business plan for hr consultancy_khlz

8/7/2019 Business Plan for HR Consultancy_khlz

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Executive Summary:

Eminent Human resource consultants are a human resource consulting

company located in Downtown Toronto. EHRC has expertise in a wide

range of HR areas and is targeting the emerging company market. EHRS

will offer this market the ability to compensate client's employees with stock

options from their company. This will be especially appealing to many start-

up companies that find capital scarce.

Zoya Khalid, the founder and owner will be leveraging her past and current

personal/professional relationships to generate business for EHRC.

Why human resource consulting?

Changes in the work force and work place factors:

Hours of Work - Not long ago most companies operated on a standard eight

to five day a week work schedule. Recently, companies are learning toexperiment with a variety of work schedules to allow them to attract and

retain qualified associates.

Changing attitudes toward work: More single parent, increasing pressure to

reduce commute times and a lot of other issues require successful

organizations to reevaluate their work schedules and related Human

Resources practices to remain competitive. There is little doubt that these

changes will continue.

In the future, the need for change and adaptability will come at an ever

faster rate. An effective Human Resources function anticipates these

changes and provides solutions for the organization to consider and

implement.

Computers - Personal computers are found in virtually every organization

today. They have caused major changes in the work place. Many of these

changes are positive, some are not. All of them have had an impact on

people at work. Computer related issues such as training, physical andmental stress, the hows of workplace design and lighting affect people in

the work place. In order to recruit and retain people who can help the

company remain competitive, these issues must be addressed. An effective

Human Resources function will support managers by anticipating such

problems and working to develop answers that meet the needs of both the

organization and its people.



Personnel Related Budget Expenses - Direct personnel costs are often more

than 70% of companies¶ total operating budget.

Effective Human Resources function works to control these budget costs.

Three examples will help to make the point:

y Recruiting - Advertising, processing applications, interviewing,

hiring, training a new associate costs three to six months of salary per

position.

y Hiring a new associate commits the company to the expenditure of

thousands of dollars over several years. This investment can be

maximized by careful planning and management of the recruitment

function.

Mission

EHRC¶s mission is to provide human resource consulting for emerging

companies. We exist to attract and maintain customers. When we adhere tothis maxim, everything else will fall into place. Our services will exceed the

expectations of our customers.

Objectives

The objectives for the first three years of operation include:

y To create a service-based company whose primary goal is to exceed

customer's expectations.

y To increase our number of clients served by 20% per year throughsuperior performance and word-of-mouth referrals.

y To develop a sustainable start-up consultancy firm that can survive off

its own cash flow and has significant equity holdings in emerging

companies.

Vision:

To expand EHRC into markets within and outside of Ontario and eventually

in a period of 5 years align the company with another HR consulting firm

outside of Canada to start international employment services. There by

creating an exchange of talent, technology, and skills amongst various

countries in the world.

Company ownership

Eminent human resources is a sole proprietorship held and owned by Zoya

Khalid.

Structure of the company:

Departments:



y Finance:

Accounts

Profit analysis

Budgets and estimates

Expenses

y

Marketing :Advertisements

Public relations

Campaigns

Seminars

y Human resources:

Internal Pay roll

Promotion

Incentives

y Recruiters:

Talent acquisition team

Interviewers

y Office Administration

Operations:

General: The main of function of the Eminent human resource

consulting is performing HR functions for corporate and individual

clients. The office is located at 2 Sheppard Avenue east and the office

timings are Monday Friday : 9am to 6pm.

The physical plant: To date, market research has been completed and alease has been secured at 2 Sheppard Avenue east. For a two room office

of approx 400 sq feet, which will be very lucrative for the business as

many companies have their branches in this area?

Equipment: The equipment and furniture has been purchased after

negotiations with the sellers.



Materials: The stationary is purchased and repurchased on order basis

from a local supplier.

The next steps are as follows:

y Sign office lease within 30 days

y Complete leasehold improvements

y Sign equipment lease agreement and accept delivery of

equipment y Set-up equipment and test

y Finalize and print marketing materials

y Open for business

y Launch advertising and promotional plan

Human resources:

Management Teams Profile &

Ownership Structure

Eminent HR consultancy is a start-up business being incorporated in

Toronto,Ontario.

Zoya Khalid, Owner/Operator

Job Description

y Responsible for ensuring that the business earns a profit and

generates sufficient cash flowy Oversee all aspects of the business including but not limited to

consulting and marketing, production, client service, and

accounting

Qualifications:

y 1 years with a Vodafone Essar.

y Bachelor of Commerce degree from Jamia Millia Islamia

y Began career as a Customer executive because of people skills and

a desire to build business relationships,

Compensation:

y $30,000 a year.

I will also be using the services of Samantha Hegbert my friend and the

financial advisor for small business. I will be personally performing all

bookkeeping duties with advice from a Chartered Accountant.



Human Resources Requirements:

Yet to hire:

Full-time General Assistant

Job description Oversee appointment scheduling, service customers, resume short

listing, scheduling meetings with corporate clients replying back to the

general query emails and performing other miscellaneous functions

Compensation

$ 15,000

I will be responsible for training my support staff.

Business model of Eminent human

resource consultants:

Eminent HR

Consultants

Employees

Marketing

Infrastructure

Operating cost

Corporate

tie-ups

Clients

Share and equity

Commissionfrom colleges

Trainings and skill

workshops



Unique value preposition: The dual functioning of the company

catering to both, corporate clients and individual Career counseling and

job placements at a very reasonable price from individual client andstock or shares in lieu of cash from corporate clients.

Competitive advantage: Companies listed as our clients have been

amongst the best employers for a minimum of 3 yrs and above.

START-UP SUMMARYEminent human resources will incur the following start-up expenses:

y Two desks, two chairs, and two lockable file cabinets.

y Two computer systems including a CD-RW, printer and a third

computer to serve as a server.

y DSL router and DSL connections.

y Two telephones fax machine, and copier.

Please note that the following items which are considered assets to be used

for more than a year will label long-term assets and will be depreciated using

G.A.A.P. approved straight-line depreciation method.



y Start up expenses

y Legal

y Stationery

y Website development

y Total start up expenses

y Start up assets

y Cash

y Current assets

y Long-term assets

y Total assets

y Total requirements

SERVICES OFFEREDAn eminent human resource provides human resource consulting to

emerging companies and individuals in the GTA market. EHRC will charge

a below market rate and take stock options in the company.

It will provide consulting for the following service areas:

Functions Features Benefits



Executive search

After learning about your

business, EHC will research

and evaluate viable

candidates as well as pre-

screen and interview them

for you. Candidate reports

and recommendations for

offers will then be submitted

before you make a decision.

Time saving

Cost saving

Effort saving

First round screening

from a professional

Organizational

management

HRC will suggest solutions

that include special

assessment tools such as

employee surveys and

training workshops

They can facilitate

open communication

between management

on all levels to

improve performance

and increase morale.

Employee relations The ultimate goal is to

establish a greater sense of commitment from your staff

members, and make sure the

progress of your company is

on target.

Retention of

employees to makethe roots of the

employee base strong

and utilize the

experience within and

for the benefit of the

companies.

Performanceevaluation

Ayer¶s wide array of

solutions and tools includecompetency models,

feedback surveys, and

mission and values

development to increase your

human resource productivity

With a solid employee

benefits program, your staff will be motivated

to performance at their

highest potential and

be rightly rewarded

for their work.

For the individual client the services offered will be as followed:

Function Feature Benefits

Interview opportunities

Schedule and conduct

interviews for jobs

matching clients¶

profile

Having the opportunity

to get an interview

without having to

knock doors.



Training Soft skills training

People management

training

Better handling clients

and co-workers

Resume writing Resume designing and

updating.

Better branding

The pricing structure will either be an hourly rate or a per project fee. These

options will be settled on in negotiation with the client. In general, eminent

human resource consultants are willing to be as flexible as possible.

TARGET MARKET ANALYSIS

Eminent human resources aims at targeting the recent graduates middle level

executives as individual clients, and newly emerging companies as corporateclients.

Recent graduates will be target for the following reasons:

1. They need guidance and help to start their carrier.

2. EHRC introduces them to employers who are looking for

efficient and hard working employees.

3. Freshers require training for interviews and resume writing.

Emerging companies will be the target market for several reasons:

They are in need of HR services as they are growing rapidly.

They often do not have a large enough in-house solution as they are

increasing in size.

The talent acquisition teams of such companies need consultancies to help

them, find entry and middle level executives

Accepting stock options as compensation

The emerging company market can be further broken down into two

categories

Technology

Non-technology.



The breakdown helps in determining the right person for the right market

thereby giving us a fair idea about a candidate needed and by our client

Company and visa-versa.

MARKET SEGMENTATION

Eminent human resources market can be segmented into two different

groups, emerging technology companies and emerging non-technology

companies. Which will be then narrowed down based on the size of their

operations?

The ideal client for EHRC will be a company consisting of not more than

100-150 employees setup and operated within the GTA region. EHRC will

also limit itself to 25 clients in the present period though increasing

it,depending upon the growth of our company , to ensure quality business

solutions for its clients.

The emerging high-tech companies are going to be the larger of the two

segments. Even with the Internet bubble bursting within the last year, there

are still many different emerging high-tech companies proliferating. The

Business Journal of Toronto evidences this that in their annual list of fastest

growing companies for this year, 18 of the top 25 was technology

companies.

There are also non-technology companies that are emerging in the GTA area

and Eminent human resources will be able to serve them as well.



Market analysis pie chart 1

Score card Strategy plan of EHRC:

Potential

Customers Measure Y ear 1 Y ear 2 Y ear 3 Y ear 4 Y ear 5

Emerging

technology

companies

No. of

clients

obtained10 18 30 45 65

Emerging non-

technology

companies

No. of

clients

obtained

6 12 20 30 42

Individual

No. of

clientsobtained

25 55 110 200 340

Total 41 85 160 275 447



TARGET MARKET SEGMENT STRATEGY

Eminent human resources' two markets will be primarily targeted through

networking activities. Some networking will be conducted through the

Oregon Entrepreneur Association, an association that supports

entrepreneurial ventures in the local area. This organization has monthly

meetings that are in round-table format, allowing members to socialize.

Eminent human resources will also be networking from

personal/professional contacts that Major has developed professionally in

the last five years in the HR/start-up industry. EMINENT HUMAN

RESOURCES will also be relying on word of mouth to grow its customer

base.

INDUSTRY ANALYSIS:PORTER¶S 5 FORCES MODEL

Competition y High in technical companies

y Average in non-technicalcompanies

Substitutes Various but not absolutesubstitutes

y Other Hr consultants

y Training and workshop orgs.

y Human resources companies.

eg: Hewitt associates etc

Barriers to entry None

Power of buyers Significant but can be managed andobtained by negotiations and fair pricing strategy.



power of suppliers Irrelevantas it a service company

SUMMARY OF INDUSTRY ANALYSIS: As business operates in an

industry and is always surrounded by these forces thus it is very important to

estimate how feasible an industry is for this type of business thus the

analysis tells us that though the competition is tough and there are various

other players but as they cannot substitute us completely due to our unique

value preposition and there being no barriers to entry, the industry is healthy

and has a lot of scope for new players and growth.

In very simple terms Porter¶s model tells that if EHRC keeps tabs on the

bargaining power of its clients and accounts for the threats from its

competitors and potential substitutes, a very strong business can be put in

place.

NOTE: It would be worthwhile to mention here that this model has been

celebrated for long and is widely considered as one of the earliest insights

into how any industry and the competition in it can be analyzed.

PEST ANALYS:

Political analysis: - Politically the state government is stable The reasons

for success are encouraging new ventures, liberal labor laws, and most

importantly promoting infrastructure development.

Economical analysis: - As Ontario was not as severely hurt due to recession

as other parts of North America thus it has both the scope and opportunity

for the development and growth of a new business.

Social analysis: -The market is employment oriented and people try to

attain job security, comparatively high standard of living.

Technological analysis: - With the concentration of immigrants in the GTA

region, technically eco-friendly materials are been promoted for better

environment.



COMPETITIVE ANALYSIS:

Focused HR

services

Excel HR

consultants

Career builder

consultants

The career

counseling

interviewcoaching

(Untraditional

comp.)

Strengths

Well trained

recruiters

Excellent

network

among

employers

Very fast

paced and

result

oriented

Professional

trainers,

personal

guidance

Weaknesses

Tedious

operations

Amateur

interviewers

Low

networking

with

employers

Constant

change in

staff and

management

Y ears of

experience

3 years 2 years 1 year 5 years

Price Verycompetitive

and

affordable

Towards thehigher side

thus not

feasible for

new and small

businesses

Strategicpricing model

which

includes

Packages as

well as

onetime fee

Not acompetition

price wise as

the prices are

too high for

its segment

Market share

(among small

and new HR

consultancies)

8-10% 3-4% 9% 3%

SUMMARY OF COMPETITIVE ANALYSIS:

There are various players in the market with the same business background

but with various advantages and disadvantages thus eminent human resource

consultants will have to recognize the short comings and the strong points of



its competitors so as to formulate its strategy to defeat competition and

emerge as a successful human resource organization.

RISK ANALYSIS:

RISK INVOLVED MITIGATIONS

Change in the HR policies

of the industry

Continuous research and updating of

employees and softwares.

Elimination of HR

outsourcing process

Individual client will become a mainstream

focus

Competition Developing PR and networking with

companies which outsource to consultanciesand hire through consultancies

Rival offering services at

cheaper

price

Design attractive packages and combinations

for clients, offering value added services and

loyalty bonuses.

Pricing strategy and implementation summary:

Eminent Human resources will use their competitive edge of compensation

flexibility to attract emerging companies. This competitive advantage is

especially valuable to emerging companies who are typically struggling to



find enough capital to grow their business. Accepting stock options, as

compensation is useful because equity is one thing these companies have

lots of (that is of course if they haven't given it all away to the Venture

Capitalists).

Milestones

Eminent Human resources will have several milestones early on:

1. Business plan completion. This will be done as a roadmap for the

organization. This will be an indispensable tool for the ongoing

performance and improvement of the company.

2. Set up office.

3. EHRC¶s first 20 customers.

4. Profitability.

SALES STRATEGY

As stated earlier, the marketing and sales will be done primarily through

networking. This means the bulk of the leads will have been developed

through a personal/professional relationship that Zoya has developed either

in her previous professional work or through his activities with Humber

college and other similar associations. The sales spiel will be based on

Eminent Human resources experience in the field as well as their flexibility

for compensation. Zoya will be able to explain to the prospective client the

areas that she has experience in and the solutions that she can offer.

She will also speak to corporate clients about Eminent Human resources¶

ability to accept options in lieu of cash. This will be appealing to

companies, particularly in the current capital market,

which is quite scarce. Since capital is more difficult to come by now than in

the last few years, emerging companies will be excited about this option.

SALES FORECAST

The first month will be used to set up the office. Additionally, during the

first month I will be working hard on developing contracts. The secondmonth will see some activity, but it will not be until month six when

business will be picking up at a higher rate. Sales will continue to grow

through year three.



Financial Statements:

NOTE:

It is the total income EHRC earned during the year for doing the business activity

Cash that will be subtracted from the balance sheet the business won't have to pay this to anyone.

It will be zero as the company is a new start and inventories will be zero.No account statement for last year so there won't be any decrease in accounts receivable,

same as above

No bank loans so zero

Cash you will hold on 31 st December 2011 after successful completion of business.

Net income $20,000.00

Depreciation and Amortization $1,600.00Decrease (increase) in Inventories $0.00

Decrease (increase) in Accounts Receivable $0.00

Increase (decrease) in Accounts Payable $0.00

Cash flows from Operations $21,600.00

Capital Expenditures $0.00

Cash flows from Investing $0.00

Increase in bank loans $0.00

Increase in long term debt $0.00

Increase in preferred stock $0.00

Increase in common stock $0.00

Increase in paid in capital $0.00

Dividends paid $0.00

Cash flows from Financing $0.00

Net increase in cash and cash equivalents $21,600.00

Cash at beginning of year $0.00

Cash at end of year $21,600.00

Cash Flow StatementFor : January 1 - December 31, 201



NOTE:

ccording to the analysis and estimation yielded form the market and the figures

of business it can be said that the break-even will be reached in 2 yrs.

2011

Revenues:

Net ¡ ales ¢ 5£ ¤ £ £ £

.£ £

Other income¢ £

.£ £

¢ 5£ ¤ £ £ £

.£ £

Cost and expenses:

¥ ost of sales ¢ 8¤ £ £ £

.£ £

¡ elling

¤ general and administrative e

¦ §

ense¨ ¡

G&© ¢

4¤ £ £ £

.£ £

esearch and

evelo

§ ment

¢ ¤ £ £ £

.£ £

e§ reciation and © morti ation ¢ 2¤ 4£ £

.£ £

Operating income¢

2¤ £ £

.£ £

Interest

nterest e

¦ §

ense¢ £

.£ £

nterest income ¢ £ .£ £

Net nterest

¢ £

.£ £

Income from continuing operation before income taxes¢

2¤ £ £

.£ £

Provision for income taxes @ 30%

¥ urrent ¢ 9¤ 78£ .£ £

eferred¢ £

.£ £

Total¢ 9

¤ 78

£ .

£ £

Income from continuing operations¢

22¤

82£

.£ £

Income from discontinued operation, net of tax¢ £

.£ £

Net income ¢ 22

¤ 82

£ .

£ £

Weighted average number of common shares

Basic 8£ £ £ £

Basic net income per common share: Earning Per Share

ncome from continuing o

§ erations

¢ £

.29

ncome from discontinued o

§ eration

¢ £

.£ £

Basic net income per common share¢ £

.29

Eminent uman esources tatement of ncomeProjected Income Statement For the Year 2011



M

T HUMA ! OU " !

# ALA$ % &

'

H& &

T

A( o) 0 1 ( 2

D3 4 3

m5

3 6

7

8 1 1

A ( ( 3 2 (

Cash and cash equivalents 9 3,00

@ ccounts receivable

Deferred income taxes

Other current assets

Total current assets9

3,00

A roperty

Equipment9

12,00

B oodwill

Intangible assets9 C

,00

Other assets9

1,00

To2 aD

a ( ( 3 2 ( $7

8 E 8 8

LF

a5

F D

F

2

F

3 (

@ ccounts payable 9 2,00

@ ccrued expenses 9 2,00

G hort-term debt

Current portion of long-term

debt

Total current liabilities9 C

,00

Other long-term liabilities

Total liabilities9 C

,00'

H

a6 3

H

o

D

d3 6 (

' 3

qI

F

2

yOwner's Equity 9 1 P ,00

Retained Earnings

TotalG hareholders'

Equity

9 1

P ,00

To2 aD

LF

a5

F

D

F

2

F

3 ( &

'

H

a6 3

H

oD

d3 6

' ( & qI

F

2 y=$ &

T Q ORTH $7

8 E 8 8

NOTE:

Cash and cash equivalent means cash in hand to carry out day to day business activities

It will be zero as this is a new start up, deferred tax liabilities will be zero

Cost taken for all the equipment listed in the requirement for setting up office likecomputer, router, fax machine &copier etc

Goodwill is zero as this is first year and goodwill will be built in coming subsequent

coming years

I own 100% stock of the company therefore, as the sole proprietor I have raised 80000shares at twenty cents per share



Two desks, two chairs, and two lockable file cabinets.

Two computer systems including a cd-rw, printer and a third computer to serve as aserver.

DSL router and DSL connections.

Two telephones fax machine, and copier.

COMPETITIVE EDGE

Eminent Human resources competitive edge is their flexibility for

compensation. Most or all other companies require compensation to be in

the form of cash. Eminent Human resources is able to take stock options in

lieu of some cash. While Eminent Human resources needs some cash to

float the business, it can take up to 75% of its fees in equity. Eminent

Human resources is able to do this because they have secured an office space

that is low in cost, helping them reduce their overhead and also the dual

functioning if EHRC enables it provide jobs to people, and people for jobs at

a very low cost thereby retaining higher profits

(Please note the the HR industry, unlike law firms and accounting firms do

not run into conflict of interests situations regarding receiving equity as

compensation.)

EXIT STRATEGY

The exit strategy will be adopted when the business faces loss below its

break-even point.

It can be identified when companies stop hiring and cease to outsourcetheir HR operations.

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