Yash Talwar, Nour El-Din Ayad, Garvit Dhingra Business Plan NLC 2018
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Creating space for business and innovation Yash Talwar, Nour El-Din Ayad, Garvit Dhingra Business Plan NLC 2018 Internationalhttp://1000logos.net/wp Community-content/uploads/2017/07/Color School -FBLA -Logo.jpgWashington State 0 | SPACES [email protected] SpacesBellevue.com Table of Contents 1.0 Executive Summary…………………………...………………………………………2 2.0 Company Profile………………………………..……………………………………..3 2.1 Legal Form of Business 2.2 Effective Date of Business 2.3 Mission Statement 2.4 Company Governance 2.5 Immediate Development Goals 2.6 Financial Status 2.7 Company Location 3.0 Industry Analysis…………………………….…………………………………….……5 3.1 Description, Trends, and Opportunities 4.0 Target Market…………………………………………………………………………..6 4.1 Market Analysis 5.0 Competition Analysis………………………………………………………………....7 5.1 Key Competitors 5.2 Potential Future Competitors 5.3 Barriers for Future Entry 6.0 Marketing Strategy…………………………………………………………………..10 6.1 Key Message 6.2 Business to Business (B2B) and “SoLoMo” Tactics 6.3 Media Platforms 6.4 Sales Procedure and Strategy 7.0 Operations……………………………………………………………………….....…14 7.1 Business Facility 7.2 Production Plan 7.3 Personnel Plan 7.4 Impact of Technology 8.0 Management and Organization………………………………………………….21 8.1 Key Employees, Board of Directors, and Human Resources 8.2 Identifying, Recruiting, and Securing Key Participants 8.3 Compensation and Incentive Plans 9.0 Company Analysis…………………………………………………………………...21 9.1 Important Assumptions 9.2 Short- and Long-Term Development 9.3 Risk Analysis 9.4 SWOT Analysis 10.0 Financial Plan…………………………………………………………………………25 10.1 Accounting System 10.2 Capital Expenditures and Loan Request 10.3 Monthly Income Statement 10.4 Annual Income Statement 10.5 Cash Flow Statement 10.6 Breakeven Analysis and Return on Investment 11.0 Appendix………………………………………………………………………………30 1 | SPACES 1.0 Executive Summary After generations of structure and restraining work environments, creative thinkers and innovators alike are now looking to expand beyond the confining walls of a cubicle, and to pursue their unique visions without boundaries. With the rise of the digital era, entrepreneurship is no longer limited by financial advantages and prior opportunities. In fact, according to the Global Entrepreneurship Monitor, nearly 27 million Americans have started or are running their own businesses, amounting to nearly 14% of the population. However, nearly nine out of ten aspiring entrepreneurs face financial obstacles due to burdensome initial capital expenditures (Forbes). Meanwhile, a new generation of Americans are rejecting the traditional office environment, searching for new alternatives that foster more possibility in the business world. For aspiring business leaders, Spaces will be their solution, creating more opportunities for business and innovation. Spaces is a unique coworking office in the heart of downtown Bellevue, offering a variety of work environments and business amenities to help foster the inventive spirit of entrepreneurship. By building a shared workplace, entrepreneurs and freelancers will find a dedicated community of business pioneers. Spaces will offer a wide range of services, from hot desks and student passes to fully fledged custom offices. With a fully functioning work environment already in place, entrepreneurs can worry less about the hassles of leasing a building, furnishing an office, or purchasing equipment and amenities, and instead focus on the priorities of their small business. The industry of coworking is growing exponentially, with the number of coworking locations almost doubling in America every year (Pasquier). The internet and cloud services have untethered the average worker from the traditional office, while rapid advancements in the technology and media sectors have created an explosion of new startups. All this has cultivated a huge demand for alternative work environments, and with a renewed emphasis on networking and connections, coworking has evolved from a concept to viable industry. The growing Bellevue metropolitan area will serve as Spaces’ central location. Over the past couple years, downtown Bellevue has become a fast-growing city, cultivating more business and economic opportunities to many of its inhabitants. Although Bellevue is home to one other major coworking institution, Spaces will undercut their prices and serve to other members of the innovative community that aren’t accounted for (i.e. students). In fact, “even if the Seattle area had 50 coworking spaces, we wouldn’t be anywhere near capacity” (Sayles). Ultimately, by residing in the 5th largest Washington city, Spaces will expand the office opportunities available to not only locals, but to the rest of the Pacific Northwest. Spaces will obtain its initial financial expenditures through the Small Business Administration (SBA). The company will acquire an SBA 7(a) Small Business Loan for about $2.2 million. The SBA will secure the loan from the local Bank of America, and in return Spaces will pay a loan guarantee fee. The company plans to pay off the loan with an interest rate of 7.25% within a 15-year maturity period. Although we have prepared for early losses, we are confident that Spaces can become financial stable. By aiding a growing movement in a top city of entrepreneurship, Spaces will establish itself as a leader in the commercial movement towards a more innovative community. 2 | SPACES 2.0 Company Profile 2.1 Legal Form of Business Benefits of an LLC Spaces will form a Limited Liability Company Management Flexibility: An LLC can opt to (LLC). An LLC shares the same advantages as a be managed by its members, which allows all sole proprietorship and general partnership: no owners to share in the business’s day-to-day double taxation and management flexibility. An decision-making, or by managers, who can be LLC will go under “Pass Through Taxation”; either members or outsiders. which means all profits and losses will be recorded under each co-owner’ tax return. An Limited Protection from liability: Owners LLC will also benefit with limited liability, will enjoy limited liability, which means they resulting in a 0% risk of the owners’ personal are personally protected from any liability of the assets. With recent amendments to the U.S. Tax LLC and successful judgments, as well as from code in Congress, subjects to Pass Through the LLC itself. Taxation will be able to deduct 23% of their Pass-Through Federal Taxation on Profits: taxable income. An LLC is a pass-through entity, meaning its profits go directly to its members without being taxed by the government on the company level. 2.2 Effective Date of Business Spaces will begin operations on January 15th, 2019. Before opening day, the Spaces team will organize and create a working environment for our beginning clients. 2.3 Mission Statement Spaces strives to create a professional and vibrant environment for small businesses and young entrepreneurs. Whether it be an emerging business searching for a startup location, or an established company looking to expand, Spaces offers an array of workspaces in the Bellevue area, and provides these organizations with the proper resources such as conference rooms, private study-quarters, and other business amenities. In short, Spaces attempts to not only be an office co-op, but also to enhance the small business community by encouraging networking among entrepreneurs and small businesses. 2.4 Company Governance Since Spaces will run as an LLC; the three chief officers will be Yash Talwar, Nour El-Din Ayad, and Garvit Dhingra. Under the legal agreement, Yash Talwar will act as the C.E.O (Chief Executive Officer), Nour El-Din Ayad as the C.F.O (Chief Financial Officer), and Garvit Dhingra as the C.O.O (Chief Operations Officer). All three co-owners will hold limited liability within the company. 3 | SPACES 2.5 Immediate Development Goals For the company to experience success as soon as we begin operations, it is critical that Spaces begins to develop its company assets directly from the company’s initiation. Within the first three months of operation, Spaces must: - Fully train employees and community managers to ensure smooth operations - Conduct efficient advertising in multiple channels, including social media and physical branding throughout the downtown area - Attain about 50 students and businesses, to ensure we meet our financial projections and build an initial customer base 2.6 Financial Status Although Spaces’ three chief officers possess substantial personal assets, under Washington state law, co-owners of an LLC are not required to provide their personal assets as a collateral to the agreement. However, to launch Spaces properly, significant additional funds are needed. For this reason, Spaces will apply for an SBA 7(a) loan from the United States Small Business Administration for about $2.2 million dollars, with an interest rate of 7.25%. 2.7 Company Location Spaces will be in the heart of Bellevue downtown, a bustling metropolitan area quickly becoming the leading business hub of the greater Seattle area. Spaces will lease the 8th and 9th floor at the Bellevue Pacific Center, a 40,809 square feet facility at 188 106th Ave NE #400, Bellevue, WA 98004. Located walking distance from Bellevue Square, Bellevue Downtown Park, the Bellevue Transit Center, and the City Center, Spaces is minutes away from entertainment, dining, transportation, and the heart of a bustling city, an attractive feature of working in the Spaces office. Population Economy Coworking th 5 largest city in 1.69% Annual Job Home to 23,889+ Washington Growth local businesses Annual population Median Income of 49.2% partake in growth rate of 5.1% $100,703.00 business & tech fields 4 | SPACES 3.0 Industry Analysis 3.1 Description, Trends, and Opportunities The turn of the 21st century brought the boom of the internet and a new era of business and innovation. As of 2014, 96% of those under fifty years-of-age in the U.S. actively use the internet, and 94.7% of businesses report having a reliable internet connection.