BA 101 10:15-12:05 MW
Meaghan Messer, Buting Liu, Bassam Essa,
Stefanie Scowden, Ashley Eichenberger & Claire Mbock,
Precision Placement – 5/2011 2
TABLE OF CONTENTS
Key Strategic Concept ……………………………………………………………………………… Page 3
Executive Summary …………………………………………………………………………………. Page 4
Critical Events & Milestones Graphic ……………………………………………………….. Page 5
Organizational Issues ………………………………………………………………………………. Page 5
Business Management Plan …………………………………………………………………….. Page 6
Market Feasibility & Viability …………………………………………………………………… Page 11
Marketing Implementation Plan ……………………………………………………………… Page 15
International Element ………………………………………………………………………………. Page 16
Financial Plan …………………………………………………………………………………………… Page 16
Financing Sources & Form ……………………………………………………………………….. Page 18
Critical Risks, Problems & Assumptions …………………………………………………….Page 19
References ………………………………………………………………………………………………. Page 20
Appendix A: Operational Cash Flows …………………………………………….Page 21
Appendix B: Capital Budget ………………………………………………………….. Page 22
Precision Placement – 5/2011 3
KEY STRATEGIC CONCEPT
The need to connect part-time workers and employers is large and growing. According to the
January 2011 Employment Situation Report, by the U.S. Bureau of Labor Statistics, almost 36%
of the American labor force are part-time employees1. As we move out of the recession more
employers than ever before are hiring part-time workers as a way to bring employees on board
to ease workloads without incurring the additional costs of healthcare and retirement. The
existing job portals on the Internet allow part-time postings but they do not address the unique
needs and concerns of this target market.
The Precision Placement job seeker would post a resume
and they would fill out a skills and availability survey.
They would also have the option of taking online skills
assessments in software, accounting, law, typing, ethics,
personality, critical thinking and other tests. These tests
are not required but can help employers to filter through
the potentially thousands of possibilities to find the
applicants who meet their precise requirements.
Two-thirds of the part-time labor market is considered
‘non-economically part-time’ meaning that they prefer to
work part-time and would elect to work part-time
regardless of full-time employment options. This group of people, which numbers over 18
million in the US alone, will form the backbone of the Precision Placement customer base. Part-
time workers have different concerns than full-time workers and need a job that will fit into
their lives so questions like working hours and access to mass transit make the critical
difference about whether or not they will take and keep a certain position. There are also non-
economically part-time workers who will transition to the full-time market like students and
parents of young children who will utilize the services of Precision Placement for the years they
are working part-time and then transition to web portals that cater to the full-time work force.
Precision Placement investors will be securing a foothold in the lucrative Internet jobs
marketplace in a niche that is virtually untapped. Precision will have multiple revenue streams
from employers, job-seekers and advertisers. Our top-notch high energy team has the vision
and enthusiasm to bring Precision Placement from inception to a global brand in under 5 years.
The opportunity is clear and the time to seize it is now.
8.931 million people are economically part-time (those who want a full-time job but can’t get one); 18.184 million people are
non-economically employed (those who choose to work part time for non-economic reasons including school, childcare,
retirement or Social Security limits on earnings, etc.).
Precision Placement – 5/2011 4
Unlike other online jobs portals, Precision Placement targets
the part-time labor marketplace. Part-time workers make up
Contact Name: Claire Mbock almost 36% of the US labor force and have specific needs that
Voice: 503.501.8999 are different than full-time workers. The management team at
Email: email@example.com Precision Placement understands the unique needs of this niche
Web: www.pdx.part.time.com market and will address those needs with a searchable
database of employers that can be filtered by the criteria that
Executive Management matter most to them. Similarly employers who are hiring part-
CEO – Claire Mbock
time workers need to have a deeper understanding of their skill
CFO – Meaghan Messer
set and availability than they do with full-time workers whom
CTO – Buting Liu
they often expect to flex the rest of their life around the
Industry: requirements of the job and are often more willing to train.
Internet portal for part-time jobs
A web portal will be developed with a regional interface that
will be launched on a city by city basis. Behind the portal there
Number of Employees: 6
will be powerful filtering software and a robust database to
handle the vast quantity of data and frequency of access to the
Bank: Wells Fargo
site. This portal will be developed under the guidance of
Law Firm: Lane Powell Precision’s CTO Buting Lui. Her background in business
administration and visionary insights into the job portal
Current Investors: marketplace make her the ideal person to bring the project in
Claire Mbock $15,000 on time with a unique and incredibly user-friendly interface.
Bassam Essa $15,000
Stefanie Scowden $15,000 The portal will first be launched in Portland, OR to utilize the
Buting Liu $15,000 vast networks of the management team in the area. Through
Meaghan Messer $15,000 offering free posting via networking and targeted marketing the
Ashley Eichenberger $15,000 site will be populated with at least 200 jobs prior to launch. The
Note: All investors are private investors launching of the portal will be accompanied by an intense
using personal funds.
media campaign and a free one month offer for subscribers and
employers. The next cities targeted for expansion are Seattle
Funds Requested: $50,000
and San Francisco. Within 5 years the service will be available in
Use of Funds: To replace need all medium and large cities in the US and internationally.
for debt funding of initial start-
There is a need for this service and Precision Placement has the
right mixture of skills, passion, insight and timing to capitalize
Revenue Projections (EBIT): on the opportunity and realize the potential. Precision
Year 1: $ 100,680 Placement will make a positive social contribution while
Year 2: $ 163,737 providing it’s investors with large returns short and long term.
Year 3: $ 614,548
Precision Placement – 5/2011 5
CRITICAL EVENTS & MILESTONES GRAPHIC:
2nd Quarter, 1st Year 4th Quarter, 1st Year 2nd Quarter, 3rd Year
*Design Website *Continue Advertising *Launch Service in San
*Launch Beta Version *1 Month Free Promo Francisco (SF)
for Testing Ends *SF Advertising
*Control Group Testing *1 Month Free with 6 *SF 1 Month Free
*Hire Remaining Staff Months Subscription Promo
*Rent and Set-up Offices Promo *Press Release
*Press Event *Press Event
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q3Y2 Q2Y3
1st Quarter, 1st Year 3rd Quarter, 1st Year 3rd Quarter, 2nd Year
*Planning *Launch Service in *Launch Service in
*Website Design Portland Seattle (SEA)
*Hire Web Team *Advertising *SEA Advertising
Employees *Heavy Promotion of *SEA 1 Month Free
*1 Month Free Promo for *Press Release
Employers & Job Seekers *Press Event
The company is named Precision Placement. The name reflects the precision with which our
job seekers and employers are matched. Just as Google built their success on providing links
that were filtered by multiple criteria to maximize the chances of the link being what the user
was searching for Precision Placement will provide job seekers and employers with potential
matches that are precisely matched to the criteria they specify.
Precision Placement filters job seekers and employers to bring together ideally suited
candidates and positions; making our customers happy and successful in the long run.
Precision Placement – 5/2011 6
Precision Placement will be established as a corporation. The company will be a privately held
corporation for the first several years while building its brand. This is also being done to avoid
the costs associated with meeting SEC reporting requirements. It will have a corporate charter
and by-laws. As an online business the design of the website and the database behind it will be
the most expensive element of the initial roll out. As a corporation Precision will be able to
offer stock as part of its compensation package to attract top talent. Compensating some of
the staff with stock will reduce the amount of start-up capital that will be required and aid in
attracting top talent.
Precision will face higher accounting/legal costs and higher taxes as a corporation than it would
as a partnership. It will also be required to establish by-laws and a charter. Rapid expansion
funded through operations are projected for the first seven years so profitability will be
minimal until we have completed deployment in all of our target markets. Thus even though
Precision’s investors will be subject to double taxation as a corporation it will not have any
significant impact until the company reaches its maturity stage. Easy access to capital is key for
Precisions success and the investors plan to go public after the revenues reach 5 million – which
is projected to occur in the fifth year of operations. The additional capital raised through the
IPO will allow Precision to complete their deployment more quickly than growing through
operations alone therefore reaching the maturity phase of the business sooner and providing
maximized returns to Precision’s investors.
BUSINESS MANAGEMENT PLAN:
Our team will initially be composed of the six initial investors and additional team members will
be brought on as additional skill sets are required and as needed based on growth. All team
members will be experienced professionals who are well trained in their specific duties. These
members will aim for exceptional customer satisfaction and reliable technical performance.
Precision Placement will have the following departments: Administration & Finance;
Sales/Marketing and Website Development & Maintenance.
The areas of responsibility for our management team are as follows:
Chief Executive Officer: In charge of the businesses operation and performance. Also in charge
of strategic planning for future growth. They will make major decisions for the corporation. The
CEO will have at minimum a bachelor’s degree in business or something closely related. They
will also have at minimum ten years of experience.
Precision Placement – 5/2011 7
The CEO position will initially be filled by Claire Mbock who has more than 15 years of executive
level experience in operations and sales and is experienced with international trade and
Internet portal based businesses. Claire is fluent in French and will provide marketing materials
and web content as needed in French. Initially the CEO will be compensated with a living
stipend. After break-even is achieved this position will be a salary position at a competitive
market rate to be determined by the board of directors. Precision Placement will have one CEO
who will report to the Board of Directors.
Chief Technology Officer: Manages technical issues the company might face. In charge of
customer support employees and website technicians. Also responsible for research and
The CTO position will initially be filled by Buting Liu. Buting will utilize her cross-cultural
perspective; project management and customer relationship management skills gained through
her business administration education and her visionary insights into labor market trends to
spearhead the development of a jobs platform that will not only meet the needs of but will
shape the part-time labor market. Buting is fluent in Mandarin and will provide marketing
materials and web content as needed in Mandarin. Initially the CTO will be compensated with a
living stipend. After break-even is achieved this position will be a salary position at a
competitive market rate to be determined by the board of directors. Precision Placement will
have one CTO who will report to the CEO.
Chief Financial Officer: Responsible for financial control of the company. Also responsible for:
locating funding sources; ensuring that the company is operated within the confines of the law
and tax reporting. In charge of all accounting functions, administration and finance. Must have
accounting or finance degree and relevant experience.
The CFO position will initially be filled by Meaghan Messer. Meaghan will draw both from her
education in accounting and business administration from Portland State University but also
from her years of experience in small business accounting and operations. Meaghan is fluent in
Spanish and will provide marketing materials and web content as needed in Spanish. Initially
the CFO will be compensated with a living stipend. After break-even is achieved this position
will be a salary position at a competitive market rate to be determined by the board of
directors. Precision Placement will have one CFO who will report to the CEO.
Director of Sales & Marketing: In charge of sales and marketing. Responsible for brand
management & marketing planning and implementation. Responsible for meeting sales goals.
Develops expansion strategy.
The Director of Sales & Marketing position will initially be filled by Stefanie Scowden. Stefanie’s
educational background in business administration and experience in sales and brand
management will allow her design and administrate the aggressive and cutting edge sales and
marketing strategy needed to gain market share rapidly and establish Precision Placement as
the industry leader in the online tools for the part-time labor marketplace. Initially the Director
Precision Placement – 5/2011 8
of Sales & Marketing will be compensated with a living stipend. After break-even is achieved
this position will be compensated with a mix of a salary base plus performance based
commissions at a competitive market rate to be determined by the CEO. Precision Placement
will have one Director of Sales & Marketing who will report to the CEO.
Customer Support Team: Addresses customer’s questions and problems they might face while
utilizing our service. Recognizes customer needs and reports opportunities for service
improvement to technical and sales teams. Aims to make job search as hassle free as possible.
Reports to CTO. Number of Customer support team members is relative to company size. In
the early stages fewer team members will be needed and as the company grows more will be
needed. Customer Support Team members will be hourly wage employees. Ashley
Eichenberger will be the Customer Support team manager and will report to the CTO. Ashley
has an extensive background in customer service and a deep commitment to quality customer
service. She will ensure that Precision’s customers have an optimized experience while using
the service and that any issues are rapidly addressed and resolved within the organization.
Each customer service team will have one manager and all managers will report to the CTO.
One customer service team will be able to provide for the needs of all customers within the US.
Additional teams will be added as needed during international expansion.
Technical Team: In charge of initial development of website and regular maintenance and
enhancements. Reports to CTO. Number of website team members is relative to company size
and website needs. At the beginning during the initial development more technicians will be
needed and then as the company gets up and running the number of developers will be
decreased. Further down the line of the company the website may need to be redone so at that
time more members for the website team would be hired. All Technical Team members must
have a degree in computer science or relative experience. Team members will be hourly wage
Marketing & Sales Team: The marketing team is responsible for driving traffic to the website
through sources like ads, search engines, online marketing, etc. The sales team works directly
with local companies to gather job openings for job seekers. Both teams report to the
Sales/Marketing Director. Number of members is relative to company size. Marketing and
Sales team members will be hourly wage employees.
Administration & Finance Team: Responsible for all bookkeeping, payroll, taxes, legal, HR and
support functions. Reports to CFO. Number of team members is relative to company size.
Administration and finance team will be hourly wage employees.
Precision Placement – 5/2011 9
CFO Finance Team
Board of Directors CEO CTO & Customer
Director of sales Sales and
and Marketing Marketing Team
Projected Number of Staff During Start-Up Phase
Period CEO CFO CTO Director of Web Design Mrkg & Admin, HR, Total
Sales/ Mktg & Maint Sales Finance
Q1Y1 1* 1* 1* 1* 2 1* 7
Q2Y1 1 1 1 1 3 1 8
Q3Y1 1 1 1 1 2 1 1 8
Q4Y1 1 1 1 1 2 1 1 8
Q3Y2 1 1 1 1 1 2 2 9
Q2Y3 1 1 1 1 1 3 3 11
*these positions are all held by owners initially, in addition one of the web team positions is held by an owner
Our CEO will widely be responsible for the creation and implication of company policy. A board
of directors will also be used to protect the best interests of the company’s shareholders. At
start up the board of directors will be made up of company investors including the CEO as well
as community volunteers. Once Precision Placement has grown and can afford to hire outside
members for the board of directors it will. These paid members will be sought out for their
experience in the field and their fresh views on company and insights into the marketplace.
Precision Placement – 5/2011 10
Key Advisers and Supportive Services:
Precision placement can widely operate on its own however it will occasionally hire consultants.
Precision placement will hire outside auditors annually to make sure all financial reporting is in
order. A CPA will be used to advise on tax issues and to prepare the year-end taxes. At start up
Precision will hire an attorney to establish the corporation and to be available to consult with
about legal issues.
Because Precision Placement helps people find jobs who may otherwise be excluded from the
labor market our business helps those individuals, their families and the communities in which
In addition to our core activity of facilitating employment in our second year we will launch a
new tab on our web portal that creates a listing of free or low cost training options in the
community. A non-profit arm of our organization will be created and called Precision Training
we will donate 1% of our corporate profits to paying for administration of this service and for
program costs such as: paying instructors, renting facilities, providing scholarships to those who
cannot afford training, community outreach, etc. We will encourage instructors to volunteer
their time and commercial property owners to volunteer their training space as often as
possible to minimize costs and maximize number of training offerings.
Production, Manufacturing or Operations:
Precision Placement has a customer service team who works hard to keep customers happy.
They receive questions and concerns through the company call centers as well as through the
website and the tech team. Unfavorable postings and/or ads can be “flagged” by site viewers
such as other websites do (e.g. Facebook and Craigslist). The website will also have survey pop-
ups and survey emails that will be sent regularly to gain feedback from users.
Precision Placement obtains revenue from job seekers, employers, as well as advertising.
Employers pay for each job post they apply. Each Job post lasts for a six week period. The
expiration of job posts ensures that the website stays up to date and contains only current job
postings. For each additional job post placed within the same month the employer gets a
discounted rate up to 15 posts. This discount is deducted when the employer goes to pay for a
new job post. Precision Placement also offers a promotion where every tenth post is free. Job
seekers pay for a subscription to the website for a certain amount of time. In this time they can
access our entire website including our skills testing. Lastly advertisers can advertise on our
website for products and services that would be of interest to our clientele.
Precision Placement – 5/2011 11
# of Posts 1 2 3 4 5 6 7 8 9
Charge Per $55 $53 $51 $49 $47 $45 $43 $41 $39
# of Posts 10 11 12 13 14 15
Charge Per FREE $37 $35 $33 $31 $29
Length of 1 month 3 months 1 year
Total charge $7.95 $20 $50
MARKET FEASIBILITY & VIABILITY:
Our target markets are students and other part time workers. This population is a critically
underserved labor market who has unique needs and concerns that are different from the
“nine to fivers”. Precision Placement pairs like-minded job-seekers and employers by very
precise parameters. We meet the needs of: highly-skilled and educated workers; parents of
young children; retired people; people looking for a second income; as well as people improving
their skills through education or attending a training program and those employers who need
them. The job-seeker who is looking for a part-time job can use our services to find the perfect
fit by using distance, skill and education analysis, wages and “green” ways of getting to work
such as bicycling or public transportation.
Precision Placement – 5/2011 12
Product Differentiation Strategy:
There are many staffing companies and websites but they do not allow the type of filtering that
is so critical for our target market. We offer our services to a wide variety of part-time job-
seekers and employers. Offering heavily customized services in regards to employment needs
or desires paired with high quality customer service will greatly set us apart and ensure the
success of Precision Placement.
Product The meaningful difference customers will see and want is our ability to offer the
Differentiation tools to find precisely the right job.
Variables Precision Placement Monster.com Craigslist.com Snagajob.com
Service Type Jobs portal catering Job portal Online ad posting Job portal catering
to part-time and listing. to hourly workers.
Functional Specialized filtering Resume and job Numerous and Hourly job listings
Features tools, excellent posting, advice, varied ad posting
Supplements to customer service, related info and categories. Many
Basic Function free trials, testing, salary calculator. types of posts are
assessments and free.
Quality 24 hour customer Established Established Established
Product Use – service available via successful successful successful
Reliability and webchat or phone company company company
Durability to address any
Precision Placement – 5/2011 13
Market Identification and Segmentation Analysis Strategy:
The common needs of our job-seekers are: a reputable firm that has a need for their expertise,
is conveniently located, has competitive wages and benefits, has working hours that fit with
their schedule, may be environmentally conscious and is in need of a part-time (max 30
hours/wk) worker. The common needs of our employers are: for someone who is in need of
part time work, lives nearby, possesses specific skills and work experience, and they may be in
need of someone who is available during non-standard hours (example: only in the afternoon
or one day a week).
Segmentation Our customers are in need of flexible work and they will want to buy (and keep
Analysis buying) our service because understand their unique needs and cater to them.
Target Markets Our Product Competitors
Characteristics Precision Monster.com Craigslist.com Snagajob.com
Demographics People (initially in National service. International National service
Location, Portland metro Focused primarily service with for people seeking
Education area) who want on full time regional sites. Ads hourly
part time work. workers. for jobs, furniture, employment.
cars.. you name it!
Economics Low or no income All Levels. All levels with a Low to middle
Income students, the larger population income levels.
middle and upper of low income
income levels individuals.
job, low income
people needing a
Psychological- Those who want Those seeking Those seeking Those seeking
Sociological more experience employment or employees or employment or
Tastes for future job. employees and a employers with a employees that
May not have full convenient way to limited budget. will work for an
time or long term find it. hourly wage –
employment. Less typically without
job experience benefits. Often
before. Highly short-term
skilled with time employment.
specific wants or
Precision Placement – 5/2011 14
Distribution Channel Strategy:
This service will be made available to customers online, through a web portal. Prospective
customers will learn about our product through marketing and co-branding. The initial primary
function of Precision Placement will be extensive marketing through various search engines and
advertisements on related websites as well as any and all non-online advertising through
tangible newspapers and magazines focusing on universities and industry specific publications.
Of course our initial marketing decisions will be based on strict budgeting focusing on the most
economical outlets for advertising. Channel conflicts may arise if we sacrifice our exclusivity
and render our company generic by relating our services through overly popular websites like
Craigslist, Facebook, Twitter, etc. Though it is yet to be determined the pros and cons of
Information will be provided on our website including basic pricing and memberships. We will
accept all electronic forms of payment: credit card, pay-pal options, and echecks. We will
extend net terms to larger firms not to exceed 30 days following satisfactory completion of
credit application and screening. We will supply excellent customer service in order to create
the perfect fit to satisfy both parties.
Distribution Our customer’s questions about how to buy and use our product will be
Channel answered by website, email and by phone.
Necessary Our Product Our Competitors
Information and Monster.com Craigslist.com Snagajob.com
How do When they need When they need When they need When they need
Customers Decide work. work. work. work.
to Buy? How is Obtained by Obtained by Obtained by Obtained by
Information website. website. website. website.
How do Purchase ads Purchase online Purchase online Purchase online
Customers Buy? online for for employers. for employers. for employers.
How is Service employers. Via Free for job Free for job Free for job
Delivered? subscription for seekers. seekers. seekers.
How do Online Online Online Online
Precision Placement – 5/2011 15
MARKETING IMPLEMENTATION PLAN:
Precision Placement offers the service of matching employers and employees based on unique
criteria. To use Precision’s site, both the employer and the job seeker must pay a fee. Job
seekers must purchase a membership. The memberships range from 1 month to 1 year.
Employers are not required to obtain a membership, but must pay on a per posting basis.
Incentives are also offered for posting multiple jobs. Each time they post a job their next post
will be two dollars off and money will be credited back. Customers with memberships also
receive benefits like being able to look more in depth to what is posted. Another benefit to
Precision’s site is that it allows members to flag anything they think might be suspicious or they
think is inappropriate. This way customer service team members can go check into the flagged
posts to see if there is any threat or inappropriate postings that compromise the
professionalism and integrity of the service. Precision’s marketing strategy will be to initially
populate the site by offering one month free for the first month after we launch. We will
advertise both on the web and in local publications read by students, parents and retired
Service and Warranty Policies:
violate the posting parameters. When an employer pays for a post, we expect it to be
legitimate, appropriate and in accordance with the restrictions in the terms agreement. When
an employer posts a job opening, it will remain on the site for 6 weeks and then be terminated.
Employers will have the option to terminate the post earlier if the position is filled or to renew
the post if they are still seeking applicants. In the case that employers need to renew their post
they will receive an email from the customer service team offering tips on using the site and
writing effective job posts and they will be offered a free consultation on writing their next
Ongoing Market Evaluation:
Precision Placement will e-mail surveys out to everyone who purchases a membership and
when someone submits either a job opening or an application. Along with sending out surveys,
links will be available on our website for users to give feedback. Since users are allowed to flag
job posts and other suspicious items, issues will be coded for tracking and follow up, providing
Precision with instant feedback and reporting. Also, external consultants will be hired
periodically to evaluate aspects of the service for optimization and best practices. With these
evaluations Precision will be able to rapidly address customer needs and concerns and
maximize their experience of the service.
Precision Placement – 5/2011 16
Within the first year the content on the website will be available in English and Spanish. The
call center’s staff will all be fluent in English and initially at least one Spanish speaker will be on
staff at all times. As Precision Placement expands into other markets it will continue to assess
the language fluency of potential job seekers and employers. Optional languages will continue
to be added on the website and the required languages in our call center will be adjusted to
meet the needs of the clientele. Eventually Precision will offer services in major cities in other
countries such as Quebec, Milan, Paris and Hong Kong. Each time service is launched in a new
city content will be provided in their native language.
Capital Budgeting Needs:
Precision Placement will start with an initial owner investment of $15,000 USD each for a total
of $90,000 USD. A small business loan will also be obtained in the amount of $50,000 USD for
total inital start-up capital of $140,000 USD. As a web based company the primary initial cost
will be the development of the website and backend database needed to run the service.
Website development has been budgeted at $50,000. This includes human resources
(programmers), initial web and data hosting charges, domain registration as well as any other
product related costs. A stipend of $1,500 USD will be paid monthly to each of the 6 owners
and will be replaced by a salary when the revenues of the company are sufficient to support
salaries at a market rate. $162,000 USD will be used for the first 6 quarters to pay the 6
investors monthly stipends. Part of the stipend money will be paid through operations however
stipends will continue until a full salary can be supported to protect the cash reserves of the
company. Stipends will cease when salaries begin. The remaining initial capital will be used for
marketing costs, business and legal documents, office supplies, insurance and a margin of
safety to deal with unforeseen circumstances.
As a service business with many potential variable costs and potential delays in reaching break-
even Precision has a large buffer of over 25%. Running out of cash is the number one reason
that small businesses fail and Precision will protect its investors by having a larger than normal
margin of safety.
Operational Cash Flows:
Entering the 3rd quarter of operations as a fully functioning job search website with a niche in
the part-time labor market Precision Placements expects to have a minimum of:
20 paid subscription clients and an additional 250 subscription clients on the one month
free promotion 20% of the clients utilizing the free promotion are expected to sign up
for a subscription.
Precision Placement – 5/2011 17
220 monthly paid job postings generating revenues of $11,500 USD. An additional 200
posts are projected under the one month free promotion. 20% of the companies using
the free posting are expected to continue using the service.
Significant revenues from advertising are not expected until traffic on the web portal
reaches 30,000 hits. Initially all advertisements on the site will be done as an exchange
of service with other companies and organizations who have complementary services.
For example, universities and professional schools.
Revenues from postings and subscribers are expected to grow dramatically for the first five
years with quarterly increases of more than 20%. Earnings from advertisements are expected to
begin in the 2nd quarter of the 3rd year of operations after service is well established in Portland
and Seattle. Revenues from advertising are projected to grow at a quarterly rate of 25% for the
next 3 years.
Lump sum payments will be made in the 4th quarter of the second year and the first two
quarters of the third year: resulting in the full repayment of the small business loan of $50,000
by the 2nd quarter of the 3rd year.
Aggregate Funding Needs:
Precision Placement will reach break-even in the first quarter of the second year of operations.
$229,760 will be required to finance operations and capital costs through the break-even point.
This funding will be provided through a mix of owner investment, bank financing and operating
Quarter Q1Y1 Q2Y1 Q3Y1 Q4Y1 Total
Operations $0 $ 5,500 $ 14,550 $ 26,150 $ 46,200
Capital 69,100 41,500 31,500 27,000 169,100
Financing 0 1,820 1,820 1,820 5,460
Subtotal: $ 69,100 $ 48,820 $ 47,870 $ 63,970 $ 229,760
Less: Revenues 0 36,000 50,400 60,480 146,880
Total Funding $ 69,100 $ 12,820 ($ 2,530) $ 3,490 $ 82,880
Start-Up $ 70,900 $ 58,080 $ 60,610 $ 57,120
Contingencies and Cash Flow Sensitivities:
Because the primary value of the service provided by Precision Placement is connecting
potential employees and employers the web portal must be populated with enough members
of both groups to make paying to have access worthwhile. To achieve this, a free one month
Precision Placement – 5/2011 18
trial will be offered at the time of the service being launched. If after one month Precision does
not have more than 250 job seekers registered and more than 300 job posts then it may be
necessary to extend the free period and continue marketing efforts to bring more traffic and
users to the site. In that case it could result in reduced revenues and increased advertising
costs. To mitigate this possibility the owners will start networking with providers of
complementary services prior to the launch and offer an exchange of advertising services to
provide a large buzz when the site launches and minimize the time it takes to populate the site.
Additionally, Precision will contact employers in the area who regularly post for part-time
positions and offer them free posts so that their posts will be available online at the launch.
Financial Controls and Management Practices:
Strict and accurate accounting practices will be in place. Meetings with the entire investment
team will be held bi-weekly the first 2 quarters to report all revenues and expenses and to
report our progress toward achieving the targets outlined in the business plan. Stringent
attention will be paid to the finances of Precision Placement to ensure success and anticipate
any issues that may arise. In the 4th quarter of the first year Precision will be close to the break-
even point and meetings will be held bi-monthly for the second and third year of operations
and additionally as needed. Audits will be performed by an independent CPA prior to and in
preparation for filing the corporate tax return.
The software being developed to manage the web portal and related database will produce
reports on customer satisfaction and the nature of the issues that are being brought up by
clients via the web and email surveys. The Customer Service Manager and the CTO will present
these reports combined with client feedback being received at the call center to the investment
team at the regular meetings mentioned above. If necessary goals will be adjusted or altered to
take into account the feedback of our clientele. Every member of the investment team will hold
all other members and all employees to the highest standards of excellence and customer
FINANCING SOURCES & FORM:
1. Capital Structure: Precision Placement will generate start-up capital funding from both
investors and from a public bank. Six investors will invest $15,000 each to establish the
company. A 10 year loan of $50,000 will be obtained from public bank with an annual interest
rate of 8%. The loan will be repaid monthly until the third year of operations when large lump
sum payments will be made quarterly in addition to the loan payment amounts. It is estimated
that the loan will be completely repaid by the beginning of the third quarter of the third year of
Precision Placement will be established as a privately held corporation with 10,000 shares.
Those shares will be evenly divided among the six initial investors. Therefore, each initial share
would have a value of $9 per share and each investor would be issued 1,666 shares. In the
Precision Placement – 5/2011 19
event of an additional investor joining the company a new share price would be voted on by a
2/3rds majority of the current stockholders and additional shares would be issued to reflect the
investment of the new investor and revise the ownership percentages.
2. Long-term Financial Strategy: Precision Placement will launch their service in Portland, OR and
will be operating in Portland, Seattle and San Francisco by the end of the third year of
operations. Growth will continue at a much faster pace in the fourth and fifth years of
operations. By the end of the fourth year Precision will have a web portal customized for each
of the major cities in the United States. In the fifth year expansion will be made into mid-size
cities in the US and large cities internationally. Revenues are projected to reach 5 million at the
end of the fifth year. At that time a vote will be made by all investors and an IPO is likely.
CRITICAL RISKS, PROBLEMS & ASSUMPTIONS:
One of the main risks Precision Placement would face is related to service reliability. Even brief
outages create an opportunity for competitors to lure away customers and radically reduce
customer satisfaction. Since all of Precision’s information is located on servers connected to
the Internet, hacking and viruses would be a big concern. Multiple solutions would be used to
mitigate this risk. We would utilize mirrored hosting, so that the site would be hosted on
multiple servers and we could redirect traffic without impacting the users experience in the
case of outage or denial of service attacks. Firewalls and other security measures would be
implemented, maintained and upgraded by web staff.
The second major risk faced by Precision Placement is competition. Time to market is critical for
success. Precision must establish itself quickly as the dominant brand in the part-time jobs
market before one of the existing jobs portals takes a stronger position in the part-time
marketplace and fills the void currently there. If that happens Precision would have to compete
directly to achieve market share. However, Precision still has the competitive advantages of:
having a regional customer interface and being able to more rapidly adjust its model to meet
the needs of this unique customer base.
The economy can also impact the success of Precision. During bad economic times part time
work is more common. As the unemployment rate drops it is likely the number of people
working part-time will also drop. However, research shows that in developed countries there is
an overall upward trend in the number of people employed part time and a particular spike
when economic activity is low.2 Based on these trends it is forecasted that growth rates may
decline as the economy improves. If this is the case Precision will launch a new area of their
service catering to consultants and freelancers. Both are rapidly growing sectors of the labor
market and customers who would maintain long term memberships to connect with potential
Based on part-time employment trends analysis. Page 32 of Global Environmental Trends 2011 report issued by
the International Labor Office
Precision Placement – 5/2011 20
Another risk to consider is the potential for lawsuits. If either a job seeker or an employer
sustain damages as a result of a connection found through Precision they could file a lawsuit.
Careful wording of the terms of service will need to be made and clear disclaimers of Precisions
ability to or claim to verify legitimacy or fitness of either party.
Precision’s management team will make every effort to recognize and mitigate risks facing the
company. However, in the unlikely event that they are unsuccessful and the company must be
liquidated every effort will be made to protect the interests of the investors. First an attempt
would be made to sell the business as a whole to a competitor or other investor. Second an
attempt would be made to sell off the assets of the company – the most significant being the
proprietary software and the customer base. Either of these options would likely net proceeds
far greater than the initial $90,000 investment made by the investors.
International Labor Office. (2011). Global Employment Trends 2011: The Challenge of a Jobs
Recovery. Geneva, Switzerland: ILO-Geneva.
Bureau of Labor Statistics. (2011). Employment Situation Summary. Washington, DC
Llargi. (2011). The Automatic Earth: Only 47% of Working Age Americans Have Full Time Jobs.
Retrieved from http://www.businessinsider.com/real-employment-rate-47-percent-
Knowledge@Wharton. (2007). Career Crisis: Monster.com Has Choices to Make as It
Approaches ‘Middle Age’. Retrieved from
Google Finance. (2011). Profile of Monster.com. Retrieved from
Facebook. (2011). Statistics. Retrieved from
OPERATING CASH FLOW ANALYSIS
First Year Second Year Third Year
Description/Period (Month, Quarter or Year)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Cash Balance at Beginning of Period $ - $ 70,900 $ 58,080 $ 50,610 $ 56,120 $ 70,826 $ 97,548 $ 88,187 $ 94,579 $ 120,692 $ 212,523 $ 330,658
Cash Flows from Operating Activities
+ Revenue earned (Sales) $ - $ 36,000 $ 50,400 $ 60,480 $ 72,576 $ 87,091 $ 140,509 $ 168,611 $ 202,334 $ 278,800 $ 334,560 $ 401,472
+ Other Income - - - - - - - 500 1,500 2,500 3,125 3,906
- Hosting, Maint & Upgrades of Web Portal - 500 500 - 400 400 400 400 400 600 600 600
- Salaries - - 9,600 19,200 19,200 19,200 100,800 100,800 100,800 120,000 120,000 120,000
- Employee Benefits - - - - - - 9,450 10,800 10,800 16,200 16,200 16,200
- Rent - - 1,500 1,500 1,500 1,500 1,500 3,000 3,000 4,500 6,000 6,000
- Utilities - - 300 300 300 300 600 600 600 900 1,300 1,300
- Telephone - - 150 150 150 150 300 300 300 450 450 450
- Advertising and Promotions - 5,000 2,500 5,000 5,000 10,000 15,000 25,000 5,000 10,000 15,000 25,000
- Office Supplies and Expenses - - 10,000 - - - 20,000 - - - 30,000 -
- Insurance - - - - - - - - - - - -
- Legal and Accounting - - - - 2,500 - - - 5,000 - - -
Subtotal: Cash provided by/(used in) Operating Activities
(Working Capital Requirement) $ - $ 30,500 $ 25,850 $ 34,330 $ 43,526 $ 55,541 $ (7,541) $ 28,211 $ 77,934 $ 128,650 $ 148,135 $ 235,829
Cash Flows from Investment Activities
+/- Investments in Inventories $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
+/- Other Resources and Materials - - - - - - - - - - - -
+/- Capital Uses of Funds from Capital Budget (Excludes
Working Capital Requirement) (69,100) (41,500) (31,500) (27,000) (27,000) (27,000) - - (30,000) (30,000) (30,000) -
Subtotal: Cash provided by/(used in) Investment Activities $ (69,100) $ (41,500) $ (31,500) $ (27,000) $ (27,000) $ (27,000) $ - $ - $ (30,000) $ (30,000) $ (30,000) $ -
Cash Flows from Financing Activities
+/- Owner Investments/Distributions $ 90,000 $ - $ - $ - $ - $ - $ - $ -
+/- Proceeds from Loans/Payments on Loans 50,000 (1,820) (1,820) (1,820) (1,820) (1,820) (1,820) (21,820) (21,820) (6,820) - (61,379)
+/- Proceeds from Common Stock Sales/Repurchases - - - - - - - - - - - -
Subtotal: Cash provided by/(used in) Financing Activities $ 140,000 $ (1,820) $ (1,820) $ (1,820) $ (1,820) $ (1,820) $ (1,820) $ (21,820) $ (21,820) $ (6,820) $ - $ (61,379)
Total Cash Flows (Outflows) during Period 70,900 (12,820) (7,470) 5,510 14,706 26,721 (9,360) 6,391 26,114 91,830 118,135 174,449
Cash Balance at End of Period $ 70,900 $ 58,080 $ 50,610 $ 56,120 $ 70,826 $ 97,548 $ 88,187 $ 94,579 $ 120,692 $ 212,523 $ 330,658 $ 505,107
CAPITAL BUDGET: SOURCES AND USES OF FUNDING
First Year Second Year Third Year
Sources of Funds Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Cash Balance at Beginning of Period $ - $ 70,900 $ 58,080 $ 50,610 $ 56,120 $ 70,826 $ 97,548 $ 88,187 $ 94,579 $ 120,692 $ 212,523 $ 330,658
Cash Flows from Operations - 30,500 25,850 34,330 43,526 55,541 - 28,211 77,934 128,650 148,135 235,829
Owner Investment 90,000
Bank Debt 50,000 - - - -
Other Debt - -
Equity Financing -
Total Sources of Funds $ 140,000 $101,400 $ 83,930 $ 84,940 $ 99,646 $ 126,368 $ 97,548 $ 116,398 $ 172,512 $ 249,343 $ 360,658 $ 566,487
Uses of Funds
Building/Real Estate $ -
Development of Web Portal & Software 30,000 14,500 4,500
Administrative Costs 2,000
Opening Inventory -
Pre-opening Expenses 10,100
Owner Distributions 27,000 27,000 27,000 27,000 27,000 27,000 30,000 30,000 30,000
Working Capital Requirement (from Operating Cash Flow
Analysis - - - - - - 7,541 - - - - -
Contingency (State Assumptions and Explanation) -
Total Uses of Funds for Capital Expenditures $ 69,100 $ 41,500 $ 31,500 $ 27,000 $ 27,000 $ 27,000 $ 7,541 $ - $ 30,000 $ 30,000 $ 30,000 $ -
Investments for Operating Activities - - - - - - - - - - - -
Cash at End of Period 70,900 58,080 50,610 56,120 70,826 97,548 88,187 94,579 120,692 212,523 330,658 505,107
Total Uses of Funds for All Purposes $ 140,000 $ 99,580 $ 82,110 $ 83,120 $ 97,826 $ 124,548 $ 95,728 $ 94,579 $ 150,692 $ 242,523 $ 360,658 $ 505,107
Note 1: Investors receive monthly stipend of $1,500 until revenues can support payment of a salary. This is estimated to take place in the 3rd quarter of the 2nd year of operations.
Note 2: Dividends are projected to be paid in the third year of operations of an amount approximately equal to the initial capital invested to start the business.