

Recruitment Companies:

In the UK there are 5000+ recruitment companies. To take the example of London alone there
are:

4 Accountancy
35 Banking, executive finance.
17 Catering & hospitality
19 Education and teaching
17 Engineering & construction
38 General
6 HR & personal
76 IT, internet, telecoms
23 Legal
1 Multilingual
23 Nursing
20 Media sales and marketing
34 Secretarial and administration

Amongst the 13 categories we have a client in the banking, executive finance sector. We believe
we can get approximately two clients in each sector. This implies we will capture 26 clients in UK,
similarly 26 in Europe and US. That is, <Company Name> will have 78 clients in the recruitment
sector.

Adding the above results shows that we have sufficient market to sell our product. This also
implies that we could increase our sales more than the 210 clients we are estimating at the end of
two years.

Sales Strategy

We have targeted markets in areas were we are currently successful: travel, B2B Networks and
entertainment.

With each new office we will repeat our tried and tested strategy:

1. Cold Calling Campaigns: From experience 1/10th of the sales at <Company Name> have
come from cold calling campaigns. The most effective cold calls were targeted to a market
niche. We will target our niche to travel, business (B2C) (eg recruitment agencies,
professional clubs/societies etc) and government organisations.

From experience we know 30 cold calls generate 5 meetings which usually lead to one client.
Following this procedure we can generate clients based on the number of calls we make. Our
target will be to call 30 companies per sales staff in a week.

2. Lead Generation: We are currently trying a new strategy using a lead generation company.
These companies aim is to do research in a sector and target companies which could
potentially use our product. After research they call companies and set appointments.

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The advantage of using such companies is that they give a clear idea of the requirements of
the sector and most importantly all the leads are provided at a fixed cost. Once the
appointments are set the sales and account managers follow it up by a meeting to discuss
the possibilities.

3. Networking: An important part of selling is to market the company in local niche events.
Hence as a team we have been networking at travel, recruitment and marketing events. This
allows us to meet with potential clients and provides us with valuable leads into the market.

Further it also allows us to do market research and build up group of resellers who could talk
about our product and maybe use their contacts and industrial knowledge to win projects.

4. Public Relations: To date PR has been the most successful method of generating clients.
PR has enabled us to get people interested in social networks to directly contact us thus
opening up new markets. Our strategy is to continue generating industry based PR aimed
locally within the countries we are based in.

The PR campaigns will be run at two levels. One from the head office in London/XXX which
will be aimed our global presence but industry specific. In addition we will employ local PR
agencies to develop industry specific PR to generate kudos around <Company Name>.

Marketing

So far our marketing has been primarily through unprompted interest in our product and service
without the need for a specialist PR company. We were featured in BusinessWeek Magazine,
India’s most selling newspaper – XXX, XXX, XXX.

As we prepare to launch in other countries we will engage local PR companies to ensure our
presence in as wide a range of local media as possible. From trade publications through to
television.
PR companies with specialist industrial knowledge in our target sectors will be preferred. To find
PR companies we will use referrals from partners and case studies.

Global expansion

Our strategy to expand globally is to take our current success and replicate it globally while
keeping the development of the <Company Name> product in XXX,UK in order to protect our
IPRs and give our corporate clients confidence in the reliability, security and confidentiality of our
service. To implement this strategy we will have account managers and sales staff placed in our
foreign offices. Sales staff will close the deals for us and will actively networking with possible
clients and report to the sales director in the UK office. Once the deal is closed account managers
will be the first point of contact for clients. All account managers will be in communication with the
developers and designers and would report to the operations director.

Development will be divided into two teams: Setup and Maintenance. Both consist of designers
and developers. Recruiting and maintaining the team will be facilitated by open sourcing our
software.

All our hosting will be provided by XXX but we firmly believe that in a few years it will be cost
effective to have our own infrastructure engineers and hosting service. Currently XXX have the
global infrastructure to have our servers placed almost in any developed country.

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The team growth would largely depend on the number of clients. Our growth is based on our
current proven records. To manage the team we will have various directors to manage the
business namely: CEO, Sales and Marketing, Finance, Technology, Operation, HR and
Opensource and Innovation Director. The team of Directors will be built gradually during our
expansion.

Apart from directors we will outsource our marketing, legal and accounts to a company with
knowledge of the global market.

Exit Strategy

<Company Name> has proven software to implement social networking needs for clients. With
the relationships and global accounts we are convinced that we will add value with:

• Intellectual Property
• Bluechip Clients
• User generated Content
• Client Base
• Scaleable platform for product proliferation and cross selling

This will be invaluable to companies in:

• Publication Sector. E.g.: XXX
• Advertisers. E.g.: XXX
• Service companies. E.g.: XXX

Our exit strategy for investors is either to sell our company to one of these corporate based on
our revenue and client base or undertake an IPO on one of the small cap markets. We will be an
interesting exit proposition within 2-3 years. Recently the social networking field has gained a lot
of momentum with an investment of Microsoft in Facebook evaluating it at $15bn. Recently two
closed source social networking software providers, XXX and XXX received funding of $XXX and
$XXX respectively. Both use templates and are restrictive in the customisation that can be
achieved, by clients. Both are in a B2C market as oppose to <Company Name>’s B2B market.

Open source (database) software MySQL is speculated to go for an Initial Public Offering (IPO).
Similarly Bebo.com a social networking site predominately for younger audience is speculated to
file for an IPO soon.

Organisation Structure

Current Structure

<Company Name> Team now consists of eleven members:

• CEO – XXX: Is responsible for day to day management of <Company Name>. In addition he
also project manages (account manager) and leads the sales drive of the company. XXX is
also responsible for <Company Name>’s product development
• Technical Director – XXX: Is responsible for business development and evolving a future
vision of the company. XXX is also responsible for the marketing and PR for the company.
XXX in addition is also an account manager for some clients
• Creative Director – XXX: XXX is responsible for conceptualisation and delivery of the front
end of the projects. He is also instrumental in developing the usability of the software.

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• Lead Developer – XXX: XXX is the principle coder and is responsible to deliver projects for
current clients. XXX is also working on developing the open source framework for our
expansion.
• Lead Designer – XXX James: XXX is the principle designer at <Company Name> and is
responsible for conceptualisation and delivery of the front end of the product.

• 2 contract designers (part time) – XXX and XXX: Front end developer and designer.
• 1 contract developers (part time) – XXX – Is a database and back end programmer. Law and
Accountancy – We use lawyers XXX and accountants XXX.

In addition we have a team of three non-Executive Directors.

XXX: Is responsible for the strategy and vision for the company. He is also instrumental in
advising <Company Name> on sales and marketing strategy.

XXX: Is responsible for contracts and legal issues at <Company Name>. XXX also liaises
between our lawyers and <Company Name>. Further he is responsible for company evaluation
and developing the business.

XXX: Is the principle Angel Investor in the business.

Structure in 6 months

In six months the number of clients we receive per month will grow 400% (based on our launch in
San Francisco, New York and Tel Aviv). As this will require us to bring in more staff we expect to
increase our team to ten developers and ten designers for development and maintenance of our
client’s sites. In addition we will have four account managers and four sales managers in London/
XXX, San Francisco, New York and Tel Aviv. In terms of Executive Director we will have: CEO,
CTO, Sales(and Marketing) director and Business Development.

Structure in 1 year

In 1 year the number of clients we receive per month will grow approximately 250%. <Company
Name> will then employ 18 developers and 18 designers. In addition we will have 10 account and
10 sales managers.

Our executive team will consist of CEO, CTO, sales (and marketing), business development,
finance, operation and HR director.

Structure in 2 years

In two years we will have approximately 210 clients. We will then have 36 developers and 36
designers in our technical team. In addition we will have 15 sales and 15 account managers.

Our executive team will remain the same and will continue to be based in the UK.

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<Company Name>’s Journey

<Company Name> was founded by XXX. The company raised a small round of Angel funding
evaluating it at £XXX million. In just 10 months <Company Name> has XXX Bluechip clients in
the Travel, Entertainment and Business (B2C) sectors.

The sales process has been driven by XXX and the marketing has been driven by XXX. Most of
the <Company Name>’s clients are globally recognised brands and were looking to improve their
marketing and collect a user database using <Company Name>’s software.

<Company Name> has now grown to a team of 12 members:

• 3 Full Time Directors: CEO, Technical and Creative
• 3 Non Executive Directors
• One developer, designer and sales staff (intern)
• Freelance designer, front end developer and (advertising) sales

<Company Name>’s focus on working on effective marketing strategy and drive sales through
appropriate PR and Marketing. <Company Name>’s clients are in 3 major sectors:

• Travel: XXX and XXX
• Business B2B Networks: XXX, XXX and XXX
• Entertainment: XXX, XXX

<Company Name> has taken a very strategic approach its pricing and sales effort.. This has
allowed us to understand the market and add value to our software.

At <Company Name> each project has provided us with invaluable knowledge of the sector we
are targeting. We have built special social networking tools for each sector. For instance we
prepared a Job Board for Highams PLC (Recruitment), Text Voting system for XXX etc. Our
licence with these clients allows us to reuse the code and work with competitors.

Clients:

Month and Year Company Name Cost Number of users
March 2007 XXX (part of XXX) XXX XXX
April 2007 XXX (and XXX) XXX XXX
May 2007 XXX XXX XXX
June 2007 XXX XXX XXX
July 2007 XXX XXX XXX
October 2007 XXX XXX XXX
November 2007 XXX XXX XXX
December 2007 XXX XXX XXX

Management Team

XXX (CEO): Professional profile.

20


XXX (Technical Director): Professional profile.

XXX (Non Executive Director): Professional profile.

XXX (Non Executive Director): Professional profile

XXX (Non Executive Director):
Professional profile

Finance
<Company Name> is a social network website provider with a difference to web agencies. As
discussed earlier <Company Name> has three sources of revenue:

1. Advertising
2. User Generated Content
3. Setup and Monthly Fee (Software)

Evaluation:

To roughly estimate the value for <Company Name>’s sale lets assume after 2 years with 208
social networks:

1 out of XXX social networks gains 0.5m users
3 out of XX social networks gains 200K users
Rest XXX out of XXX social networks gain 10K users

Total of XXX million users

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Estimations based on 3 sources of income:

Advertising

Advertising cost estimates = Number of Clients X Number of Ads X Revenues

• Based on estimations on http://www.webmasterworld.com/google_adsense/3030598.htm

Calculations

• We know 1 million page views/month approximately generate £2,000/month
• From XXX we see 1,000 users on the website do 231,261 page views in 5 months i.e. 46,250
page views/month
• Hence 200,000 user would do 9.25 million page views i.e. £2,000/month X 9.25 = £18,500/
month
• 500,000 users would generate £46.25,000/month
• 10,000 users would generate £900/month

Total Value = 1 X £46.25 + 3X 18.5 + 204 X 0.9 = £ 2.85m pa

User Generated Content / Users

Users’ in the Web2.0 are typically charged at $5/user on exit

With 3.14m users we will exit at 3.14mX£2.5m = £7.85m

Setup/Monthly cost

With 208 clients at the end of 2 years we will earn: £20K X 208 (setup) + £1K (monthly)
Approximately equates to £4.42m

Total Revenue = £15.12m

Media companies are evaluated at 6-10 times their EBIT, our assumption is that for <Company
Name> is evaluated at 8 times:

8 X (Advertising + Setup/Monthly) + Users = £66.01m

£66.01m will be our exit value at the end of our 2nd year

22


Appendix 1
All press so far.

23

Business Plan template to ‘Grow a business’

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