Executive summary
Best Bet PR officers will be offering private Public Relations services to companies and individuals in China. The firm is owned by three business partners; Felix Adam and Jared. The partners have done other businesses together and one of the partners has actually worked as a PR officer in Hong Kong before.
This means that the partnership has some basic details on the requirements of PR services and related services in Hong Kong. The partners also have business experience since they have other businesses though not in the PR service sector but construction.
One of the partners is also well versant with legal matters, currency and intellectual properties regulation issues. The third partner has stayed in China and worked in a local marketing firm. Best Bet PR officers therefore will benefit from the skills and experiences of its partners.
Best Bet PR officers will be offering personalized PR services. Due to the high cost of running a service business on a rented space, Best Bet PR officers intend to operate from clientsâ premises and offices. Other businesses in the industry usually rent out some space and provide transport services to and from the place.
Best Bet however will stand out and be different because the officers will be going to their clientsâ premises. This will ease the transport complications for the clients and it will be convenient for the business as well. It will also be cheaper for clients because the running costs will be relatively low compared to other companies in the industry.
The services offered by the company will emphasize on improved customer-company relation, communication among employees, evaluation of customers demands and communication with the media among other PR related services.
There are several other businesses offering PR services in Hong Kong. However, all of them operate in a conventional way where they hire or set up rooms where they offer services to clients. According to PR Newswire, if a start up is to excel it has to go out of the ordinary.
Best bet however will be different from hose other because the consultation sessions will be held in clientsâ premises and offices. This will make their service cheaper than competitors in the market.
China is densely populated with companies which mean there will be high demand. The business capital will be raised by its three partnersâ equal contributions.
Mission statement
Best Bet mission is to help companies through interactive teaching on PR skills to achieve value for their money by being efficient in relation with customers and business partners among other interest groups.
Objectives
- To create a sustainable business relationship with Chinese companies.
- To achieve maximum business growth and revenue by the third year in the industry.
- To penetrate the service industry in China and its neighborhood.
Opportunity & Assessment
Business Description
Best Bet PR officers will be offering private Public Relations services to companies and individuals in China. The firm is owned by three business partners; Felix Adam and Jared. The partners have done other businesses together and one of the partners has actually worked as a PR officer in Hong Kong before.
This means that the partnership has some basic details on the requirements of PR services and related services in Hong Kong. The partners also have business experience since they have other businesses though not in the PR service sector but construction.
One of the partners is also well versant with legal matters, currency and intellectual properties regulation issues. The third partner has stayed in China and worked in a local marketing firm. Best Bet PR officers therefore will benefit from the skills and experiences of its partners.
Product Definition
The services
Best Bet PR officers will be offering both personalized and company PR services Due to the high cost of running a service business on a rented space, Best Bet PR officers will operate from clientsâ premises. Others businesses in the industry usually rent out some space and provide transport services to and from the place.
Best Bet however will stand out and be different because the officers will be going to their clientsâ premises. This will ease the transport complications for the clients and it will be convenient for the business as well.
It will also be cheaper for the clients because the running costs will be relatively small compared to other companies in the industry. The services offered by the company will emphasize on improved customer-company relation, communication among employees, evaluation of customers demands and communication with the media among other PR related services.
Market Size / Growth Research
China (Hong Kong)
The country is largely populated with companies which mean that demand for PR services and other related services are high. The Chinese speak one ethnic language Chinese. They have strong cultural values which set them apart from others.
It is therefore important for any foreigner intending to do business in the country to understand their basic values, cultural practices and believes. For instance, the family ties and values are highly regarded through out the country.
Each member of a family has some duties and obligation owed to his family and toward others. For a business like Best Bet which intends to operate in the houses and homes of Chinese people, it is necessary to understand the Chinese values without criticizing them.
Language is an important part of culture; the Chinese speak and use one language. Because the modern business environment has gone global, it means need for PR services and other related services are on demand due to need to effectively interact and communicate with business partners and customers (Kwintessential, 2010, p 4).
The people of China like entering into business deals with people they know on a personal level. More often People get introductions in social events and get to know one another before getting into a business relationship.
Best Bet will not have a problem overcoming that because one of the partners had served in Hong Kong as PR officers earlier. Another partner has also stayed in the country and worked in a local marketing firm. Best Bet will rely heavily on the contacts established earlier by these two partners.
After having a few companies, referrals will be given and stronger business relationships will be established. The Chinese like communicating honestly and giving precise answers according to Kwintessential.
Best Bet will need to therefore give specific time tables on the service provision programs; for example one can not say that the program will take a few weeks or months to a Chinese. One would be needed to be precise and say exactly how many weeks or months (Leroux 12).
The people of China appreciate use of business cards. Best Bet will prepare presentable business cards. They will use the cards to gain more contacts.
In creating business relationship in China exchange business card after preliminary introductions. Best Bet will have cards printed in English on one side and in Chinese other back side since Chinese is the language spoken in Hong Kong (Kwintessential 4).
Market & Sales Plan
Competitive advantage
There are several other businesses offering PR services in China. However, all of them operate in a conventional way where they hire or set up rooms where they offer the services to client companies and individuals. Best bet however will be different from the others because it intends to offer the services to clients from their premises.
This will make their service cheaper than competitors in the market. China is densely populated which means there will be high demand (Leroux 14).
Entry strategy
Best Bet intends to enter the Chinese PR service market by starting small and growing step by step. The business in its initial startup stage will rely heavily on the help of the two partners who have worked and lived in the country.
One of the partners has served as a PR officer in the country before and therefore will get back to earlier client companies for referrals and introduction to others Chinese. Awareness will be done by way of giving out business cards in the initial stages.
However, when the business gets on the move, mass media advertising will be done. Best Bet also plans to stick notices on public notice board about their business after getting permission from the relevant authorities. The three partners will actively engage in as many social events as possible to get some more business contacts (Stephenson 4).
Business Organization
Best Bet will be registered as a partnership business with three partners. Profits and losses will be share equally because the partners have equally contributed to the startup capital. Task will be shared and allocated in line with each partner area of expertise and skills.
It will have a partnership deed detailing on the operations of the business and rights, duties and obligations of each partner. Should the business come to dissolve, any assets owned will be equally shared among its partners (Stephenson 5).
Operating Strategy
The business will start slowly, penetrate the market and remain in the market. One of the businesses strategic goals is to diversify to PR services and related services.
It will therefore continue conducting market research on the needs of the Chinese people and the consumer behaviors to sustain its goal. Its strategic objectives will be aligned with the needs of the target market (Stephenson 3).
Elevator Pitch
To ensure that the business offers quality Public Relations services, comparisons with other businesses offering PR services in Hong Kong will be made. Opinions on the quality of service given will be solicited from companies and professionals seeking PR services.
This will make sure that business keeps improving and meeting the companiesâ needs. Best Bet in the business of service provision where unlike in goods the service cannot be separated from its provider nor is it tangible.
According to Stephenson, it is therefore hard to compare the service offered since it has no physical features. Information on Customer perceptions and satisfaction would there be obtain from their feedback.
Field Report
Legal issues
It is important for all business to understand the legal implication of doing business in foreign countries. In all countries, there are some legal rules and requirement that are put to place in order to protect governments, the consumer publics and the businesses they are pursuing.
Best Bet plans to familiarize with all such legal requirements, and to abide by them to have the business penetrate and excel in a market in a foreign country.
One example of such regulations is that any person going to China to work of open up a business should have final Visa processed from their home country before leaving for China. Again these requirements are not the same for people from different countries of origin (Kwintessential 4).
Best Bet will register itself with the relevant bodies for purposes of business permit, foreign business incentives and taxation where applicable.
SWOT Analysis
The SWOT analysis identifies and examines a company strategic strength, weakness, opportunities and threats. A companyâs strengths and weaknesses refer to factors that may have an impact on a business and are internal to company. Opportunities and threats are factors that are outside a company yet they may somehow impact on business and its operations (Kwintessential 3).
Strengths
Best Bet has one business partner who has taught operated in Hong Kong before hence well versed with the business environment prevailing. This gives the business an upper hand in setting up the PR Company in Hong since its partner is well versed with the business environment.
Another partner has lived and worked in Hong Kong before. The two will have some basic knowledge on the Chinese people culture business norms, values and heir expectations. It is important for any kind of business in whatever industry to understand the behaviors of its target market and their needs.
This will enable the Best Bet to tailor make its services for different needs among the target market. For instance, some people may be interested in seeking PR services for the purposes of doing business with foreigners; others may be interested in traveling to foreign countries and set business while there are others who will want gain PR knowledge for personal purposes in communication skills (Kwintessential 2).
Best Bet is three business partners have owned and run other businesses before. They therefore know and understand each others skills and abilities which will make allocation of tasks and duties much easier and effective (Kwintessential 1).
Weaknesses
Best Bet will be setting up a business with limited financial capital. The partners will thus do all the work as they cannot hire staff at the initial stage of the business. Administrative tasks, marketing, public relations and business development will be done by the partners (Kwintessential 1).
Opportunities
The biggest opportunity is that China especially Hong Kong is in great need of PR and related services due to high number of companies being set up and foreign investors attracted by the business status of the China. This creates the demand for PR and related services.
The country is also densely populated which again mean more demand. Globalization has also forced the Chinese to adjust their organizational PR department to the expected global PR standards (Kwintessential 3).
Threats
With the world going global and with rising technology advancement especially in the IT sector, it is possible to have e-service. This refers to where the target consumers could access PR services online and contact the organization via live chat online (Asia in Focus 3).
Best Bet however, has analyzed that and intends to move with the trend. At a later stage in the business, Best Bet will also diversify from its core business of offering PR services to individual companies from their premises to online Pr consultative services. It will also offer other PR related services to companies (Asia in Focus 3).
Currency Issues
Best Bet does not expect to have problems with the Chinese currency. According to Asia in Focus, there are foreign exchange bureaus where one can convert to whatever currency one prefers.
Advertising and Marketing
The business will rely on use of public notice boards to market and advertise its services. However, this is just for the initial stage, later when the business grows it will be able to use other forms of advertising like the broadcast and print media.
Business cards will also be used to create awareness and pass out the message on availability of PR services. Word of mouth advertising will also be important to the business; satisfied students will be encouraged to share with other Chinese (Asia in Focus, 2011, p 3).
Assessments
Intellectual Property
There is a body that protects intellectual property and governs on use of intellectual property in China; the Chinese Intellectual Property Office (CIPO). The offices are located in Hong Kong metropolitan City.
Best Bet will patent any books or PR consultative material it comes up with under the intellectual property requirement. The business will also follow the right procedures if it needs to use other peopleâs intellectual property (Asia in Focus 1).
Human Resources
The business will not be hiring people in its first year. However, after the business stabilizes it will need to recruit and hire PR officers. It could recruit from the students who successfully learn PR and related courses under its program or from outside. It will also need some IT technicians to take business advantage of highly developing technology (Asia in Focus 4).
Globalization
Globalization has reached all countries across the world. China has also not been left behind in adopting and embracing global business ideas and trends. Globalization effects on the Chinese economy as well as on their perceptions. It is one of the macroeconomic factors creating demand for PR services in China (Asia in Focus 4).
Financial Plan and financial projection statements
Funding Request & Exit Strategy
Amount & Type of Funds Requested
A startup capital of $40000 will be an appropriate amount for buying the starting requirements (assets, equipments/machinery), rent, insuring the business, and paying for all the start up expenses. $20000 of the amount will be raised from a financier, that is, an investor through presentation of the plan and showing the uses of the capital needed.
The company intends to pay the financier double the amount of the loan. Therefore, the interest rates charged will be equivalent to the double amount of the loan. In the first year, the interest paid will be equivalent to $400 and the rest of the amount will be divided by two and paid in the remaining two years.
In summary, the loan will be repaid in three years. The remaining capital required will be the stockholders equity accrued from other businesses (Asia in Focus 1).
New sensor technologies will be selling bonds after the business has picked well. The bonds will be sold to the public in order to obtain money to expand the business to other cities.
Exit Plan
New Sensor technologies will franchise its business. However, it is expected that the sensor/activator will be licensed and copyrighted under the patent law.
Entrepreneurship
Cash Flow Projections
List And description of the monthly fixed costs.
Projected cash flow burn rate for the business
(Cash + Revenue)/Negative Cash Outflow per Month = Number of Months Before Cash Runs Out.
$20000 + $15000 / $8920 = 3.9
Projected Balance Sheet
Balance Sheet for (Best Bet). As of (Month/Day).
Pie chart showing the current assets, long-term assets, current liabilities, and long-term liabilities
Income Statement Projections
Projected Income Statement for the business
For the Year Ending December 31, Year.
Risks & Assumptions
List of the risks and assumptions which will underlie the financial projection is given below.
Sources & Uses of Capital
Capital needed, When, What type and the terms.
How the money raised will be used.
List of the items needed to buy to start the business.
List the sources of financing for your start-up capital. Identify each source as equity, debt, or gift. Indicate the amount and type for each source.
Payback period
Payback = Start-up Investment
Net Profit per Month
Payback = $138885 / $9840 =14.11
Financing sources
companies doing well in the diaspora are appropriate sources of finances since many companies like IBM computer manufacturers have a great interest in technology development. IBM can be finance New sensor Technologies with exchange for equity. Moreover, extra finances will be obtained from Arts Wing Construction Company being a partner company.
Venture capital
Venture capital will enable the business to keep a capital reserve before commencement.
Breakeven Analysis
Breakeven Units = Fixed Cost
Gross Profit per Unit
7080/ 3.3 = 2145 units
Ratio Analysis
Key ratios
Current ratio = Current assets
Current liabilities = $567720/ $20000 = 22.386
Quick ratio = Quick assets (Quick assets = Current assets â inventory)
Current liabilities = $567720-58000 = $509720
509720/20000 = 25.5
Debt ratio =Total debt (or liabilities)
Total assets = 20000/ 567720 = 0.03
Debt to net worth ratio or debt to equity = Total debt (or liabilities)
Tangible net worth = 20000/141080 = 0.14
Times interest earned = Earnings before interest and taxes (or EBIT)
Total interest expense = 142080 / 20000 = 7.104
Average inventory turnover ratio = Cost of goods sold
Average inventory = 7920/58000 = 0.13
Net profit on sales =Net profit
Net sales (annual) =141080/150000 = 0.9
Net profit to equity = Net profit
Ownersâ equity (or net worth) = 141080/ 557860 = 0.02
Work Cited
Asia in Focus. âChina has appropriate level of forex reserves: officials.â ABI/INFORM Global. 2011. Web.
Investment Weekly News. âElectronic, Internet Commerce; More UK Entrepreneurs Research Online to Ensure Business Success.â ABI/INFORM Trade & Industry. 2011. Web.
Kwintessential. Service industry: New business start up. 2010. Available at: Leroux, Marcel. Essentials of setting up a service company. New York: Springer, 2005. Print.
Megan Schnabel. âHave an idea for a new business? It pays to do your homework First.â McClatchy – Tribune Business News, ABI/INFORM Dateline. 2011. Web.
PR Newswire. âStartup Expert Launches Entrepreneurial Advisory Service: Startup Expert is the simple way to launch your new business.â ABI/INFORM Dateline. 2011. Web.
Stephenson, James. âStart a Service Businessâ Everyone has skills, knowledge and Experience–and anyone can turn those assets into a thriving business. 2011. Web.
Wall Street Journal. âReasons to Start a Business This Year.” ABI/INFORM Global. 2011. Web.