Market Analysis

The web application contains step-by-step procedure which enables the user irrespective of his knowledge in the domain of finance to generate his own business plan in a matter of an hour or two, if not in minutes irrespective of the knowledge levels he possess. To facilitate the same, the following features are enabled in the application.

• Customised templates depending upon the nature of business and the industry in which it operates;
• Glossary with meanings and explanation on each and every term used in the course of preparation of report;
• Video tutorials by our the experts in the topic to make the user understand the terminology, its usage and the impact it creates on various other areas; and
• Post generation of the plan, a detailed analysis of the report and the overall financial feasibility of the project, areas of improvement, if any, and also the areas of improvement.

The product is available in different variants which are customised for different levels of users. A brief description of each variant is as follows:

• For new entrepreneurs – Guide;
• For Professionals such as CAs, CPAs and other practitioners in Finance– Second Fiddle;
• For Academics – Resource; and
• For Professional Entrepreneurs –

The access for the web application is given to the users in various ways depending upon the category to which the user belongs. The following are the types of access available –

• For professionals – life time membership;
• For entrepreneurs – one time access / life time membership;
• For academics and research scholars – periodic membership / life time membership

The access to the portal in the case of membership is granted after the payment of one time enrolment fee and later the user can continue to utilise the services by paying annual subscription fee. As a compliment to the new member, the first year subscription fee is waived off and shall be granted a free access for first year.

All the one time users can also access the portal as a guest user and can generate their required report by paying a prescribed charge for generation of such report. The fee charged may differ from industry to industry, nature of report and the template used (User can choose from different templates that are designed with keeping in view the utility that can be generated from the report). Sample of such templates are as follows:

The templates are a combination of text and infographics which provide huge information in the form of simple understandable flow charts, pie diagrams and graphs which not only communicate the content effectively, but also include every minute detail that is relevant and value adding.

We never disclose the sensitive and personal information provided by the client to any third party and owe our utmost confidentiality about the information we receive from the user. We are committed to deliver the best and unbiased analysis with professionalism and due care without distortion of facts, whether intentionally or otherwise. Further, we are committed to provide the user of the portal with best information available and we cross check the information with professional competence.

Our prospective clientele can be from wide range of backgrounds which include but not limited to the following:

• Finance practitioners;
• New entrepreneurs;
• Academic groups and Research scholars; and
• Established and successful entrepreneurs.

Australia is one of the countries which produce a lot of entrepreneurs. As many as 12.2 % of the total population of the country are entrepreneurs (Facts, 2019). Survey states 1,465 new start-ups emerged in a single financial year of 2018. 41.6% of the promoters of the start-ups in Australia are first time entrepreneurs. Further, all these promoters are from various academic backgrounds. The following table shows the percentage of entrepreneurs and their education background (Startupmuster.com, 2019):

Level	Percentage
High School	12.5%
Industry Accreditation	0.3%
Vocational Certification	7.8%
Graduate Diploma	10.1%
Bachelor	25.4%
Double Bachelor	7.3%
Masters	22.6%
Honours	7.8%
PhD	6.1%

Technology and Operations

From the above table we can clearly understand that a considerable portion of entrepreneurs are not academically highly qualified. Further, not all the entrepreneurs who completed graduation are from ‘finance’ background which is evident from the fact that out of all the entrepreneurs, people who claims to have strong understanding of finance are 20.5%. Also, as many as 52.6% of start-ups have outsourced their financial and accounting management to the experts. These facts can conclude the prospective potential of the product ‘Guide’ in the Australian market.

Reports from CPA Australia released recently suggests that there are 163,750 active CPAs till date. Among them 41,108 members are associates and 13,312 are fellow members (Cpaaustralia.com.au, n.d.). They year 2017 witnessed a fresh enrolment of 11,098 for association as CPA in Australia and it is expected that the membership grows at a rate of 11,000 members per annum.

The primary area of operation and the target market of for our revenue generation is Australia and since the product is one of its kind and a complete innovation, lack of competitors (whether established or new) will be our core competitive advantage. Further, we are associated with every highly rated finance expert one can name in Australia and have a binding agreement with them for coming 5 years where the experts owe their exclusivity to deal with our company and that protects the loss of revenue to new competitors who copy our idea.

We own a copyright for the application, templates and every crucial aspect of the web application. Further, we also hold the patent for the code generated by our IT team and hence it will be illegal to imitate our web application or use our back-end code. Further we have exclusivity agreement with all the API providers for coming 5 years. These steps will ensure protection of our market share from all the unethical threats that are posed by our potential competitors, if any.

The development and commencement of operations of the project will take 10 weeks of time from the date on which the project goes on board. All the necessary requirements to take the project live and other background activities before the project goes live were taken care of. The following diagram shows the various project milestones and the complete time line of the project. (Sharma, n.d.)

Projected Initial Investment
Year	1
Development of the Software	$28,000
Required Risk Capital (working capital)	$14,000
Systems and Central Server	$42,394
Advanced Deposit towards Rent	$5,450
Security Deposits	$5,500
Premium for Insurance	$2,500
Office Furniture and other Fixtures	$29,500
Cloud platform service cost	$1,545
Unanticipated and miscellaneous expenses	$1,111
Total Investment Costs	$1,30,000

Source of Funds
Owner’s Equity
Promoter’s investment	$65,000.00
Total Sources from Equity	$65,000.00
Outside Financiers
Term loan from Banks	$65,000.00
Total funds from Finance	$65,000.00
Total Accumulated Funds	$1,30,000.00

Variants their Prices and Costs
Product Name	Cost Per Item	Profit Per Item	Revenue Per Item
Guide	$26.00	$100.00	$126.00
Second Fiddle	$16.00	$100.00	$116.00
Resource	$18.00	$100.00	$118.00
Confidant	$24.00	$100.00	$124.00

Employee Benefit Expenses
Roles	Growth (%)	1	2	3
Owner	2.1%	$1,00,000	$1,02,100	$1,04,244
Manager – Operations	2.1%	$1,17,256	$1,19,718	$1,22,232
IT Staff	2.1%	$81,491	$83,202	$84,950
Technicians – Network & Hardware	2.1%	$66,776	$68,178	$69,610
Front-end receptionist and others	2.1%	$39,500	$40,330	$41,176
Total	2.1%	$4,05,023	$4,13,528	$4,22,213

Forecasted expenses (yearly)
Year	1	2	3
Administration and other	$27,000	$28,080	$29,203
Advertising and Marketing	$8,242	$9,478	$10,900
Maintenance Costs	$2,250	$2,318	$2,387
Insurance Premium	$2,500	$2,625	$2,756
Utility charges for cloud	$1,545	$1,299	$1,299
Office Rent and other Utilities	$21,800	$22,890	$24,035
Other Miscellaneous expenses	$19,780	$22,747	$26,159
Totals	$83,117	$89,437	$96,739

Other Assumptions
Year	1	2	3
Interest Rate – Short Term	12.0%	12.0%	12.0%
Interest Rate – Long Term	10.0%	10.0%	10.0%
Income Tax Rate	27.5%	27.5%	27.5%

• Growth Rate of tax – (Penguin Management, 2018)
• Salary of Owner, Manager, IT Staff and Receptionist – (Payscale.com, n.d.) and (Au.indeed.com, n.d.)
• Salary Growth Rate – (Tradingeconomics.com, 2019)

Annual Sales Forecast
Year	1	2	3	4	5
Growth (%)	0.0%	15.0%	15.0%	15.0%	15.0%
Guide	$3,67,416	$4,22,528	$4,85,908	$5,58,794	$6,42,613
Second Fiddle	$6,58,629	$7,57,423	$8,71,036	$10,01,692	$11,51,946
Resource	$5,69,487	$6,54,910	$7,53,146	$8,66,118	$9,96,036
Confidant	$52,824	$60,748	$69,860	$80,339	$92,390
0	$0	$0	$0	$0	$0
Totals	$16,48,355	$18,95,609	$21,79,950	$25,06,942	$28,82,984
Cost of Sales Forecast
Year	1	2	3	4	5
Growth (%)	0.0%	15.0%	15.0%	15.0%	15.0%
Guide	$75,816	$87,188	$1,00,267	$1,15,307	$1,32,603
Second Fiddle	$90,845	$1,04,472	$1,20,143	$1,38,164	$1,58,889
Resource	$86,871	$99,901	$1,14,887	$1,32,120	$1,51,938
Confidant	$10,224	$11,758	$13,521	$15,549	$17,882
0	$0	$0	$0	$0	$0
Totals	$2,63,756	$3,03,320	$3,48,818	$4,01,140	$4,61,311
Gross Profit
Year	1	2	3	4	5
Total	$13,84,599	$15,92,289	$18,31,132	$21,05,802	$24,21,673

Employee Benefits Plan – Yearly
Year	1	2	3
Owner	$1,00,000	$1,02,100	$1,04,244
Manager – Operations	$1,17,256	$1,19,718	$1,22,232
IT Staff	$4,07,455	$4,16,012	$4,24,748
Technicians – Network & Hardware	$66,776	$68,178	$69,610
Front-end receptionist and others	$79,000	$80,659	$82,353
Total	$7,70,487	$7,86,667	$8,03,187

Numbers of Employees
Year	1	2	3
Owner	1	1	1
Manager – Operations	1	1	1
IT Staff	5	5	5
Technicians – Network & Hardware	1	1	1
Front-end receptionist and others	2	2	2
Totals	10	10	10

Pro-forma Profit and Loss (Yearly)
Year	1	2	3
Revenue	$16,48,355	$18,95,609	$21,79,950
Cost of Services	$2,63,756	$3,03,320	$3,48,818
Gross Margin	84.00%	84.00%	84.00%
Gross Profit	$13,84,599	$15,92,289	$18,31,132
Expenses
Employee Benefit Expenses	$7,70,487	$7,86,667	$8,03,187
Administration and other	$27,000	$28,080	$29,203
Advertising and Marketing	$8,242	$9,478	$10,900
Maintenance Costs	$2,250	$2,318	$2,387
Insurance Premium	$2,500	$2,625	$2,756
Utility charges for cloud	$1,545	$1,299	$1,299
Office Rent and other Utilities	$21,800	$22,890	$24,035
Other Miscellaneous expenses	$19,780	$22,747	$26,159
Payroll Taxes	$0	$0	$0
Total Operating Costs	$8,53,604	$8,76,104	$8,99,926
EBITDA	$5,30,995	$7,16,185	$9,31,206
Income Tax	$1,75,228	$1,95,307	$2,54,835
Interest Expense	$7,257	$5,977	$4,534
Depreciation Expenses	$7,135	$7,135	$7,135
Net Profit	$3,41,375	$5,07,766	$6,64,702
Profit Margin	20.71%	26.79%	30.49%

Pro-forma Profit and Loss (Yearly)
Year	1	2	3
Revenue	$16,48,355	$18,95,609	$21,79,950
Cost of Operations	$8,53,604	$8,76,104	$8,99,926
EBITDA	$5,30,995	$7,16,185	$9,31,206
Less: Taxes, Interest, and Depreciation	$1,89,620	$2,08,419	$2,66,504
Net Profit	$3,41,375	$5,07,766	$6,64,702

Pro-forma Cash Flow Analysis – Yearly
Year	1	2	3
Cash from Operating Activities	$3,48,510	$5,14,901	$6,71,837
Cash from Debtors	$0	$0	$0
Operating Cash Inflow	$3,48,510	$5,14,901	$6,71,837
Other Cash Inflows
Fresh Equity	$65,000	$0	$0
Fresh Debt	$65,000	$0	$0
Disposal of Business Assets	$0	$0	$0
Creditors Increase	$37,902	$43,587	$50,125
Total Other Cash Inflows	$1,67,902	$43,587	$50,125
Total Cash Inflow	$5,16,412	$5,58,488	$7,21,963
Cash Outflows
Principal Repayment	$10,094	$11,374	$12,817
Decrease in Creditors	$24,897	$29,876	$35,852
Debtors Increase	$0	$0	$0
Acquisition of Assets	$99,894	$1,28,725	$1,67,959
Dividends Declared	$24,000	$24,000	$24,000
Total Cash Outflows	$1,58,885	$1,93,976	$2,40,627
Net Cash Flow	$3,57,527	$3,64,513	$4,81,335
Cash Balance	$3,57,527	$7,22,040	$12,03,375

Monthly Break Even Analysis
Year	1	2	3
Monthly Revenue	$84,684	$86,916	$89,280
Yearly Revenue	$10,16,209	$10,42,996	$10,71,356

Key Financial Ratios – Yearly
Year	1	2	3
Sales
Rate of Revenue Growth	0.0%	15.0%	15.0%
GP Ratio	84.0%	84.0%	84.0%
Financials
NP Ratio	20.71%	26.79%	30.49%
Assets-to-Liabilities	6.79	13.03	21.29
Equity- to- Liabilities	5.79	12.03	20.29
Assets-to- Equity	1.17	1.08	1.05
Liquidity
Quick Ratio	5.26	10.28	16.45
Cash-to-Assets	0.78	0.79	0.77

Payscale.com. (n.d.). Hardware Engineer Salary (Australia) | PayScale. [online] Available at: https://www.payscale.com/research/AU/Job=Hardware_Engineer/Salary [Accessed 1 Feb. 2019].

Payscale.com. (n.d.). Information Technology (IT) Consultant Salary (Australia) | PayScale. [online] Available at: https://www.payscale.com/research/AU/Job=Information_Technology_(IT)_Consultant/Salary [Accessed 1 Feb. 2019].

Payscale.com. (n.d.). General Manager Salary (Australia) | PayScale. [online] Available at: https://www.payscale.com/research/AU/Job=General_Manager/Salary [Accessed 1 Feb. 2019].

Au.indeed.com. (n.d.). Entrepreneur Salaries in Australia | Indeed.com. [online] Available at: https://au.indeed.com/salaries/Entrepreneur-Salaries [Accessed 1 Feb. 2019].

Sharma, L. (n.d.). WaterFall Model in Software Developement Life Cycle | SDLC. [online] Toolsqa.com. Available at: https://www.toolsqa.com/software-testing/waterfall-model/ [Accessed 1 Feb. 2019].

Cpaaustralia.com.au. (n.d.). [online] Available at: https://www.cpaaustralia.com.au/~/media/corporate/allfiles/document/about/membership-demographics-2018.pdf?la=en [Accessed 1 Feb. 2019].

Startupmuster.com. (2019). [online] Available at: https://www.startupmuster.com/reports/Startup-Muster-2018-Report.pdf?key=97351817082fb8ea90b8c05a417d44b73603486d7294787a82c28ab7a95b99bb [Accessed 1 Feb. 2019].

Facts, S. (2019). Topic: Startups in Australia. [online] www.statista.com. Available at: https://www.statista.com/topics/4729/start-ups-in-australia/ [Accessed 1 Feb. 2019].

Tradingeconomics.com. (2019). Australia Annual Change in Hourly Rates of Pay | 2019 | Data | Chart. [online] Available at: https://tradingeconomics.com/australia/wage-growth [Accessed 28 Jan. 2019].

Payscale.com. (n.d.). Entry Level Front Desk Receptionist Salary in Sydney, New South Wales (Australia) | PayScale. [online] Available at: https://www.payscale.com/research/AU/Job=Front_Desk_Receptionist/Salary/51510965/Entry-Level-Sydney [Accessed 28 Jan. 2019].

Liveplan.com. (n.d.). Business Plan App For Startups & Entrepreneurs | LivePlan. [online] Available at: https://www.liveplan.com/business-plan-app [Accessed 2 Feb. 2019].

Penguin Management. (2018). What To Know About Australia’s New Company Tax Rates (2018). [online] Available at: https://www.penguinaccounts.com.au/australia-company-tax-changes-2018/ [Accessed 28 Jan. 2019]. 

End User Data Loss Awareness. (n.d.). [image] Available at: https://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwik1ZiclZ_gAhVZeH0KHemmA2AQjRx6BAgBEAU&url=http%3A%2F%2Fgeek.stanito.com%2Fend_user_data_loss_awareness.php&psig=AOvVaw3p9h389dZICOThUcNjJkfq&ust=1549269612686788 [Accessed 3 Feb. 2019].

Business Reporting Templates. (n.d.). [image] Available at: https://mitro.nuevodiario.co/business-reporting-templates/ [Accessed 3 Feb. 2019].