Business ideas and goals

Discuss about the Entrepreneur for Blueprints Business Planning Ltd.

The main goal is to provide the recruitment services to the job seekers in the legal sector   in the corporates all over Australia. It further assists its clients to find jobs in other disciplines such as finance, HR, IT, admin etc. (Carr, 2018).

The company has a team of 6 professionals which specializes in the domain of professional legal placements. The business intends to generate revenue of AS$ 150,000 and a profit of AS$ 25,000 in its subsequent years. 

The clients of the company are   the   small and medium sized companies operating in the legal and other sectors in Australia.

The business operates through its corporate office in the state of Sydney. As it operates in its corporate office, it requires sufficient amount of computers, laptops, furniture and other equipment to execute its activities.   

The business operates through a mix of debt and equity. It would be requiring funds amounting to AS$ 1, 50,000. The company is borrowing loans through banks and financial institutions.

The mission and the vision statements of Elias Recruitment Pty Ltd is related to becoming   one of the best recruitment organizations in Australia (Araoz, 2014).

The company started its operations in May, 2000. It was started by Mr. Jason Elias whose focus is on professional legal placements across Australia.  The team of Elias Recruitment Pty Ltd comprises of 6 professionals who are dedicated to provide legal professionals to the organizations all over Australia.

The short term business goals for the company are to generate more revenues. It wants to increase its revenue of about AS$ 200000 in the FY 2019-2020.

The long term goals of the business are to establish its branches in the other states of Australia.  For the expansion of its business, it has to hire 6 more people in its branches and head office.

A future exit strategy had been agreed upon by the directors of the company, in case of any of them wants to liquidate their interest in the business in the later years. It had been further agreed that in the fourth year of its incorporation, the shareholders can get the assets of the business revalued   . The director who wants to quit can sell his /her business to the other directors or shareholders. In case if the directors do not wish to exercise their rights, he/she can sell it to other parties outside the business (Employment agency, n.d.)  . 

Marketing

The following sources are used for this business plan:

1. Mahlab Report 2017 (Mahlab Report, 2017).
2. Reports of the Department of Education, Training and Employment.
3. Personal interviews with the personnel of Elias Recruitment Pty Ltd.
4. Australian Bureau of statistics.

Following conclusions are drawn after reviewing the industry:

• Competitors: The competitors of the company include the other recruitment firms operating in the legal sector in Australia. They also provide the recruitment consultancy in the field of technology, ICT/Digital, Legal and Accounting services. There are 1023 employment agencies operating in Sydney itself (IBIS World, 2018).
• Scope: The scope of the recruitment industry is to provide a competitive and productive labor market by aligning the interests of the recruiters and the  job seekers.
• Industrial Analysis: With regards to the employment industry in Australia, the legal framework in these sectors is relatively less with low barriers of entry and exit. There were around 6900 recruitment agencies with a revenue generation of $11 Billion in 2015-16. Also, there are small and medium sized recruitment agencies operating in Australia (Department of Job and Small Services, 2017).
• Potential strategic alliances: The revenue is generated through the permanent and temporary placement of employees in the law and other firms. Generally, the commission received by these firms’ amounts to 10 % to 30 % of the annual salary of the employees. Also, it is also generated through registrations of the job seekers (KPMG, 2016).
• SWOT analysis: The Potential strengths of the company pertain to its goodwill in the market and the professional expertise of the personnel employed in the company.

The potential weaknesses of the company are its limited number of personnel to cater to the vast market of job seekers and the lack of capital to expand itself in the market.

The potential opportunities attribute to the increasing demand of the legal jobs in the Australian market and its economies of scope.

The potential threats relate to the larger recruiter websites and companies who have a greater access to the job seekers and companies. Besides this, the larger companies have great market share as compared to Elias Recruitment Pty Ltd, so it is facing the threat of losing its identity in the Australian market of employment agencies (Australian Public Service Commission, 2015).

Pricing Policies of the company: The Company charges 10-15% of the gross annual salary of the permanent employees whereas in the case of temporary employees, it charges 10 % of the hourly rate paid to them. The terms of payment would be 7 working days and the accounts will be adjusted on the day when the services would be provided (Ekwoaba, Ikeije and Ufoma, 2015).

Product Policies of the company: The product policies pertain to the planning of the target market which is the small and medium sized organizations requiring candidates related to the legal field.

Promotions: According to Mohammadi and Jafarpanah (2014) the ICT marketing is being used in the company to promote its services. The use of internet, social media, direct mail, telephonic calls and messages has been used for marketing.

Place: The Company conducts its business in Sydney to provide the recruitments to the companies operating in legal and other domains.

Elias Recruitment Pty Ltd. is a proprietary limited company registered in Australia. It is established with three shareholders.

ABC (30% shareholding)

DEF (30% shareholding)

GHI (40% shareholding)

The company is subjected to the Private Employment Agents Act 2005 which comprises of the Private Employment Agents Code of Conduct (Employment agency, n.d.)  . It is further subjected to Work Health and Safety Act 2011 and Private Employment Agents (Code of Conduct Regulation 2005.

The commercial activities executed by the managing director of the company are conducting interviews of the personnel to be hired, keeping the board enlightened about the statement of affairs of the company, monitoring the bookkeeping and overall administration of the organization.  His remuneration amounts to AS$ 30000 per year (Cushway, 2015).

Operations

The senior consultants are appointed for managing the daily activities of the office. They are responsible for the sales and promotion services also. They are dealing with clients and comprehend their needs. They are qualified in Law, business administration and have a vast experience of handling firms in the legal sector. Their annual salary is AS$20000 per year.

Apart from this, training sessions of the employees are also conducted on regular basis to enhance their skills on the matters related to law and other domains so that they can deal with the clients in an efficient manner (Sugden and Moulson, 2015).

The Professional Indemnity Insurance for Recruitment Consultants, Management Liability Insurance which includes the cover for liabilities related to the directors, officers and the employment practices   required by the company. Also, it is required to insure itself by public and products liability insurance which includes the hedging of risk related to the office, general business operations and the acts, onions and commissions committed by the employees (Karthiga, Karthi and Balaishwarya, 2015).

It is calculated that the premium amounts to AS$ 4500 per year. Also, the provisions related to the back up and security of the data and the security of the office documents amount to AS$500 per year.

The business is conducted at the Suite 901, Level 98 4 Pitt Street situated in Sydney, New South Wales. The premises is on rent, hence the company pays an annual rent of AS$ 15000 . The employment agent license will have to be obtained from the Chief Minister, Treasury and Economic Development Directorate.

The equipment required for the business is:

• 6 telephone lines
• 6 mobile phones
• 6 computers and laptops
• high speed internet access
• 6 scanners and printers
• 10 chairs
• 10 tables
• 12 filing cabinets

The total cost of these items is AS$ 80000.

The software used by the company are Clear Company HRM, Jobvite and Paycor Perform (Mindia and Hoque,2018).

The critical risk confronted by the  business are the liabilities related to financial loss  faced by the company in the event of any negligible acts committed by the employees or the management . The professional indemnity insurance pays the legal cost to compensate the same (Harris et al., 2015).

The following are some of the financial assumptions for Elias Recruitment Pty Ltd:

• The recruitment charges charged by the customer have been assumed to be AS$ 500.
• The operating expenses have been assumed to be 5% .
• The tax charged on profits would be 30%.
• Additional Equipment would be purchased in 2019.
• Depreciation for computers would be 50 % on diminishing value basis and 100 % on laptop on diminishing value basis (Australian Tax Rates and Information, 2018).   

Sales per unit = AS$500 @ 200 candidates

Total sales =AS$ 100,000

Fixed cost = AS$ 30000

Variable cost =AS$ 200 per unit

Contribution per unit= Sales per unit –Variable cost

Therefore Contribution per unit = 500-200= 300

Break Even Point = Fixed cost/Contribution per unit

Finance

 = AS$30000/300 = 100 units

Breakeven point (in sales) = fixed cost / contribution margin ratio

Contribution margin ratio = (sales per unit – variable cost per unit)/sales per unit

(300/500)*100 = 60%

BEP (in sales) = A$30000/60% = A$50,000

 Cash flow forecast (2 years)

Cash Flow Statement
	Amount (AS$)
	2019	2020
Cash Flow from Operating Activities
Cash sales	150,000	170,000
Realization from Debtors	50,000	80,000
Payment to Creditors	(35,000)	(25,000)
Expenses paid	(6000)	(7500)
Total	159,000	217,500
Cash Flow from Investing Activities
Furniture Purchased	(30000)	(45000)
Equipment Purchased	(50000)	(50000)
Total	(80,000)	(95,000)
Cash Flow from Financing Activities
Equity capital	300,000	356,000
Borrowings	150,000	50,000
Total	450,000	406,000
Cash surplus/ deficit	529,000	528500
Opening balance	20000	549,000
Closing balance	549,000	1077500

Profit & Loss Statement
	Amount (AS$)
	2019	2020
Sales	200000	250,000
Miscellaneous income
A. Total	200000	250,000
B. Cost of Sales	45000	55000
C. Gross Profit (A-B)	155000	195000
D. Operating Expenses
Salary	40000	50000
Rent	15000	20000
Utilities	5000	10000
Insurance	5000	7000
Depreciation	25000	12500
Marketing	10000	15000
Maintenance & Repairs	5000	10000
Total	105000	124500
Operating profit	50000	70500
Less: Interest	15000	11,500
Profit before tax	35000	59000
Less: Tax @ 30%	10500	17700
Net Profit After tax	24500	41300

Balance Sheet
	Amount ($)
Assets	2019	2020
Current Assets
Cash	549,000	1077500
Debtors	70000	90000
Fixed assets
Furniture	30000	45000
Equipment	50000	50000
Total Assets	699000	1262500
Liabilities
Current Liabilities
Creditors	150000	350000
Short term loans	90000	150000
Other short term liabilities	9000	56500
Long term liabilities
Long term Loans (Borrowings)	150,000	50,000
Other long term liabilities	–	300000
Owner’s equity
Equity	300,000	356,000
Total Liabilities & Equity	699000	1262500

The business plan of Blueprints          Business          Planning          Pty       Ltd consists of establishment of a small private proprietary limited company for providing management and  consultancy services for small and medium scale enterprises whereas  the business plan of Elias Recruitment Pty Ltd. consists of  providing the recruitment services  by an existing company to the job seekers in the legal sector   in the corporates all  over Australia .

The business plan  of Blueprints         Business          Planning          Pty       Ltd  begins with employing one full  person  who is also the shareholder of the company  and it plans to employ 3-4 people in the near future for the expansion of it operations.  Elias Recruitment Pty Ltd. has employed 6 senior consultants for hiring appropriate personnel for the law firms and it plans to employ 6 more people for the expansion of its operations (Lorincová ,2015). 

Blueprints        Business          Planning          Pty       Ltd plans to generate sales revenue amounting to AS$ 100000 and a profit of AS$ 2000 by the end of its initial year of incorporation. Elias Recruitment Pty Ltd intends to generate revenue of AS$ 150,000 and a profit of AS$ 25,000 in its subsequent years. 

The Breakeven point of Blueprints     Business          Planning          Pty       Ltd is $101362 whereas Elias Recruitment Pty Ltd has a breakeven point of A$50,000.

In order to assure growth and success in the business operations, Elias Recruitment Pty Ltd  should adopt the following marketing strategies:

• Control: For long term growth and development of the company, its operations should be continuously monitored to examine the loopholes and eliminate them (Hardison, Lim and Keller, 2015).
• Innovation: In order to compete in this competitive world, it has to innovate new methods to conduct its operations and ad on new services which differentiate itself from its competitors (Khatri et al., 2015).  
• Quality: The Company should maintain quality in its services in order to grow and excel in its domain. It must provide quality services to its clients which assists it in long term growth and development (Chungyalpa and Karishma, 2016).

Conclusion

Hence to conclude, it can be said that in order to implement an appropriate business plan, it is necessary to evaluate the various internal and external factors affecting the business. The company has to develop strategies to have a competitive edge in the market. Hence to compete some strategies have been evaluated by the company to succeed in the market and expand its operations.

References

Araoz, C.F. (2014) It’s Not the how Or the what But the who: Succeed by Surrounding Yourself with the Best. Harvard Business Press.

Australian Public Service Commission (2015) Capability Review : Department of Employment[online] Available from: https://www.apsc.gov.au/__data/assets/pdf_file/0005/70736/department-of-employment-capability-review.pdf [Accessed 17^th April 2018].

Australian Tax Rates and Information (2018) Depreciation of Computers [online] Available from: https://atotaxrates.info/tax-deductions/ato-depreciation/depreciation-of-computers/ [Accessed 17^th April 2018].

Carr, J. (2018) Careers for law graduates in banking and financial services [online] Available from: https://gradaustralia.com.au/law/careers-for-law-graduates-in-banking-and-financial-services [Accessed 14^th April 2018].

Chungyalpa, W. and Karishma, T. (2016) Best Practices and Emerging Trends in Recruitment and Selection. Journal of Entrepreneurship & Organization Management. 5(2),pp. 1-5.

Cushway, B. (2015) The Employer’s Handbook 2015-16. Kogan Page Publishers.

Department of Job and Small Services (2017) The Australian Recruitment Industry – a comparison of service delivery 2016 [online] Available from: https://www.jobs.gov.au/news/australian-recruitment-industry-comparison-service-delivery-2016  [Accessed 16^th April 2018].

Ekwoaba, J.O., Ikeije, U.U. and Ufoma, N. (2015) The Impact of Recruitment and Selection Criteria on Organizational Performance. Global Journal of Human Resource Management. 3(2),pp. 22-33.

Employment agency (n.d.)  Employment agency industry overview  [online] Available from:  https://ablisfiles.business.gov.au/queensland/resource/employment%20agency%20business%20start-up%20guide.pdf[Accessed 14^th April 2018].

Hardison, C.M., Lim, N. and Keller, K.M.(2015) Recommendations for Improving the Recruiting and Hiring of Los Angeles Firefighters. Rand Corporation.

Harris, M.S., Loxton,D.,  Wigginton,B. and. Lucke, J.C.(2015) Response to Invited Commentary. American Journal of Epidemiology. 181(10), pp. 750-751.

IBIS World (2018) Employment Placement and Recruitment Services – Australia Market Research Report[online] Available from:   https://www.ibisworld.com.au/industry-trends/market-research-reports/administrative-support-services/employment-placement-recruitment-services.html [Accessed 16^th April 2018].

Karthiga, G., Karthi, R.and Balaishwarya, P.(2015) Recruitment and Selection Process. International Journal of Scientific and Research Publications. 5(4),pp. 1-4.

Khatri, C., Chapman, S.J., Glasbey, J., Kelly,M. ,  Nepogodiev, D., Bhangu ,A. and  Fitzgerald, J.E.(2015) Social Media and Internet Driven Study Recruitment: Evaluating a New Model for Promoting Collaborator Engagement and Participation. Plos One . 10(3), pp. 1-11.

KPMG (2016) The Australian Recruitment Industry: A comparison of service delivery [online] Available from: https://docs.jobs.gov.au/system/files/doc/other/the_australian_recruitment_industry_accessible_version_august_2016_final.pdf [Accessed 16^th April 2018].

Lorincová , S.(2015)The Improvement of the Effectiveness in the Recruitment Process in the Slovak Public Administration. Procedia Economics and Finance. 34(2015),pp. 382-389.

Mahlab Report 2017(2017) Recruitment [online] Available from: https://www.mahlab.com.au/files/editor_upload/File/Mahlab-Reports/Mahlab-Report-2017-Private.pdf [Accessed 14^th April 2018].

Mindia, P.M. and Hoque, K. (2018) Effects of E-recruitment and internet on recruitment process: An Empirical study on Multinational companies of Bangladesh. International Journal of Scientific Research and Management (IJSRM).6(1), pp. 1-6.

Mohammadi , V. and Jafarpanah , I.(2014) Marketing Strategies in Knowledge-Based Companies of ICT Services. Journal of Management and Sustainability. 4(3),pp. 199-207.

Sugden, N. and Moulson, M.C. (2015) Recruitment strategies should not be randomly selected: empirically improving recruitment success and diversity in developmental psychology research. Frontiers in  Psychology. 6(523), pp. 1-11.