You are on page 1of 31

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Mr.Niranjan Mutkekar in
this business plan is confidential; therefore, reader agrees not to disclose it without the express
written permission of Mr.Niranjan Mutkekar.

Upon request, this document is to be immediately returned to the undersigned.

Niranjan Mutkekar

Signature

Niranjan Mutkekar
Name (typed or printed)

12/20/2010
Date

This is a business plan. It does not imply an offering of securities.


Table of Contents

1.0 Executive Summary ................................................................................................................ 1


1.1 Objectives ............................................................................................................................... 1
1.3 Keys to Success .................................................................................................................... 2
2.1 Company Ownership ........................................................................................................... 2
2.2 Start-up Summary............................................................................................................... 2
Table: Start-up ......................................................................................................................... 2
3.0 Services....................................................................................................................................... 3
4.1.1 Companies Utilization of Social Media ................................................................... 6
4.2 Target Market Segment Strategy ................................................................................... 8
4.3 Service Business Analysis ................................................................................................. 8
4.3.1 Competition and Buying Patterns ........................................................................... 9
5.1 Website Marketing Strategy ............................................................................................. 9
5.2 Development Requirements ........................................................................................... 10
6.0 Strategy and Implementation Summary........................................................................ 10
6.1 SWOT Analysis .................................................................................................................... 10
6.1.1 Strengths ...................................................................................................................... 10
6.1.2 Weaknesses.................................................................................................................. 11
6.1.3 Opportunities ............................................................................................................... 11
6.1.4 Threats........................................................................................................................... 14
6.2 Competitive Edge ............................................................................................................... 14
6.4 Sales Strategy ..................................................................................................................... 14
6.4.1 Sales Forecast ............................................................................................................. 15
Table: Sales Forecast ....................................................................................................... 15
7.0 Management Summary ........................................................................................................ 16
7.1 Personnel Plan ..................................................................................................................... 16
8.0 Financial Plan .......................................................................................................................... 16
8.1 Start-up Funding ................................................................................................................ 16
Table: Start-up Funding ...................................................................................................... 16
8.2 Important Assumptions.................................................................................................... 17
8.3 Break-even Analysis.......................................................................................................... 17
Table: Break-even Analysis ................................................................................................ 17
8.4 Projected Profit and Loss ................................................................................................. 18
Table: Profit and Loss ........................................................................................................... 18

Page 1
Table of Contents

8.5 Projected Cash Flow .......................................................................................................... 20


Table: Cash Flow.................................................................................................................... 21
8.6 Projected Balance Sheet .................................................................................................. 22
Table: Balance Sheet ............................................................................................................ 22
8.7 Business Ratios ................................................................................................................... 22
Table: Ratios ........................................................................................................................... 22
8.8 Bibliography…………………………………………………………………………………………………….31

Page 2
Social Media Consulting

1.0 Executive Summary

Social Media Market is expanding rapidly. With collective user base of over 1 Billion it will be the
dream market for any company, brand or corporation. Social Networks contains most accurate data
about users from around the globe. Social ‘U’ is a Social Media marketing firm aiming for that market
with the help of dedicated and hardworking individuals. Social ‘U’ plans to leverage the existing users’
data on Social Networks to map out marketing strategies for our clients. We will ensure complete
satisfactory solutions to companies’ social media networking needs. Social ‘U’ aims to specialize in
creating targeted Social Media marketing strategies, map their implementation plans and efficiently use
the generated data for analytics and ROI measurements. Given below are our forecasted sales, growth
margin and Net profit. We will achieve high level of success by molding our strategies as per clients
needs.

1.1 Objectives

1. Help businesses gain market penetration through Social Media Networks.


2. Achieving 30-60% more Social Media penetration.
3. Creating a reputation as a Social Media Consulting firm by providing targeted marketing
strategies.
4. Focusing on our clients needs, wants and speculating the future demands by being proactive.

1.2 Mission

Social 'U' Consulting offers development and execution of 'Social Media Strategies' for your
business. Is your business lacking the well deserved brand identity? We can provide you with
the solution. We specialize in only one thing, Social Media Optimization. The wave of
opportunity in Social Media Marketing is hitting the shores and every business is diving in. Are
you the one lagging behind? We will guide you. We will create a targeted strategic plan to
increase your brand identity and marketing penetration on Social Media Networks such as
Page 1
Social Media Consulting

Facebook, Twitter etc. The new era of communications and marketing has come. Let us help
you profit from it.

1.3 Keys to Success

Keys to success for Social 'U':

1. Development of exceptional Social Media Strategies which will be our core competency.
2. Targeted solutions addressing your specific needs.
3. Offering low-cost solutions which will generate high-value returns in Customer satisfaction.
4. Professional handling of client information - Your information is completely confidential and
secure.
5. Increasing your customer base and ROI.

2.0 Company Summary

Social ‘U’ is a Social Media Consulting firm which will provide high-level expertise for developing
and execution of strategies for social media optimization.

2.1 Company Ownership

The Company, Social U, is a currently a sole proprietorship, owned by Mr. Niranjan Mutkekar.
As the operations will expand the owner will consider additional business partners specifically
'Social Media Marketers and Specialists'.

2.2 Start-up Summary

For the Start up of Social 'U', after initial home based operations will kick off we will be looking
for rental space in near future. Our office will be located in the commercial district of Miami. The
total current expenses for start-up will be around $5,100 (Home Base). The other cash at hand
should be around $1000-$1500. The start up expenses is not much as we are going to supply
our own furniture, laptops etc. till the business kicks off. After that we plan to expand both the
office space and headcount.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $500
Rent $1,000
Computer $800
Other $1,500
Total Start-up Expenses $3,800

Start-up Assets
Cash Required $1,100
Other Current Assets $100
Long-term Assets $0
Total Assets $1,200

Total Requirements $5,000

Page 2
Social Media Consulting

3.0 Services

Social U will provide expert solutions for your Social Media Optimization needs. Social U will
handle everything from developing the customized strategies for your business. Social ‘U’ will
implement them to achieve successful result. Social ‘U’ is performance driven company and we
will help you achieve competitive advantage in this developing market.

We specialize in:

1. Facebook, Twitter, Friend feed real time analytics.


2. Analyzing existing businesses and crafting social media strategies based on clients needs.
3. Setting up Long-term and Short-term goals and objectives.
4. Creating and Executing Social Media Marketing campaigns.
5. Provide real time solutions for maintaining your social media campaigns.

4.0 Market Analysis Summary

Social Media Marketing is most recent and efficient way of communication. Users are now
spending more and more time online on Social Media Networks. The main contender web sites
for Social Media interactions are Facebook with 500 million active users, Twitter with 175
million users), MySpace with 130 million monthly active users. A study by Virtue for Facebook
posts revealed that 1500 major brands shared 1.64 million posts and received 7.56 million
comments from Aug 10, 2007 till Oct 10, 2010. The companies are also increasing their share
in the Social Networks by utilizing it for sending messages, coupons, receiving real time
feedbacks and providing valuable customer service.

Page 3
Social Media Consulting

The influence of Social Media networks is spreading like wildfire. Different age groups have
differentiated themselves for the usage of social media networks. For ages 25 and above, Social
networks are medium to connect with old friends, colleagues and relatives. Place where people
can stay in contact with family and friends. While younger generation is vibrant on social media
sites, for them it is a medium to manage their complex social lives.
With so many users, there 'likes' of fan pages and ‘followings’ of the brands one can imagine
the amount of direct user related data which is available through social networking sites. The
major core of Social Media marketing is based on utilizing the existing data (number of
followers, there conversations and comments) available for various companies, activities and
brands. This core data can be used to target the existing customers and also to attract more
new customers by plotting and executing definitive strategies. The theme behind social media
marketing is simple "Create, Converse and Utilize".

Social 'U' will be a forerunner in making existing as well as new coming brands more interactive
and visible on the social media scene. Each company is different and their interaction with the
customers will provide varied results. Thus, Social 'U' will engage in extensive research about
the company and brand. Dedicate quality time to listen to customers and employees, and craft
value adding strategies which will range from pushing the exact content users need to start
social interaction and measure their feedbacks. The most important part will be utilization of
information gathered wisely to generate quality content. The social engagement will result in
more number of followers of the company/brand and create a specific social brand image in
customers mind.

See below the Marketing compass created by Social Media Guru Brian Solis.

Page 4
Social Media Consulting

Page 5
Social Media Consulting

Social 'U' will define measurable goals and objectives which will focus exactly on what
customers want to generate more traffic for their site. The social media networks will be used
as enticers through pushing of quality data (new collections, items, coupons, sales, feedback on
products etc) through which customers will be lead to the actual e-commerce web sites, blogs
or brick and mortar stores. Social 'U' will always look for newer techniques and non
conventional marketing strategies based on current market trends and implement them on
Social Media sites.

4.1 Market Segmentation

Social Media market is huge with Facebook (500 million active users) and Twitter (175 million
active users) leading the pack. In order to access the current customers and potential
customers all the business to consumers companies will use our facilities. The companies can
be differentiated based on the industry they are in and the company size. Our market can also
be divided by types of products and services. But our main target market will be small business
to customer companies which will use Social Media channels to better connect to their
customers. The need for this interaction is mutual. With the social media channels in place, a
company can push quality content to the consumers directly. This includes saving money on
existing marketing practices utilized by companies for example: printing of large amount of
coupons which people receive through their regular mails. By utilizing the targeted coupons and
other promotional offers for consumers, companies can bring in more customers and cut down
on their costs. Also a communication channel can be established in real time with the customers
to measure their feedbacks, provide customer support and generate more followers.

4.1.1 Companies Utilization of Social Media

This is the infographic for how companies are utilizing the social media:

Page 6
Social Media Consulting

Page 7
Social Media Consulting

4.2 Target Market Segment Strategy

The main target market for Social 'U' will be local small businesses. They will be able to
generate more followers and attract more customers through utilization of Social Media
Marketing channels. This will enable them to increase their customer interactions and they can
provide more products/services based on customers likes, wants and demands.

4.3 Service Business Analysis

The business of Social Media Marketing is split between large number of small and medium size
consulting firms. Also every other large organization or company have their own marketing
managers working on Social Media campaigns. But as this is a relatively new field there is large
untouched market space. This mainly includes the small-medium size businesses which are still
unaware of social media communication channels or which haven’t started using them for their
businesses. As they will become aware of the Social Media Marketing and its direct impact on
growth of businesses they will need help from consulting firms like Social 'U'.
Social 'U' will compete against many social media marketing firms locally and nationally. The
success of Social 'U' depends on successful content generation, marketing strategy
development and execution for our customers and through increasing the number of followers
on Facebook, Twitter and other social media web sites. See the below infographic to visualize
the existing situation of marketers using Social Media:

Page 8
Social Media Consulting

4.3.1 Competition and Buying Patterns

The major factor for our customers to utilize services with Social 'U' will depend upon success of
our strategies. As we will gather experience, we will gather more followers and earn
professional reputation.

5.0 Web Plan Summary

At Social 'U' we assess your needs for optimizing your social networking needs. Once we
establish the needs we develop strategies around them and start addressing their engagement
and deployment.

5.1 Website Marketing Strategy

Our website will feature our current clients. It will also include our social profiles and a running
blog which will contain our discussions and communications. We will also create a map of
activities which we are currently involved in so that current as well as future clients will
understand extent of our work and various aspects of social media which we engage in.

Page 9
Social Media Consulting

5.2 Development Requirements

The Social 'U' website will be developed along with our social networking profiles. It will be
deployed in stages with first deployment anticipated month of Feb 2011. Our website will be
developed in Flash and will be simple yet informative. The website logos, graphics and social
engagement widgets of web sites such as (@Twitter, @Facebook, @Wordpress) will be
mentioned on all the pages so that we get mass coverage. We will also include our running blog
and features such as comments (provided via @disqus) and likes (provided via @facebook).
The website currently will be maintained by Mr. Niranjan Mutkekar but in future the
responsibility will be given to IT/Social Media person. The website will also contain our contact
information in addition we are going to create a unique link so that our future clients can create
projects in real time for our assessment. We project that we will be ready with full fledged
website in July 2011.

6.0 Strategy and Implementation Summary

The Strategy and Implementation summary is as described below.

6.1 SWOT Analysis

Social 'U' is very strong on factors such as resources, talent etc. The growth of Social Media
Networks is fast and Social 'U' is well prepared to help local businesses to utilize these
networks. The strengths of Social 'U' include highly competitive work environment, Professional
and multi-talented workforce, Out of Box thinking approach and high level of understanding of
the Social Networks, their design and features.

6.1.1 Strengths

· High level understanding of Social Media Networks and their effective usage.
Social 'U' will demonstrate a high level of knowledge about Social Networks. This will be
done through the use of interactive media channels. This demonstration will be done for
both marketing of the company and building strong professional reputation. The live
examples without the specific details about our projects will be made available on our
website. Social 'U' is highly capable of using the analytical and measurement tools for Social
Media networks.

· High proficiency in drafting objective paths using existing Social Media


frameworks.
Social Media networks provide a basic framework for all the businesses to set up their
presence on them. For example: Facebook has Company Pages which anyone can join or
Fan pages for allowing users to be Fans of Brands social profile pages. Data can be pushed
to all the fans/members of the community on Facebook. Twitter account can be opened and
should be gotten verified (if possible) by Twitter. Twitter has its own analytical tool which
gives details about followers/following relation, who is favorite follower etc. You Tube also
has similar analytical tool which measures the number of hits over the period, which country
it got most hits from and also the age group of the audience.
Social 'U' is highly proficient in using these basic tools as well as expert tools provided by
oneforty.com or Hoot suit.

· Effective problem solving approach with focus on detail.


Social 'U' will map the basic requirement of using the Social Media by getting detailed
knowledge from each of our clients. And then clearly identify the objectives to be set for the

Page 10
Social Media Consulting

Social Media Networks. Once set the goals and objectives can be assessed through
analytical tools which will measure the ROI for our clients on the basis of More followers,
new customers, emotional attachment to the company, monitory gains etc.

· Exceptional sense for Strategic and Logical analysis of problem.


Social 'U' employs best methods available for solving your Social Media problems. Most of
the campaigns will be drafted after considering all the input and output conditions. We will
provide Strong educational and professional employee backgrounds to answer your
problems.

· Focus on customer needs and translating them into clear goals.


Customers are everything for us. Social 'U' will work around customers’ time schedules and
will put in extra hours to do the right job and achieve the high satisfaction scale with our
customers.

6.1.2 Weaknesses

· Fast paced Social Media environment.


Social Media Networking revolves around Facebook, Twitter, MySpace, Blogs and You Tube.
There are varied numbers of tools or widgets which can be applied to these networks so
that hits on particular page can be analyzed and assessed. Every day more of such
applications load out in market making it questionable as to which particular application to
be used and which will give the best results.

· Rapid change in technology and accessories.


The technology change is immense. The social space is fast changing and to keep up with it
will require hard work. Social 'U' should be up to date on the technology front as the
products in technology have small life cycles and huge number of new products gets
introduced on daily basis.

· Vast number of resources for analysis.


According to SocialWiki there are more than 160 registered tools are available for social
media analysis.

· Relatively new firm.


Social 'U' is just setting off the ground. Thus initially it will be problematic for it to attract
customers based on only the reputation. But Social 'U' believes to work hard to achieve the
reputation desired to support bigger clients. We will be loyal to our old customers but at the
same time will develop reputation to attract high end customers.

6.1.3 Opportunities

· Everyday growing population of Social Media users.


Every day around 300,000 new accounts are added to Twitter while around 175 million
people log to use it. The sheer number of people on Social Networks creates that much
amount of data related to their tastes, preferences and activities. This is a great opportunity
for companies whose products people use on regular basis to understand customers’ wants
and needs. At the same time engage in a real time conversations which will help companies
enhance their products and services.

· People providing data by their own this can be effectively utilized.


People provide their own data, likes, preferences, activities etc. Real time conversations can
be started which will give insight of customers’ mindsets for choosing a particular
Page 11
Social Media Consulting

products/service.

· Social Media networks are very less cost high return investments.
The basic network frame is all present- People, Networks and Groups. It’s very cost
effective to set up a Social Media profile. And upon creating awareness, development of
interests and engagement with customers on these networks the generated data can be
utilized in many ways. For example : Rallying new campaigns, Testing new
products/Services, Real time customer service etc.

· Still an emerging market so large chunk of untapped population.


Even though Facebook boasts around 500 million users, majority of small/medium business
units are either unaware or if aware don't know how to use these vast networks for their
own use. Social 'U' is eyeing that market where old players want to jump SMOs (Social
Media Optimization). And sooner or later every business has to get on the Social Media
Marketing bandwagon.

· Following Infographic provides information about Increase in Social Media Ad


spending.

Page 12
Social Media Consulting

Page 13
Social Media Consulting

Infographic created by Social media group ‘Flowtown’

6.1.4 Threats

· Still poor penetration of Social Media understanding.


Social Media penetration is still poor especially in third world countries. And as most
businesses boasts national & international customers it can be seen as a threat for newer
companies who want to join in for Social Media Optimization.

· Old businesses which are egoistic and don't want embrace the changes.
Many businesses are still being run old style. They have their tough bureaucratic systems in
place which are tough to change.

· New opportunities but with added risk factors.


Social Media is a two faced dagger. News is spread like wildfire on social media thus one has
to be very careful about the content they provide and should be able to anticipate their
followers’ perceptions. Bad publicity can be very bad for a company.

· Emergence of many small-medium firms providing similar services. Thus making it


highly competitive market.
Market entry is medium/easy thus there are many players who are actively engaging in
Social Media Campaigns and marketing themselves as better company for SMO (Social
Media Optimization). Many of these severely lack in quality and necessary skills which can
harm the reputation of the Social Media Marketing scene.

· Social Media Networks also have many adverse effects if not used wisely.

6.2 Competitive Edge

Social 'U' has created a vision for its future. The first phase will involve increasing company’s
social network presence. We have till now distributed quality content regarding Social Media
technology and future. We have armed ourselves with analytics and ROI measurements of
social networks. Our competitive edge is our strong background experience in Marketing, IT
consulting and Customer service. We are channeling all our experience to build up a
professional social media profiles. Our approach to the customers’ social media will be unique.
We are detailed oriented and will not formulate any strategies unless we have all the
information of customers wants and needs. We will speculate our clients’ future demands. We
will handle maximum of 5 customers at a time thus giving our complete focus.

6.3 Marketing Strategy

The following sections describe marketing strategies for Social 'U'.

6.4 Sales Strategy

Our main sales strategy will have one agenda - 'Communication'. Through our Social Media
profiles, blogs and our website the current and future followers will be constantly informed
about our work. The sales will be by undertaking consulting projects. To achieve maximum
efficiency and focus on customers we will handle 5 customers at a time.

Page 14
Social Media Consulting

6.4.1 Sales Forecast

The sales forecast is based on our fee structure for per hour of our consulting services which
are:

We are going to charge Twitter and Facebook marketing (Only writing Marketing plans) - $150
per hour.
Analytics of Existing Twitter and Facebook accounts - $100 per hour.

The details of the sale forecast are as described in above table.

Table: Sales Forecast

Sales Forecast
FY 2011 FY 2012 FY 2013
Sales
Twitter and Facebook Marketing $17,214 $26,000 $40,000
Twitter and Facebook analytics $13,605 $20,000 $25,000
Total Sales $30,819 $46,000 $65,000

Direct Cost of Sales FY 2011 FY 2012 FY 2013


New Clients of Social 'U' $6,409 $8,000 $10,000
Maintaining existing clients Social Media profiles $4,273 $5,000 $6,000
Subtotal Direct Cost of Sales $10,682 $13,000 $16,000

Page 15
Social Media Consulting

7.0 Management Summary

The initial Management team will be Mr. Niranjan Mutkekar and some prospective members.
We will be adding additional team players and team leaders as we expand. The initial marketing
will be dominantly through social media channels. Following infographic shows how we are
going to handle social media on various levels:

7.1 Personnel Plan

As stated in management summary the work will be undertaken by Mr. Niranjan Mutkekar and
some other interested members.

8.0 Financial Plan

Social 'U' being a consulting company, does not carry any tangible product inventory. All the
expenses/sales will be on debit/credit basis.

8.1 Start-up Funding

The costing is explained in above table. As it’s a start-up firm we are still in the initial phases of
acquiring additional investments.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $3,800
Start-up Assets to Fund $1,200
Total Funding Required $5,000

Assets
Non-cash Assets from Start-up $100
Cash Requirements from Start-up $1,100
Additional Cash Raised $0

Page 16
Social Media Consulting

Cash Balance on Starting Date $1,100


Total Assets $1,200

Liabilities and Capital

Liabilities
Current Borrowing $1,000
Long-term Liabilities $1,000
Accounts Payable (Outstanding Bills) $500
Other Current Liabilities (interest-free) $0
Total Liabilities $2,500

Capital

Planned Investment
Owner $0
Investor $0
Additional Investment Requirement $2,500
Total Planned Investment $2,500

Loss at Start-up (Start-up Expenses) ($3,800)


Total Capital ($1,300)

Total Capital and Liabilities $1,200

Total Funding $5,000

8.2 Important Assumptions

We assume the Social marketing scene is going to grow rapidly and by 2015 around 80% of the
companies will use social media marketing.

8.3 Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $1,190

Assumptions:
Average Percent Variable Cost 35%
Estimated Monthly Fixed Cost $778

Page 17
Social Media Consulting

8.4 Projected Profit and Loss

The below mentioned Profit Loss table is a rough draft. The rent and other additional expenses
are shown to be zero as we will be operating from our individual houses till we find a place to
rent. The first year estimated profits will be $15000 approximately but can increase and
decrease depending upon the external factors. The table will be updated regularly as the
information will flow in.

Table: Profit and Loss

Pro Forma Profit and Loss


FY 2011 FY 2012 FY 2013
Sales $30,819 $46,000 $65,000
Direct Cost of Sales $10,682 $13,000 $16,000
Other Costs of Sales $4,273 $7,000 $12,000
Total Cost of Sales $14,955 $20,000 $28,000

Gross Margin $15,864 $26,000 $37,000


Gross Margin % 51.48% 56.52% 56.92%

Expenses
Payroll $0 $0 $0
Marketing/Promotion $3,211 $5,000 $7,000
Depreciation $2,143 $3,500 $5,000
Payroll Taxes $2,901 $0 $0
Other $1,077 $0 $0

Total Operating Expenses $9,332 $8,500 $12,000

Profit Before Interest and Taxes $6,532 $17,500 $25,000


EBITDA $8,675 $21,000 $30,000
Interest Expense $450 $610 $960
Taxes Incurred $1,825 $5,067 $7,212

Net Profit $4,258 $11,823 $16,828


Net Profit/Sales 13.82% 25.70% 25.89%

Page 18
Social Media Consulting

Page 19
Social Media Consulting

8.5 Projected Cash Flow

The cash flow projections show that provisions for ongoing expenses are inadequate and will
need to raise some more capital investment. But as the seed capital is made available the
project will start generating revenues.

Page 20
Social Media Consulting

Table: Cash Flow

Pro Forma Cash Flow


FY 2011 FY 2012 FY 2013
Cash Received

Cash from Operations


Cash Sales $30,819 $46,000 $65,000
Subtotal Cash from Operations $30,819 $46,000 $65,000

Additional Cash Received


Sales Tax, VAT, HST/GST Received $4,623 $6,900 $9,750
New Current Borrowing $2,650 $3,000 $5,000
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $2,999 $5,000 $5,000
Sales of Other Current Assets $2,143 $5,000 $6,000
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $43,234 $65,900 $90,750

Expenditures FY 2011 FY 2012 FY 2013

Expenditures from Operations


Cash Spending $0 $0 $0
Bill Payments $21,796 $31,278 $42,145
Subtotal Spent on Operations $21,796 $31,278 $42,145

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out $5,794 $7,000 $10,000
Principal Repayment of Current Borrowing $3,052 $5,000 $6,000
Other Liabilities Principal Repayment $3,152 $5,000 $6,000
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $2,530 $3,500 $4,000
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $36,324 $51,778 $68,145

Net Cash Flow $6,911 $14,122 $22,605


Cash Balance $8,011 $22,132 $44,738

Page 21
Social Media Consulting

8.6 Projected Balance Sheet

The following table presents the balance sheet for Social 'U'.

Table: Balance Sheet

Pro Forma Balance Sheet


FY 2011 FY 2012 FY 2013
Assets

Current Assets
Cash $8,011 $22,132 $44,738
Other Current Assets $487 ($1,013) ($3,013)
Total Current Assets $8,498 $21,119 $41,725

Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $2,143 $5,643 $10,643
Total Long-term Assets ($2,143) ($5,643) ($10,643)
Total Assets $6,355 $15,476 $31,082

Liabilities and Capital FY 2011 FY 2012 FY 2013

Current Liabilities
Accounts Payable $3,123 $2,521 $3,548
Current Borrowing $598 ($1,402) ($2,402)
Other Current Liabilities ($4,323) ($9,423) ($15,673)
Subtotal Current Liabilities ($602) ($8,304) ($14,527)

Long-term Liabilities $3,999 $8,999 $13,999


Total Liabilities $3,397 $695 ($528)

Paid-in Capital $2,500 $2,500 $2,500


Retained Earnings ($3,800) $458 $12,281
Earnings $4,258 $11,823 $16,828
Total Capital $2,958 $14,781 $31,609
Total Liabilities and Capital $6,355 $15,476 $31,082

Net Worth $2,958 $14,781 $31,609

8.7 Business Ratios

Business ratios are as shown in table. The industry profile ratios are based on Marketing
Research/Consulting industry. We are not planning for any Long term assets currently thus we
are not including them for second and third year.

Table: Ratios

Ratio Analysis
FY 2011 FY 2012 FY 2013 Industry Profile
Sales Growth 0.00% 49.26% 41.30% 11.29%

Percent of Total Assets


Other Current Assets 7.66% -6.55% -9.69% 53.41%
Total Current Assets 133.72% 136.46% 134.24% 74.67%
Long-term Assets -33.72% -36.46% -34.24% 25.33%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities -9.48% -53.65% -46.74% 36.27%

Page 22
Social Media Consulting

Long-term Liabilities 62.93% 58.15% 45.04% 17.17%


Total Liabilities 53.45% 4.49% -1.70% 53.44%
Net Worth 46.55% 95.51% 101.70% 46.56%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 51.48% 56.52% 56.92% 100.00%
Selling, General & Administrative Expenses 37.66% 30.82% 31.03% 78.96%
Advertising Expenses 10.42% 10.87% 10.77% 1.04%
Profit Before Interest and Taxes 21.20% 38.04% 38.46% 3.23%

Main Ratios
Current -14.11 -2.54 -2.87 1.46
Quick -14.11 -2.54 -2.87 1.19
Total Debt to Total Assets 53.45% 4.49% -1.70% 61.14%
Pre-tax Return on Net Worth 205.64% 114.27% 76.05% 24.85%
Pre-tax Return on Assets 95.72% 109.14% 77.35% 9.66%

Additional Ratios FY 2011 FY 2012 FY 2013


Net Profit Margin 13.82% 25.70% 25.89% n.a
Return on Equity 143.95% 79.99% 53.24% n.a

Activity Ratios
Accounts Payable Turnover 7.82 12.17 12.17 n.a
Payment Days 28 34 26 n.a
Total Asset Turnover 4.85 2.97 2.09 n.a

Debt Ratios
Debt to Net Worth 1.15 0.05 -0.02 n.a
Current Liab. to Liab. -0.18 -11.94 0.00 n.a

Liquidity Ratios
Net Working Capital $9,100 $29,423 $56,251 n.a
Interest Coverage 14.53 28.70 26.05 n.a

Additional Ratios
Assets to Sales 0.21 0.34 0.48 n.a
Current Debt/Total Assets -9% -54% -47% n.a
Acid Test 0.00 0.00 0.00 n.a
Sales/Net Worth 10.42 3.11 2.06 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Page 23
Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Sales $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889
Direct Cost of Sales $500 $550 $605 $665 $732 $805 $885 $973 $1,070 $1,177 $1,295 $1,425
Other Costs of Sales $200 $220 $242 $266 $293 $322 $354 $389 $428 $471 $518 $570
Total Cost of Sales $700 $770 $847 $931 $1,025 $1,127 $1,239 $1,362 $1,498 $1,648 $1,813 $1,995

Gross Margin ($700) $130 $653 $1,240 $1,654 $1,759 $1,872 $1,762 $1,872 $1,843 $1,885 $1,894
Gross Margin % 0.00% 14.44% 43.53% 57.12% 61.74% 60.95% 60.17% 56.40% 55.55% 52.80% 50.97% 48.70%

Expenses
Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Marketing/Promotion $150 $165 $182 $200 $220 $242 $266 $293 $322 $354 $389 $428
Depreciation $100 $110 $121 $133 $146 $161 $177 $195 $215 $237 $261 $287
Payroll Taxes 15% $100 $115 $132 $152 $175 $201 $231 $266 $306 $352 $405 $466
Other $50 $55 $61 $67 $74 $81 $89 $98 $108 $119 $131 $144

Total Operating Expenses $400 $445 $496 $552 $615 $685 $763 $852 $951 $1,062 $1,186 $1,325

Profit Before Interest and Taxes ($1,100) ($315) $157 $688 $1,039 $1,074 $1,109 $910 $921 $781 $699 $569
EBITDA ($1,000) ($205) $278 $821 $1,185 $1,235 $1,286 $1,105 $1,136 $1,018 $960 $856
Interest Expense $26 $31 $35 $38 $40 $40 $40 $42 $41 $40 $38 $38
Taxes Incurred ($338) ($104) $37 $195 $300 $310 $321 $260 $264 $222 $198 $159

Net Profit ($788) ($242) $86 $455 $699 $724 $748 $608 $616 $519 $462 $371
Net Profit/Sales 0.00% -26.89% 5.71% 20.96% 26.09% 25.09% 24.04% 19.45% 18.28% 14.87% 12.50% 9.55%

Page 1
Appendix

Table: Cash Flow

Pro Forma Cash Flow


Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Cash Received

Cash from Operations


Cash Sales $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889
Subtotal Cash from Operations $0 $900 $1,500 $2,171 $2,679 $2,886 $3,111 $3,124 $3,370 $3,491 $3,698 $3,889

Additional Cash Received


Sales Tax, VAT, HST/GST Received 15.00% $0 $135 $225 $326 $402 $433 $467 $469 $506 $524 $555 $583
New Current Borrowing $1,000 $400 $300 $200 $100 $0 $200 $300 $0 $0 $0 $150
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $140 $154 $169 $186 $205 $226 $249 $274 $301 $331 $364 $400
Sales of Other Current Assets $100 $110 $121 $133 $146 $161 $177 $195 $215 $237 $261 $287
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $1,240 $1,699 $2,315 $3,016 $3,532 $3,706 $4,204 $4,362 $4,392 $4,583 $4,878 $5,309

Expenditures Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Expenditures from Operations


Cash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Bill Payments $523 $700 $1,041 $1,303 $1,591 $1,840 $2,007 $2,191 $2,329 $2,545 $2,743 $2,983
Subtotal Spent on Operations $523 $700 $1,041 $1,303 $1,591 $1,840 $2,007 $2,191 $2,329 $2,545 $2,743 $2,983

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out $200 $230 $264 $304 $350 $402 $462 $531 $611 $703 $808 $929
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $322 $354 $389 $428 $471 $518 $570
Other Liabilities Principal Repayment $0 $0 $0 $0 $100 $322 $354 $389 $428 $471 $518 $570
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $400 $500 $100 $0 $200 $0 $500 $600 $50 $50 $50 $80
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $1,123 $1,430 $1,405 $1,607 $2,241 $2,886 $3,677 $4,100 $3,846 $4,240 $4,637 $5,132

Net Cash Flow $117 $269 $910 $1,409 $1,291 $820 $527 $262 $546 $343 $240 $177

Page 2
Appendix

Cash Balance $1,217 $1,486 $2,397 $3,805 $5,096 $5,916 $6,443 $6,705 $7,250 $7,593 $7,833 $8,011

Table: Balance Sheet

Pro Forma Balance Sheet


Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Assets Starting Balances

Current Assets
Cash $1,100 $1,217 $1,486 $2,397 $3,805 $5,096 $5,916 $6,443 $6,705 $7,250 $7,593 $7,833 $8,011
Other Current Assets $100 $400 $790 $769 $636 $690 $529 $852 $1,257 $1,092 $905 $694 $487
Total Current Assets $1,200 $1,617 $2,276 $3,166 $4,441 $5,786 $6,445 $7,295 $7,962 $8,342 $8,498 $8,527 $8,498

Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $100 $210 $331 $464 $610 $771 $948 $1,143 $1,358 $1,595 $1,856 $2,143
Total Long-term Assets $0 ($100) ($210) ($331) ($464) ($610) ($771) ($948) ($1,143) ($1,358) ($1,595) ($1,856) ($2,143)
Total Assets $1,200 $1,517 $2,066 $2,835 $3,977 $5,176 $5,674 $6,347 $6,819 $6,984 $6,903 $6,671 $6,355

Liabilities and Capital Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Current Liabilities
Accounts Payable $500 $665 $998 $1,250 $1,530 $1,773 $1,934 $2,113 $2,244 $2,454 $2,644 $2,875 $3,123
Current Borrowing $1,000 $2,000 $2,400 $2,700 $2,900 $3,000 $2,678 $2,524 $2,435 $2,007 $1,536 $1,018 $598
Other Current Liabilities $0 ($200) ($295) ($334) ($312) ($361) ($652) ($1,001) ($1,452) ($1,986) ($2,636) ($3,407) ($4,323)
Subtotal Current Liabilities $1,500 $2,465 $3,103 $3,616 $4,118 $4,412 $3,961 $3,636 $3,227 $2,475 $1,544 $486 ($602)

Long-term Liabilities $1,000 $1,140 $1,294 $1,463 $1,649 $1,854 $2,080 $2,329 $2,603 $2,904 $3,235 $3,599 $3,999
Total Liabilities $2,500 $3,605 $4,397 $5,079 $5,767 $6,266 $6,041 $5,965 $5,830 $5,379 $4,779 $4,085 $3,397

Paid-in Capital $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Retained Earnings ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800) ($3,800)
Earnings $0 ($788) ($1,030) ($945) ($490) $209 $933 $1,681 $2,289 $2,905 $3,424 $3,886 $4,258
Total Capital ($1,300) ($2,088) ($2,330) ($2,245) ($1,790) ($1,091) ($367) $381 $989 $1,605 $2,124 $2,586 $2,958
Total Liabilities and Capital $1,200 $1,517 $2,066 $2,835 $3,977 $5,176 $5,674 $6,347 $6,819 $6,984 $6,903 $6,671 $6,355

Net Worth ($1,300) ($2,088) ($2,330) ($2,245) ($1,790) ($1,091) ($367) $381 $989 $1,605 $2,124 $2,586 $2,958

Page 3
Appendix

8.8 Bibliography

1. Ira, G. (n.d.). 50 Ways to Measure Success in Social Media | Kyle Lacy, Social Media - Indianapolis. Kyle Lacy's Thoughts on Social Media Productivity, Innovation, and
Marketing. Retrieved December 7, 2010, from http://kylelacy.com/50-ways-to-measure-success-in-social-media/
2. Kessler, S. (n.d.). 6 Essential Steps for Executing Your Social Media Strategy. Social Media News and Web Tips – Mashable – The Social Media Guide. Retrieved December
7, 2010, from http://mashable.com/2010/11/30/social-media-execution/
3. Kotadia, H. (n.d.). 3 Reasons why you should provide Customer Support on Social Media | Social... - StumbleUpon.StumbleUpon.com: Personalized Recommendations to
Help You Discover the Best of the Web. Retrieved December 7, 2010, from http://www.stumbleupon.com/su/1cWGlZ/socialmediatoday.com/hkotadia/236851/3-
reasons-why-you-should-provide-customer-support-social-media/
4. Naslund, A. (n.d.). The Social Media Measurement Paradox « Social Media Monitoring and Engagement – Radian6. Social Media Monitoring and Engagement – Radian6.
Retrieved December 7, 2010, from http://www.radian6.com/blog/2010/11/the-social-media-measurement-paradox/
5. TechCrunch.com. (n.d.). Social Networking: The Future .TechCrunch . Retrieved December 7, 2010, from http://techcrunch.com/2010/12/05/social-networking-future/

Page 4