L-1 Beneficiary: John Johnson Phone: +123 123 123 123 E-mail: [email protected] L-1 VISA Business Plan EXTERIOR SIGNS AND SYSTEMS LLC
EXTERIOR SIGNS AND SYSTEMS LLC 2 BUSINESS PLAN THIS IS A SAMPLE BUSINESS PLAN This file was created by redacting an actual business plan The Plan Writers wrote for a client. All client information and proprietary content has been removed. As such, the business model, managers and financial pro forma herein are entirely theoretical – only the structure of the plan itself and portions of the market and industry research remain “real”. www.planwriters.net 800-691-6202
EXTERIOR SIGNS AND SYSTEMS LLC 3 BUSINESS PLAN P r o v i d e This document contains confidential information proprietary to EXTERIOR SIGNS AND SYSTEMS LLC. This information and related conversations are submitted solely for the purpose of introducing selected parties to the Company’s Business Plan. The Company’s disclosure of information contained herein and in related conversations does not constitute any subscription or authorization to use the information, ideas, or concepts presented, or to disclose any information to other parties. The Company retains ownership of this Plan, and the concepts and ideas described herein. Each recipient of this document agrees to treat it in a strictly confidential manner. The recipient may not disclose, directly or indirectly, or permit any agent or affiliate to disclose any of the information contained herein, or reproduce this document in whole or part without the prior written consent of the Company. Any party who accepts delivery of this Plan or any other document or verbal communication of confidential information from the Company agrees to be bound by the terms of this Confidentiality Statement and further agrees to promptly return documents to the Company upon request. Provide distribution and sales support for the products (sign systems) of the parent company, The Advertising Company Support the parent company (The Advertising Company) in acquiring a large market share of the U.S. signs and displays industry by providing exceptional customer care in pre- and after-sales processes and continuously enlarging the number of clients. CONFIDENTIALITY STATEMENT MISSION STATEMENT VISION
EXTERIOR SIGNS AND SYSTEMS LLC 4 BUSINESS PLAN CONTENTS CONFIDENTIALITY STATEMENT ................................................................................................................... 3 MISSION STATEMENT ................................................................................................................................. 3 VISION ........................................................................................................................................................ 3 EXECUTIVE SUMMARY ................................................................................................................................ 5 Short-term Growth Strategy............................................................................................................................. 5 Target Market .................................................................................................................................................. 5 Business Model ............................................................................................................................................... 5 Company Overview .......................................................................................................................................... 5 L-1 Beneficiary ................................................................................................................................................. 5 Competitors ..................................................................................................................................................... 6 Marketing Plan................................................................................................................................................. 6 Financial Summary.......................................................................................................................................... 6 Objectives ........................................................................................................................................................ 6 THE FOREIGN ENTITY ................................................................................................................................. 7 EXTERIOR SIGNS AND SYSTEMS LLC .......................................................................................................... 8 Company Description ...................................................................................................................................... 8 Products & Services ........................................................................................................................................ 9 Company Structure and Ownership................................................................................................................ 9 Business Goals ................................................................................................................................................ 9 Timetable (Year 1) .........................................................................................................................................10 STARTUP SUMMARY ................................................................................................................................. 11 L-1 BENEFICIARY ...................................................................................................................................... 12 PERSONNEL ............................................................................................................................................. 14 PERSONNEL FORECAST ............................................................................................................................ 15 Organizational Chart......................................................................................................................................16 INDUSTRY ANALYSIS ................................................................................................................................ 17 Demand Determinants..................................................................................................................................20 COMPETITIVE ANALYSIS ........................................................................................................................... 21 COMPETITIVE ADVANTAGES ...................................................................................................................... 22 MARKETING ............................................................................................................................................. 23 Target Market ................................................................................................................................................23 Marketing Objectives.....................................................................................................................................23 Marketing Campaign .....................................................................................................................................24 Website ..........................................................................................................................................................23 Social Media ..................................................................................................................................................23 Word of Mouth ...............................................................................................................................................23 Business Networking.....................................................................................................................................23 Trade Shows ..................................................................................................................................................23 Printed Material.............................................................................................................................................23 Press ..............................................................................................................................................................23 Samples .........................................................................................................................................................23 SWOT ANALYSIS ....................................................................................................................................... 25 REVENUE FORECAST ................................................................................................................................ 26 BREAK-EVEN ANALYSIS ............................................................................................................................ 27 PROJECTED INCOME STATEMENT ............................................................................................................. 28 ROJECTED CASH FLOW ............................................................................................................................. 29 PROJECTED BALANCE SHEET ................................................................................................................... 30
EXTERIOR SIGNS AND SYSTEMS LLC 5 BUSINESS PLAN EXTERIOR SIGNS AND SYSTEMS LLC, hereinafter also referred to as ‘the Company’, ‘Sign Systems and Supplies’, and ‘the US entity’, specializes in the sale of signs and displays manufactured by its parent company in Jordan. EXTERIOR SIGNS AND SYSTEMS is a subsidiary of the Amman-based company, and Partners Co. Advertising Company, also referred to herein as ‘the foreign entity’. John Johnson has education and experience that prepared him well to successfully manage EXTERIOR SIGNS AND SYSTEMS LLC as its General Manager. Mr. Johnson is well acquainted with the parent company’s products and customers’ needs and he will ensure an efficient sales process for the parent company’s products in the U.S. The Company will offer exceptional pre-sale and after-sale support to ensure customer satisfaction. Upon approval of an L-1 visa, the Company will hire John Johnson as the General Manager. The Company will have ten employees by year 5. The foreign entity owns 100% of EXTERIOR SIGNS AND SYSTEMS LLC. The parent company has invested $123,330 to support the operations of the U.S. entity. Short-term Growth Strategy In the first years of operations, EXTERIOR SIGNS AND SYSTEMS LLC anticipates increasing brand visibility and building relationships with prospective clients that have the potential to become long-term partnerships. Target Market EXTERIOR SIGNS AND SYSTEMS LLC targets sign makers, display and exhibition stands manufacturers and businesses that need sign systems. Business Model EXTERIOR SIGNS AND SYSTEMS LLC supports sales of the foreign entity by selling its sign systems. The Company sells products manufactured by the foreign entity through its website and sales team. The parent company will send the sign systems produced in Jordan in the form of aluminum profiles, accessories and plastic parts. These systems are semi-finished and will be cut to size and assembled in the U.S. The prices very extensively and they can start at a few hundred dollars for small businesses and go to tens of thousands of dollars for larger entities, such as hospitals or hotels. Company Overview EXTERIOR SIGNS AND SYSTEMS LLC was registered in 2018 in Kansas. The Company will be located in Shawnee, Kansas. L-1 Beneficiary John Johnson is result oriented, with an excellent record of achievements, proven skills in managing people in the most productive way, and expertise in the international sign systems market. He is well prepared to take the role of General Manager of the U.S. entity, as he knows the needs of the parent company and has extensive managerial skills that will ensure growth for both the U.S. and foreign entities. EXECUTIVE SUMMARY
EXTERIOR SIGNS AND SYSTEMS LLC 6 BUSINESS PLAN Competitors EXTERIOR SIGNS AND SYSTEMS LLC sells products from its well-established parent company and it competes with other companies manufacturing and selling sign system products, such as Competitor #1, Competitor #2, Competitor #3. Exceptional customer support, in addition to high-quality products, will ensure the Company acquires a large share of the U.S. market. Marketing Plan EXTERIOR SIGNS AND SYSTEMS LLC will have a website (www.samplesite.us) optimized to be highly ranked in Google search. In order to increase its visibility, the Company will use social media to promote its services. The Company will also rely on word of mouth and recommendations. EXTERIOR SIGNS AND SYSTEMS will participate in trade shows and use every opportunity to network. The Company will carefully listen to customers’ needs and strive to make its clients fully satisfied. Financial Summary EXTERIOR SIGNS AND SYSTEMS LLC’s financial model shows consistent growth for the brand over the next five years. Plans call for the Company to achieve over a million in annual gross revenue, with a net profit of $123,123 in year five. The following graph illustrates the financial goals of EXTERIOR SIGNS AND SYSTEMS LLC within the next five years. Objectives The purpose of this plan is to provide USCIS with the information necessary to evaluate the scope and future growth of EXTERIOR SIGNS AND SYSTEMS LLC in the marketplace. In addition to serving as a roadmap for management, the plan will show that: A significant market opportunity exists when analyzing current market demands and competitive landscape. The parent company, The Advertising Company, has invested $123,123 to support the Company’s operations. The correct capital structure will allow for a long-lasting, profitable business. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue $410,000 $550,000 $690,000 $840,000 $1,020,000 Gross Margin $205,000 $275,000 $345,000 $420,000 $510,000 Net Profit ($11,771) ($16,033) $27,603 $74,605 $132,846 Highlights Revenue Gross Margin Net Profit
EXTERIOR SIGNS AND SYSTEMS LLC 7 BUSINESS PLAN The Advertising Company The Advertising Company (www.sample.com) was founded in Amman in 1979. In more than 35 years it has been transformed from a small advertising office, into a specialized sign designer and manufacturer. The Advertising Company specializes in the design, manufacture and installation of signs and exhibition stands. Having more than 71 qualified employees, the company supplies hundreds of diversified projects, including major architectural projects and international hotels throughout the Middle East. The company is up to date with market and industry trends and participates at major sign events in the world. Its sign systems products were recognized by many industry leaders and displayed in Orlando U.S. at the largest specialized sign exhibition in the world, held by International Sign Association. Among its products and services are the following: The quality of the company’s products ensures its longevity, while the provision of comprehensive and proactive pre-sale and after-sales services plays a pivotal role in guaranteeing and maintaining excellent customer service and overall customer satisfaction. In 2002, The Advertising Company opened a new branch in, Qatar to serve the increasing demand in the Arabian Gulf Area. Recently, the Company has obtained the ISO 9001 certification. THE FOREIGN ENTITY Complete sign scheduling, specification, and design service for architectural projects. This chargeable service takes into consideration the improvement of way-finding and enhancing corporate identity. Manufacturing and Marketing Signs: manufacturing high quality and international standard signs with different sign systems, materials and state of the art technologies (CNC router machines, laser cutting and engraving, large-format digital printing, etc.) Electronic Signs: a complete system for convention centers, conference rooms, moving messages, currency exchange rates, electronic queuing systems, etc. Booths and Exhibition Systems: The company is specialized in providing different solutions to its customers, to present their corporate identity and send the company message to its customers by developing different 3D designs, including all kinds of floors, furniture, branding, audio and visual equipment. The company also provides LED Systems with different lighting set-ups and all colors.
EXTERIOR SIGNS AND SYSTEMS LLC 8 BUSINESS PLAN Company Description EXTERIOR SIGNSS AND SYSTEMS will import and sell sign system products manufactured by its parent company, The Advertising Company. The foreign entity will send the sign systems produced in Jordan in the form of aluminum profiles, accessories and plastic parts. Semi-manufactured products will be cut to size and assembled in the U.S. entity. The Company will promote and sell the sign systems to sign makers and businesses in the U.S. The sign makers will install the system with the graphics. The Company will provide stylish, modern, clean-look, modular sign systems. Its range includes indoor, outdoor, illuminated or non-illuminated, flat and curved systems. The products the Company will sell are comprehensive, employing a wide range of materials and techniques of production. Its products are made of quality environmentally friendly materials like aluminum, acrylic, polycarbonate, and ABS. The Company will offer all fixing options; door, wall, name plates, directories, free occupied, suspended, projected, desk-stand, pylons (free standing), and paper flex. Products are compatible with most types of braille and tactile text. A wide range of standard and custom sizes are available. Products are simple to use, assemble, and install. EXTERIOR SIGNSS AND SYSTEMS LLC
EXTERIOR SIGNS AND SYSTEMS LLC 9 BUSINESS PLAN EXTERIOR SIGNSS AND SYSTEMS LLC highly values professionalism, timeliness, and client experience. The U.S. Company strives to reduce distribution costs and ensure timely delivery of quality products and services. The Company will benefit from the L-1 Beneficiary’s background and knowledge of the industry. As Mr. Johnson is the General Manager of the parent company, he will be able to implement successful business strategies in line with The Advertising Company’s philosophy, understanding fully its needs. Mr. Johnson has made connections with prospective partners in the U.S. and he is capable of negotiating deals that promote the growth of EXTERIOR SIGNSS AND SYSTEMS LLC and its parent company. The Company will focus on the U.S. market but the scope will be global. The U.S. entity will constantly work on further developing relationships with clients throughout the U.S., which will result in greater revenues for the parent company. In addition, the Company may start making products in the U.S. in future and exporting them to the Middle East and other parts of the world where there is a preference for U.S.-made products. The Company will also be able to send materials from the U.S. to its parent company in Jordan. EXTERIOR SIGNSS AND SYSTEMS is committed to the future development of The Advertising Company. With its efforts, the Company will facilitate operations of the foreign entity and bring even greater success to The Advertising Company. The parent company can rely on the U.S. entity, knowing Mr. Johnson’s competence in the core business, products, and market. Products & Services The Company will distribute and sell a wide range of sign system products. The products serve various industries, including medical, hospitality, and retail businesses. The Company will provide pre- and after-sale customer support. Company Structure and Ownership EXTERIOR SIGNSS AND SYSTEMS LLC was formed in 2018 in Kansas as a Limited Liability Company. The Advertising Company owns 100% of EXTERIOR SIGNSS AND SYSTEMS LLC. Business Goals Short-term Goals (within one year) Intermediate-term Goals (2-3 years): Long-term Goals (within five years): • Hire the General Manager upon issuance of an L-1 visa • Gain visibility among sign makers and other businesses in need of sign systems • Maintain high-quality customer service at every stage of operations • Achieve revenues of $410,000 • Acquire new clients, in addition to keeping the existing ones • Hire four employees (two Sales Representatives and two Fabrication Staff) • Achieve revenues of $690,000 in year 3 • Achieve profit of approximately $27,600 in year 3 • Grow revenue to $1,020,000 in year 5 • Grow profit to approximately $133,000 in year 5 • Become recognized as a reliable partner among sign system distributors
EXTERIOR SIGNS AND SYSTEMS LLC 10 BUSINESS PLAN Timetable (Year 1) Month Action M1 Hire the General Manager and staff to start operations of the Company M2 Create overall sales and marketing strategy M3 Implement a marketing campaign to increase brand awareness M4 Exhibit at ISA Show in Orlando and establish new customer base M5 Analyze trade show data M6 Follow up with exhibition visitors M7 Conduct six months evaluation of sales performance and prepare improvement strategies M8 Send newsletter and contact prospective customers M9 Create engaging content on social media M10 Follow up existing customers M11 Create a marketing plan for year 2 M12 Review operations together with the Jordanian entity and plan an operational strategy for year 2
EXTERIOR SIGNS AND SYSTEMS LLC 11 BUSINESS PLAN Start-up funding includes all the expenditures, both start-up assets, and start-up expenses, incurred before the Company starts earning revenue. The parent company has invested $123,123 to support the operations of the Company. As depicted in the table, $123,123 is used for start-up expenses and the remaining $123,123 is working capital. The investment risk is minimal based on the existing market demand within the industry. EXTERIOR SIGNSS AND SYSTEMS LLC’s financial model shows consistent growth for the brand over the next five years. STARTUP SUMMARY Use of Start-up Funding Expenses Legal and business fees $123,123 Website Development $123,123 Miscellaneous $123,123 Total Start-up Expenses $123,123 Short-Term Assets Working Capital $123,123 Total Short-Term Assets $123,123 Total Expenses & Assets Total Start-up Expenses $123,123 Total Start-up Assets $123,123 Total Funding Requirements $123,123
EXTERIOR SIGNS AND SYSTEMS LLC 12 BUSINESS PLAN John Johnson is a Partner and the General Manager of SIGNS Systems and Supplies’ parent company, The Advertising Company. Upon issuance of his visa, he will become the General Manager of the U.S. entity. Mr. Johnson has extensive international experience and managerial skills that he will employ in the U.S. entity. EDUCATION: • Bachelor’s Degree in Economics and Accounting, Jordan University, 1992 EXPERIENCE: The Advertising Company, Jordan • Since 2013, Partner and General Manager • 1992 – 2013 Partner and Deputy General Manager AREAS OF EXPERTISE: • Advertisements in newspapers and other media • Way-finding system design • Sign manufacturing techniques • Sign design concepts • Project management and coordination • Modular exhibition systems techniques • Aluminum profile concept design for signs and exhibitions TRADE SHOWS: • Mr. Johnson has visited numerous sign exhibitions and trade shows in Germany, UK, China, Denmark, and exhibited at trade shows in Orlando, U.S., Dubai, UAE, and Amman, Jordan L-1 BENEFICIARY
EXTERIOR SIGNS AND SYSTEMS LLC 13 BUSINESS PLAN The main duties of Mr. Johnson within EXTERIOR SIGNS AND SYSTEMS will be: Duties % Time Creating, communicating, and implementing the organization's vision, mission, and overall direction to ensure it is consistent with values of the parent company 5% Planning and developing short and long-term goals and objectives in order to maintain steady annual growth 8% Attending relevant trade shows and conferences, such as ISA Sign Expo in Orlando, and remaining up to date with market trends 4% Motivating and assisting the team in the U.S. in raising overall performance 8% Developing new markets and formulating new cooperation models with new vendor partners in order to improve sales performance 8% Providing training for the Company’s team, ensuring that all divisions in the Company operate smoothly 6% Evaluating performance of employees, taking corrective measures if needed and praising employees when they achieve the desired results 6% Maintaining compensation plans and performance incentives for employees 5% Paying close attention to operations and market trends, analyzing problematic situations and occurrences, and providing solutions to ensure the Company’s growth 11% Networking and establishing long-term relationships with key clients 8% Preparing budgets and reviewing financial and non-financial reports to devise solutions or improvements and ensuring expenditures are maintained within the budget 9% Performing SWOT analysis to mitigate any potential risks through industry and market changes and potential growth opportunities 7% Ensuring high levels of customer service to match the high quality of the Company’s products 8% Conducting periodic reviews of the U.S. operations with the Jordanian team 7%
EXTERIOR SIGNS AND SYSTEMS LLC 14 BUSINESS PLAN Core to the successful management of the business is the hiring of the following personnel: Position Main Duties and Time Allocation (%) Educational Requirements SALES & MARKETING MANAGER • Identify potential clients 20% • Inform potential clients about products offered 10% • Close sales 10% • Build customer relationships 10% • Review sales records and take corrective measures as needed 10% • Research consumer trends and habits 10% • Create and implement sales & marketing campaigns 20% • Analyze marketing data 10% Bachelor’s degree or higher SALES REPRESENTATIVES • Work on continuously improving sales by creating (together with the Sales & Marketing Manager) and implementing sales strategies to ensure the Company hits sales target 5% • Plan and develop short- and long-term goals and objectives with the Sales & Marketing Manager in order to maintain steady annual growth 5% • Contact regular and prospective clients to explain the product, answer questions, and quote prices 25% • Establish long-term relationships with customers 5% • Provide exceptional pre- and post-sales customer care 15% • Inform potential clients on sales conditions and pricing 15% • Close the sales 10% • Help the Company’s revenues grow by nurturing and enhancing relationships with clients, as well as developing relationships with new clients 20% High-school diploma minimum, bachelor’s degree preferable FABRICATION STAFF • Inspect all the parts received from the foreign entity 15% • Cut parts to right size 25% • Assemble the sign systems 50% • Prepare sign systems to be shipped to clients 10% High-school diploma PERSONNEL
EXTERIOR SIGNS AND SYSTEMS LLC 15 BUSINESS PLAN EXTERIOR SIGNS AND SYSTEMS LLC will be under the leadership of John Johnson as the Company’s General Manager. The Company will have four employees in year 1 and 10 in year 5. The following table details the personnel forecast in the following five years: Personnel Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Management Count General Manager 1 1 1 1 1 Sales & Marketing Manager 1 1 1 1 1 Sales Representatives 1 2 3 4 5 Fabrication Staff 1 2 3 3 3 Total Number 4 6 8 9 10 Management Salary General Manager $11,111 $11,111 $11,111 $11,111 $11,111 Sales & Marketing Manager $11,111 $11,111 $11,111 $11,111 $11,111 Sales Representatives $11,111 $11,111 $11,111 $11,111 $11,111 Fabrication Staff $11,111 $11,111 $11,111 $11,111 $11,111 Management Cost General Manager $11,111 $11,111 $11,111 $11,111 $11,111 Sales & Marketing Manager $11,111 $11,111 $11,111 $11,111 $11,111 Sales Representatives $11,111 $11,111 $11,111 $11,111 $11,111 Fabrication Staff $11,111 $11,111 $11,111 $11,111 $11,111 Total Payroll $11,111 $11,111 $11,111 $11,111 $11,111 4 6 8 9 10 0 2 4 6 8 10 12 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Number of Employees per Year PERSONNEL FORECAST
EXTERIOR SIGNS AND SYSTEMS LLC 16 BUSINESS PLAN Organizational Chart The following organizational chart presents the organizational structure of the Company. All positions will be there from year 1. The number of Fabrication Staff will increase from one to three by Year 3, and the number of Sales Representatives will increase from one to five by Year 5. YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Personnel Cost per Year G E N E R AL M A N A G E R F A B R ICAT ION S T A F F S A L E S & M A R K E TING M A N A G E R S A L E S R E PR E S E NTA TIV E
EXTERIOR SIGNS AND SYSTEMS LLC 17 BUSINESS PLAN Over the five years to 2019, growth in advertising expenditure and an uptick in business formation have increased demand for the Billboard and Sign Manufacturing industry1. As online media has challenged many traditional alternatives to billboards, such as newspapers and magazines, advertisers have continued to value industry products as a way to reach mass audiences in an increasingly fragmented media landscape. Nonresidential construction spending has also risen over the past five years, boosting demand for general signage from commercial, public and institutional facilities. As a result, industry revenue is expected to increase an annualized 2.5% over the five years to 2019, including projected growth of 1.5% to $16.7 billion over 2019 alone. Digital billboards have emerged as a potential growth area for the industry. Since these displays make it easier for customers to transition between advertisements, they sell at higher prices. This has lifted industry profit, defined as earnings before interest and taxes, especially as technological improvements have reduced the cost of light-emitting diodes (LEDs) and other electronic components. However, the complexity of designing, assembling and servicing digital billboards has also increased the industry's need for skilled labor, and thus raised its wage costs. Over the five years to 2024, digital billboards are expected to remain the most-significant driver of industry growth, despite increased regulatory attention at the local level regarding potential quality-of-life and safety issues these products present. Over the five years to 2024, industry revenue is expected to continue growing at an annualized rate of 1.1% to reach $17.6 billion. Total advertising expenditure is anticipated to continue growing during the five-year period. The simultaneous decline of competing advertising formats, such as newspapers and TV, will likely cement the industry's products as a key component of downstream advertising campaigns. Moreover, continued growth in business formation and nonresidential construction will increase the size of the industry's potential market, sustaining demand and encouraging the entrance of new sign manufacturing companies. 1 (2019) Billboard and Sign Manufacturing, Industry Report, IBISWorld, www.ibisworld.com INDUSTRY ANALYSIS
EXTERIOR SIGNS AND SYSTEMS LLC 18 BUSINESS PLAN 43.70% 41.90% 14.40% Products and services and segmentation (2019) Traditional billboards and signs Digital billboards and signs Other Digital billboards and signs Products & Services Sales of traditional billboards and signs are estimated to account for 43.7% of Billboard and Sign Manufacturing industry revenue. Billboards are manufactured in a variety of standard sizes, including 14-by-48-foot bulletins and “posters” with dimensions of 10 feet by 40 feet or 10.5 feet by 36 feet. Although these designs are the most common across the industry, manufacturers typically offer their own range of additional sizes, and many offer billboards with custom dimensions. This segment includes nonelectric signs of all sizes, including three-dimensional billboards, trade show exhibits and storefront signage purchased by most brickand-mortar businesses. It does not, however, include signs and displays made from paper or paperboard, which are classified under the Printing industry (IBISWorld report 32311). Over the past five years, this segment has expanded due to growth in advertising spending and business formation, but has remained a relatively constant share of overall industry revenue. Digital billboards and signs are expected to be the fastest-growing product segment for this industry, accounting for an estimated 41.9% of revenue. Digital technology incorporates LEDs, plasma display panels or projection screens into billboards and advertising displays. Digital signage can enhance a customer's retail experience through interactive interfaces, and the information displayed is computer-programmed and can be changed instantly. Advertisers particularly value electronic displays because several advertising messages can be loaded into a computer and rotated every several seconds on one digital board. Additionally, different messages can be conveyed at different times, such as coffee advertisements in the morning and liquor advertisements on Friday nights. Advertisers prefer these features because they can sell multiple advertising slots on the same billboard or on the same display. Conversely, advertisers can only sell one ad space at a time using traditional billboards and displays. The electronic segment also includes big-money items such as scoreboards and other large video displays used at major collegiate and professional sporting and entertainment venues. For example, industry leader Daktronics Inc. produces video display systems capable of producing more than 4.0 trillion colors and costing in excess of $10.0 million. The electronic billboard and displays segment is estimated to have risen relatively quickly over the past five years as production has become more efficient and because of the advantages these products provide to advertisers. Traditional billboards and signs
EXTERIOR SIGNS AND SYSTEMS LLC 19 BUSINESS PLAN Other products manufactured by this industry include neon signs, countertop displays and removable letters for marquee and sidewalk signs. These products have declined as a share of revenue over the past five years due to gains in digital display manufacturing. Neon signs, for example, have increasingly been replaced with LED technology. In addition, digital displays on which varying messages can be displayed easily through computer software have reduced demand for signs with changeable letters, which can be time-consuming to update. Over the next five years, this segment is expected to continue declining as a share of industry revenue as demand for the industry's core billboard and digital signage offerings increases. Major Markets Retail and food services Retailers, accommodation and food services is the largest market for Billboard and Sign Manufacturing industry products. Similar to most other physical businesses, retailers and restaurants require general signage to publicize their services to potential customers. In addition, restaurants tend to purchase more signage than businesses engaged in other industries, since they often list menu items alongside photographs or additional descriptions. The rise of fast-casual dining has likely driven some expansion in this market, since these establishments tend to rely more heavily on signage to convey information to customers than single-location full-service eateries. Retailers are also a substantial market for industry services. Retail establishments tend to locate in proximity to other businesses in high-traffic areas, so signage can be important in advertising their products and driving potential customers to their stores in a competitive environment. Most retailers require fairly simple, traditional industry products. In addition, the industry manufactures some point-ofpurchase displays frequently used by retailers to promote products in-store. Combined, retail and food services are expected to generate 42.2% of industry revenue. 42.20% 20.80% 18.50% 18.50% Major market segmentation (2019) Retail and food services Other Corporate and trade shows Outdoor advertising and transportation Other
EXTERIOR SIGNS AND SYSTEMS LLC 20 BUSINESS PLAN Outdoor advertising and transportation Outdoor advertising agencies purchase industry products for the purpose of renting out display space for other businesses' marketing efforts. Products sold to this market include billboards, which cost tens of thousands of dollars and require significant manufacturing capabilities to produce. Advertising agencies are increasingly purchasing digital billboards, which enable agencies to toggle advertiser messages and generate greater revenue per individual billboard. This segment also includes transit agencies, which purchase a great deal of digital signage for use in conveying timely information such as weather advisories and departure times. Government agencies, particularly in major cities, may also purchase larger billboards to publicize public service announcements or rent display space to advertisers. This segment is estimated to account for 18.5% of industry revenue. Corporate and trade shows The corporate and trade shows segment includes signage related to commercial office buildings, in addition to displays and exhibits produced for corporate conferences. This segment moves partly in line with nonresidential construction; the construction of new office space goes hand-in-hand with demand for signage for that space, which is usually a one-time expense. Corporate conferences are a steadier market, though are still somewhat cyclical, in that they tend to be a discretionary business expense afforded in growth periods. In 2019, this segment is anticipated to account for 18.5% of industry revenue. Other Other markets for industry products are expected to generate the remaining 20.8% of revenue. This segment includes exports, which account for only a small share of revenue given the bulky nature of industry products and the constraints that puts on international trade. The industry's miscellaneous segment is large because signage is demanded by a wide array of businesses and special events, but no other markets are expected to account for a significant share of revenue. Demand Determinants Demand for the Billboard and Sign Manufacturing industry is determined primarily by business spending on advertising and promotional activity. Advertising budgets are in turn influenced by levels of corporate profit. Companies are more likely to invest in rebranding or new marketing campaigns when they have healthy profit margins. Conversely, when margins are tight, advertising is often among the most discretionary and earliest expenses to be cut in efforts to preserve profit. As overall corporate profit in the United States has increased over the past five years, total advertising spending has grown strongly, fueling demand for industry products. The media landscape has become increasingly fragmented, with Americans consuming media from an ever more diverse range of sources. Although the internet has thus enabled advertisers to target consumers with greater demographic specificity, billboards and outdoor signs are now one of the few remaining ways to reach a large general audience, helping to sustain downstream demand for industry products. In addition to selling signage to downstream markets through advertising agencies, industry operators market their products directly to businesses in a variety of industries. Most brick-and-mortar businesses require signs to some extent, so rates of business formation have a significant impact on industry demand. As a result, the industry is highly cyclical; macroeconomic factors such as business sentiment, access to credit and consumer spending influence the number of US businesses, which in turn determines the size of the industry's market.
EXTERIOR SIGNS AND SYSTEMS LLC 21 BUSINESS PLAN EXTERIOR SIGNS AND SYSTEMSwill compete with major operators of the industry with the goal of becoming the leading industry player in the U.S., as the parent company is a well-established entity with high-quality products. The following are some of Sign Systems and Supplies’ competitors: COMPETITOR # 1 | www. Competitor1.com APCO has been providing sign solutions in the US and throughout the world for over 50 years, with a proven record of managing the most complex of projects. Design and innovation have been at the core of APCO's business since 1966. With an unprecedented 10 awards for Product Design Excellence as presented by the Industrial Designer's Society of America, APCO continues to offer the broadest range of innovative sign solutions in the industry. All APCO products are built to last, easy to maintain and backed by written warranties. APCO is proud to be an environmentally conscious company, having developed a range of modular products & manufacturing processes that help to reduce waste, energy consumption and the negative impact upon our environment, without compromising design or durability. COMPETITOR # 2 | www.competitor2.com In 2013 prominent sign systems wholesale supplier on the world market expanded its presence to the American market with their American owned and operated; America. incredibly flexible sign systems provide cost-effective sign production of both standard and custom signs, for indoor and outdoor signage. The company’s wide range of extrusions enable creative sign production. Its diverse sign systems feature solutions for replaceable inserts, sign rows and sign panels, to provide easy and accessible update of sign information. The suite includes seven different designs with their own unique features to meet all customers’ requirements of functionality, as well as providing a plethora of design possibilities. COMPETITOR # 3 | www. competitor3.com Competitor # 3 is the among the world’s most popular brands of wayfinding signage systems. In 1995, they were the first to combine modular aluminum signs with digital printing. Today, Competitor # 3 has grown into a group of companies spread across nine countries on five continents. Their product lines are regularly sold in 112 countries to over 14,000 active customers– 4,000 of whom are members of Competitor # 3’s prestigious Ambassadors Club. COMPETITOR # 4 | www. competitor4.com Competitor # 4 is an industry leading signage company developing comprehensive interior and exterior wayfinding systems for commercial and government clients. With more than 40 years of experience in planning, fabricating, installing and maintaining signage systems, Competitor # 4 has a proven history of successfully managing comprehensive signage projects for clients across the country. Competitor # 4 Sign Systems is dedicated to producing quality signage products, systems, and providing consultation. Competitor # 4 is among the pioneers in the wayfinding industry, with an extensive line of long-lasting, modular products that are designed and manufactured in the United States to the highest quality. COMPETITIVE ANALYSIS
EXTERIOR SIGNS AND SYSTEMS LLC 22 BUSINESS PLAN The primary competitive advantages of the Company upon entering the market are as below: ▪ Expertise of the L-1 Beneficiary Given Mr. Johnson’s broad international experience, he can easily connect and relate to both sign makers and businesses in need of the Company’s products and better understand their needs and preferences. The expertise of L-1 beneficiary, John Johnson, will be essential for the success of the Company as he knows the core business and operations of the foreign entity, and he has proven managerial skills. ▪ A Well-Established Parent Company The Advertising Company is a well-established business that has consistently increasing sales. Working with a well-regarded brand gives an advantage over businesses that are just starting. ▪ Synergy Created by United Efforts of the U.S. and Jordanian Entity The combination of a strong U.S. sales team and high-quality products manufactured by the foreign company will bring synergy in all their efforts. John Johnson will be able to provide the most suitable services for the needs of the parent company. The Company will enable the parent company to gain a larger market share by facilitating sales in the U.S. ▪ Having Contacts Within Key Markets The Company will benefit from its large network of contacts across various commercial and geographic markets. ▪ International Perspective EXTERIOR SIGNS AND SYSTEMS is a subsidiary of a global company and it will benefit from its international perspective. Instead of focusing on U.S. sales only, the Company will have a global orientation. ▪ Competitive Prices Since the Company sells products manufactured by its parent company, it is able to offer competitive prices. Keeping its pricing at competitive level will enable the Company to acquire a large number of customers and consequently generate more income. COMPETITIVE ADVANTAGES SUCESS International Perspective Expertise of the L-1 Beneficiary Competitive Prices A Well-Established Parent Company Having Contacts within Key Markets Synergy Created by United Efforts of the U.S. and Jordanian Entity
EXTERIOR SIGNS AND SYSTEMS LLC 23 BUSINESS PLAN Target Market The Company facilitates distribution and sales of the products manufactured by the parent company in Jordan, The Advertising Company. The Company targets sign makers and display and exhibition stands manufacturers, as well as businesses operating in various industries, such as food and hospitality, healthcare, etc. that need sign systems. EXTERIOR SIGNS AND SYSTEMS LLC puts effort into every step of the sales process to ensure high quality services. The Company strives to establish long-term relationships with clients and to build a reputation as a reliable partner. Marketing Objectives EXTERIOR SIGNS AND SYSTEMS LLC’s marketing objectives encompass the following: • Increase brand visibility • Remain attuned to the marketplace • Integrate new market trends to meet the needs of the end-users of the products MARKETING
EXTERIOR SIGNS AND SYSTEMS LLC 24 BUSINESS PLAN Marketing Campaign Website Word of Mouth Printed Materials Samples EXTERIOR SIGNS AND SYSTEMS LLC has a search engine optimized website (www.signsystems.us) with information about its products, prices, contact information, and an option to subscribe to newsletter. In addition to investing in traditional and digital marketing campaigns, the Company will rely on reputation, knowing that this is of the utmost importance within the industry. Sign Systems and Supplies’ dedication to exceeding customers’ expectations will bring recommendations that will bring new customers. EXTERIOR SIGNS AND SYSTEMS will print flyers, brochures, and other promotional material to distribute at conferences and trade shows. The material will promote the Company and its products. The Company will send samples of its products to major sign makers to make them see the quality offered by Sign Systems and Supplies. The Company will strive to attract as many clients as possible and to build longterm partnerships. Social Media Business Networking Trade Shows Press EXTERIOR SIGNS AND SYSTEMS LLC is aware of the importance of social media presence. The Company will use LinkedIn, Instagram, and Facebook to promote and build the identity of its brand. The Company will communicate updates and promotional offerings on its social media sites. An ever-expanding social media presence is crucial in the modern business environment. The focus on social media will help EXTERIOR SIGNS AND SYSTEMS LLC to increase the awareness and credibility of its brand and allow the Company to communicate directly with its prospective clients and better understand their needs. The information and feedback obtained from customers will help the Company continuously improve its services and consequently increase sales. Networking is one of the main marketing strategies for the Company. John Johnson will be proactive in promoting the Company’s services and building positive business relationships with prospective partners. Mr. Johnson will use every opportunity to network, bring exposure to the Company’s products, and develop new business opportunities. The Company will also join the International Sign Association. EXTERIOR SIGNS AND SYSTEMS will participate in industry-relevant trade shows presenting the Company and its products. Trade shows, such as ISA Sign Expo to be held in Orlando in April 2020 are an excellent opportunity to bring exposure to the Company, expand the business network, and develop new business opportunities. EXTERIOR SIGNS AND SYSTEMS will make sure to be marketed and appear in professional publications and magazines presenting new trends in the industry, such as Signs of the Times (www.signstimes.com). Gaining media coverage will have instant benefits for the Company as it will boost its visibility and credibility. Being present in the press lets customers know about the Company, what it offers, and how it differs from the competition
EXTERIOR SIGNS AND SYSTEMS LLC 25 BUSINESS PLAN S STRENGTHS ▪ Managerial experience and industry knowledge of L-1 Beneficiary ▪ Well-established parent Company and its support ▪ Competitive prices O OPPORTUNITIES ▪ Catering to various industries ▪ Bringing competitive advantage to its parent company by providing the sales team in the U.S. ▪ Establish a timely and effective information feedback channel, and keep abreast of the market dynamics ▪ Exporting U.S. materials to its parent company ▪ Exporting U.S. products to various international markets W WEAKNESS ▪ It will take some time to gain reputation and brand recognition in the U.S. market T THREAT ▪ Well-established industry players ▪ New industry entrants offering similar products at competitive prices The following is a listing of Sign Systems and Supplies’ key strengths and weaknesses, as well as the opportunities and threats that exist in the marketplace. SWOT ANALYSIS
EXTERIOR SIGNS AND SYSTEMS LLC 26 BUSINESS PLAN The following is a five-year revenue forecast. Direct costs include all costs that can be directly tied to revenue and include “cost of goods/services.” Revenue Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Order Value (average) Large Companies $22,123 $22,123 $22,123 $22,123 $22,123 Small Businesses $22,123 $22,123 $22,123 $22,123 $22,123 Number of Orders Large Companies 11 15 20 25 31 Small Businesses 8 10 9 9 9 Total Number of Orders 19 25 29 34 40 Revenue Large Companies $22,123 $22,123 $22,123 $22,123 $22,123 Small Businesses $22,123 $22,123 $22,123 $22,123 $22,123 Total Revenue $22,123 $22,123 $22,123 $22,123 $22,123 Direct Cost of Revenue Signs $22,123 $22,123 $22,123 $22,123 $22,123 Subtotal Cost of Revenue $22,123 $22,123 $22,123 $22,123 $22,123 The revenue forecast is based on management estimates. The Company plans to increase the number of orders from 19 to 40 by Year 5. The sales team will grow each year to support the sales efforts of the Company. The number of orders by small businesses will be similar every year (between 8 and 10), while the focus will be on clients with larger orders. The number of orders by large companies is expected to grow from 11 to 31 by Year 5. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue per Year REVENUE FORECAST
EXTERIOR SIGNS AND SYSTEMS LLC 27 BUSINESS PLAN The following break-even analysis shows the revenue necessary to break even in the first year of operation. Break-even is where revenue equals expenses. As shown below, the Company is expected to incur average monthly fixed costs of $22,123 in Year 1. To cover fixed and variable costs, which rise and fall with revenue, the Company must, on average, achieve revenue of $22,123 per month to break even. Year 1 Break-even Analysis Monthly Revenue Break-even $22,123 Assumptions: Average Percent Variable Cost 50% Estimated Monthly Fixed Cost $22,123 $0 $36,650 $73,300 Year 1 Break-even Analysis BREAK-EVEN ANALYSIS
EXTERIOR SIGNS AND SYSTEMS LLC 28 BUSINESS PLAN EXTERIOR SIGNS AND SYSTEMS LLC intends to deploy its funding to maximize growth and profitability. In the Income Statement table below, gross margin equals sales minus direct costs. The “bottom line” or profit (as measured before and after taxes and depreciation) equals gross margin minus operating expenses. Pro Forma Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Revenue $22,123 $22,123 $22,123 $22,123 $22,123 Cost of Revenue $22,123 $22,123 $22,123 $22,123 $22,123 Gross Margin $22,123 $22,123 $22,123 $22,123 $22,123 Gross Margin/Revenue 50% 50% 50% 50% 50% Expenses General, Sales & Administrative $22,123 $22,123 $22,123 $22,123 $22,123 Total Personnel $22,123 $22,123 $22,123 $22,123 $22,123 Payroll Taxes & Benefits $22,123 $22,123 $22,123 $22,123 $22,123 Total Operating Expenses $22,123 $22,123 $22,123 $22,123 $22,123 Profit Before Interest and Taxes $22,123 $22,123 $22,123 $22,123 $22,123 EBITDA $22,123 $22,123 $22,123 $22,123 $22,123 Taxes Incurred $22,123 $22,123 $22,123 $22,123 $22,123 Net Profit $22,123 $22,123 $22,123 $22,123 $22,123 Net Profit/Revenue -2.87% -2.92% 4.00% 8.88% 13.02% Year 1 Year 2 Year 3 Year 4 Year 5 Gross Margin PROJECTED INCOME STATEMENT
EXTERIOR SIGNS AND SYSTEMS LLC 29 BUSINESS PLAN The following depictions of EXTERIOR SIGNS AND SYSTEMS LLC’s projected cash flow show that the Company expects to maintain sufficient cash balances over the five years of this plan. The “pro forma cash flow” table differs from the “pro forma income statement” table. Pro forma cash flow is intended to represent the actual flow of cash in and out of EXTERIOR SIGNS AND SYSTEMS LLC In comparison, the revenue and expense projections on the income statement include “non-cash” items and exclude funding and investment illustrations. Pro Forma Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Cash Received Revenue $22,123 $22,123 $22,123 $22,123 $22,123 Subtotal Cash Received $22,123 $22,123 $22,123 $22,123 $22,123 Expenditures Expenditures from Operations Total Personnel $22,123 $22,123 $22,123 $22,123 $22,123 Bill Payments $22,123 $22,123 $22,123 $22,123 $22,123 Subtotal Spent on Operations $22,123 $22,123 $22,123 $22,123 $22,123 Subtotal Cash Spent $22,123 $22,123 $22,123 $22,123 $22,123 Net Cash Flow $22,123 $22,123 $22,123 $22,123 $22,123 Cash Balance $22,123 $22,123 $22,123 $22,123 $22,123 ROJECTED CASH FLOW
EXTERIOR SIGNS AND SYSTEMS LLC 30 BUSINESS PLAN A balance sheet is a snapshot of EXTERIOR SIGNS AND SYSTEMS LLC’s financial condition. Pro Forma Balance Sheet Year 1 Year 2 Year 3 Year 4 Year 5 Assets Current Assets Cash $22,123 $22,123 $22,123 $22,123 $22,123 Total Current Assets $22,123 $22,123 $22,123 $22,123 $22,123 Total Assets $22,123 $22,123 $22,123 $22,123 $22,123 Capital Paid-in Capital $22,123 $22,123 $22,123 $22,123 $22,123 Retained Earnings $22,123 $22,123 $22,123 $22,123 $22,123 Earnings $22,123 $22,123 $22,123 $22,123 $22,123 Total Capital $22,123 $22,123 $22,123 $22,123 $22,123 Net Worth $22,123 $22,123 $22,123 $22,123 $22,123 PROJECTED BALANCE SHEET