Student Name

  • Category:
    Business
  • Document type:
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  • Level:
    High School
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AUSTRALIAN LEGAL FUNDING COMPANY

AUSTRALIAN LEGAL FUNDING COMPANY BUSINESS PLAN

Table of Contents

Executive Summary 4

Chart 1: Anticipated Cash Flows 5

Objectives 5

Keys to Success 5

Mission 6

Company summary 6

Company Ownership 6

TECHNICAL FEASIBILITY 7

Startup Summary 7

Location and Facilities 7

Services 8

Services Description 9

Marketing Plan 9

MARKET FEASIBILITY 10

Summary Market Analysis 10

Market Segmentation 10

Target Market Segment Strategy 11

Market Needs 11

Industry Analysis 11

Competition 11

Patterns 12

TECHNICAL FEASIBILITY 12

Summary of Strategy and Implementation 12

Competitive Edge 13

Sales Strategy 13

Sales Forecast 13

HUMAN RESOURCE FEASIBILITY 14

The Management Team 14

Personnel Plan 14

FINANCIAL FEASIBILITY 14

Financial Plan 14

Table 1: Key Assumptions 15

Projected Cash Flow 15

Projected Profit and Loss 15

Projected Balance Sheet 15

Appendices 16

Appendix A: Start-up Expenditure Worksheets 16

Appendix B: Target and Potential Number of Customers 18

Appendix C: Sales Forecast for the Next Three Years 19

Appendix D: Personnel Plan 20

Appendix E: Projected Cash Flow 21

Appendix F: Projected Profit and Loss 23

Appendix G: Projected Balance Sheet 23

References 25

Australian Legal Funding Company Business Plan

Executive Summary

Australian Legal Funding Company (ALFC) strives to be the leading company in providing financial assistance to the residence of Queensland in matters to do with settling legal expenses and medical bills. Apart from just offering finances to people, ALFC would put itself forward as the leading firm in offering any form of legal aid that residents of Queensland may need. The assistance would begin with small legal firms in the city of Queensland and then later spread over to the rest of other cities in Australia. The large number of small legal firms in Queensland would offer a suitable opportunity for the company to launch its services. The formation of this company has been facilitated by the fact that many people who face legal charges in the courts of law are unable to raise the full amount required to hire the services of a legal counsel. Some who are able enough to do this find another hurdle in raising finances to settle other bills in the form of fines and bails. Such are the same challenges that come to people who have been admitted to health institutions..

ALFC will be located in Queensland and will be operating in a small office room within the city. The office room will be rented with rent payable monthly as will be agreed between the owner of the company and the owner of the room. The funds to be used for the payment of the rent will be obtained from initial startup capital provided by the owner and founder.

The company expects the revenues to grow from $342,000 in the first year of operation to $421,000 in its second year of operation. In this same period, ALFC expects to obtain a gross profit of about $12,000 in the first year and this is expected to grow to $24,000 in the second year and more than double to $49,000 in the third year. The steady growth in profit is expected to continue in the subsequent year and thus the company is anticipated to break-even in the fourth year of operation. The chart below indicates the expected revenue, gross margin and the net profit for the next three years of operation:

Chart 1: Anticipated Cash Flows

Student Name

Objectives

ALFC aims to achieve the following in its first few years in operation:

Become the leading institution offering financial grants to the firms and individuals in need.

Effectively conduct its operations with diligence so as to attract and retain clients.

Ensure a steady flow of revenue by offering the best option for those seeking to get financial aid.

Keys to Success

ALFC will ensure success by:

  1. Providing the shortest procedure required for one to secure grant from the institution.

  2. Conducting extensive advertisement so as to create awareness among the clients in Queensland.

  3. Developing a clear and transparent procedure in all areas of operation in order to command the confidence of its clients.

  4. Hiring competent and experienced personnel to manage the running of the affairs of the company.

Company Ownership

ALFC is formed as a Limited Liability Company with its headquarters located in the area where it is founded, that is, Queensland. This will also serve as the head office if the company will grow to other states. This company is solely owned and the owner will double up as the overall manager of the company. Unless the owner decides to cede some of his shares in the company, he shall remain the sole owner of this company.

TECHNICAL FEASIBILITY

Startup Summary

The expenditures that will be incurred when starting the business include:

  1. Consultant fees of about $3,200 paid for the purpose of getting advice on the setting up of the business.

  2. Business permits and licenses will be obtained by the payment of up to $1,800 as legal fees.

  3. Marketing activities expenses incurred for creating awareness among civilians amounted to $4,000.

  4. Deposit amount for rent paid for the next two months amount to $8,000

  5. Insurance expenses for the employees, office furniture and general liability paid in the amount of $1,000

  6. Renovation conducted on the office buildings in terms of giving it a facelift amount to $6,000

  7. Additional expenses including prepaid telephone, electricity and other utility deposits as well as stationery equipment amount to $3,000.

The startup assets required are not much as the major asset is the funds required for startup purposes. The amount would be provided in the amount of $120,000 and the rest would be acquired as loan from a local bank. $32,000 would be used as salaries for the owner and employees and $25,000 would be cash reserves. These would total as the operating capital for the first three months.

The total amount of the funds required for the startup and take off of the business totals to $270,000. The amount would ensure the company operations go on smoothly and no shortage would be experienced before the company can make profits in the first month.

The above assumptions can be summarized as in the chart and table contained in Appendix A.

Location and Facilities

The company will be located on one office room in the city of Queensland. The office space is a medium size building with the capacity to hold four partitioned sections that will act as the reception, owner’s office, sales manager’s office and finance manager’s office. The office room was acquired on rental basis with rent payable every month. Agreement on rent amount will be as agreed between the owner of the building and the owner of the business.

Furniture is to be installed in the offices with the reception only having a single table and two chairs, one chair for the receptionist and another for the client. The finance and sales managers’ offices will have a shelf each, for holding clients’ files for the purposes of reference. These offices will however be equipped with a desktop computer each for the storage and processing of customer information.

The premise is at the proximity of a local magistrate’s court. The location enables the company to be easily noticeable from a distance by individuals accessing the court. This will ensure easy access by clients and in the long run will bring with it the ease of marketing. The manner in which the interior of the whole office is arranged gives the picture of order and professionalism. Any client accessing our offices will be assured of good customer service.

Services

ALFC will strive to offer its clients with the best form of financial aid that can be found in the market. The company plans to come up with more friendly terms for application and qualification for the financial aid. The institutions already operating within Queensland, lack the requisite friendly procedure to carry out this exercise. ALFC will capitalize on this weakness to build its customer base. The efficacy and urgency with which ALFC strives to offer its services will leave the other players in the market only following in our footsteps. The company will furthermore offer incentives to loyal customers in order to encourage their loyalty and cultivate a culture of reward.

Marketing Plan

The proximity of the company to a court of law will make it easier to reach out to clients who may need financial aid. The company will furthermore liaise with the court to help identify persons with such needs as stated. The same will be done with hospitals so as to ensure a wide outreach. The company will design a large sign board to be installed along the nearby highway to direct clients to the premises.

Brochures will also be made and distributed to the masses. These brochures will be bearing information about the company’s activities and simple procedures that one will have to follow so as to get the required service.The company will also seek to hire a few sales representatives, although such a plan will only be of use once the company considers expanding. ALFC will create a website with a simple interface that any client can visit to get the information they require. The website will contain the same information as contained in the brochures. This website will serve as a marketing tool and a medium to communicate with clients who cannot at that particular time access our premises.

MARKET FEASIBILITY

Summary Market Analysis

The need for financial assistance has always been there with the need rising with each passing day. It is projected that this trend will continue rising as the available institutions grapple to keep up with the demand. The established businesses have continued to amass income even with clients complaining of their strict criteria of offering such assistance. This company will seek to build on the gaps in the industry to build a strong and loyal customer base. This will not however be done at the expense of the customers comfort.

Market Segmentation

ALFC will focus the marking activities on reaching out to the less than stable legal firms which still seek to stay afloat in the legal profession. These firms must already be in practice and not those that want to use the funds to start business. The firms to be funded must also be having legal proceedings in courts of law. These legal proceedings must also be among those stipulated in the criteria formed. The out of pocket assistance will also be extended to those individuals with pending medical bills and legal fees. The funds provided must be used for the purpose stipulated and by following the laid down procedure. Proximity of the company to the magistrate court will be a very big advantage in locating the target market.

The target and potential number of customers can be represented in the chart and table in Appendix B (legal firms in need of financial assistance in legal matters, individuals in need of financial assistance in legal matters and individuals in need of financial assistance in settling hospital bills)

Market Needs

The general trend towards transparency, honesty and ease of access are the major factors that contribute towards one seeking to do business with certain companies that offer the same services. Most clients desire those companies that have not adopted too many strict policies that will end up locking out many people or small firms that would require the services of a financial company.

Industry Analysis

The growth of demand for these services has grown tremendously in the recent years in Australia. The total number of individuals seeking the services of institution like ours numbered well in to thousands. Out of these, Queensland formed the area with the largest number of such people with the trend showing that the numbers are still swelling. Clients are however discouraged with the long levels of bureaucracy that they have to go through in order to get such help. Majority of them simply give up and drop their quest when the conditions become too much. There has therefore been the need to cut down on these criteria to encourage more people and firms to access the financial aid that they most require. With the access to these services even much easier, client numbers are expected to show a continued upward trend. Honesty and transparency would form the pillars on which ALFC is formed. This will help build on customer confidence.

Competition

Research conducted within the jurisdiction of Queensland shows that the area consist of more than eighty seven registered legal firms and companies. Out of these, sixty nine legal firms conduct their operations in small scale while the rest are fully fledged companies with operations stretched well to the other parts of Australia and beyond. ALFC would target these minor legal firms as their customers since the larger firms appear more stable and even if they were to require financial aid, their demands would appear too much to be handled by ALFC. Companies that offer direct competition to ALFC around Queensland are only five. The number is still low as this is a new concept in this area and it is yet to be exploited fully. Of the similar firms offering the services, none has terms as friendly as those offered by ALFC. Although most financial institutions like banks and insurance companies do not offer such kinds of financial aid, that is, legal financial aid and aid towards the settlement of medical bills, this sector exploitation still remain below par. This therefore creates a gap in the market that leaves a certain sector of financial provision unexploited.

The major player in the sector is the Government of Australia. It seems from the trends that many people trust the services offered by the government although some smaller sector players also have a share of the market. ALFC would come with a better policy and rates to attract a modest number of clients and try to wrestle some from the government institution. We believe this will still be a tall order but with policies in place, things are expected to show up.

TECHNICAL FEASIBILITY

Summary of Strategy and Implementation

The strategy to be applied by ALFC is to employ extensive marketing exercise to acquire new customers as we strive to keep the already acquired ones in order to create a sense of loyalty. The practice of keeping customers coming back or even referring other clients to our premises is our goal. This would be a good gesture and would give an indication that quality service is actually being offered in ALFC.

Competitive Edge

ALFC will offer itself as the financial company in town that has the customer’s interest at the heart of its operations. The customer service offered in our offices will serve to give our customers the most required peace of mind especially when it comes to financial matters. We believe that clients who come to seek financial aid have already gone through too much turmoil and all they need is the peace of mind. ALFC offers itself as the listening financial partner. Our criteria for qualification for the aid are not so bloated so that we can be able to bring in as many clients as possible.

Sales Strategy

All sales matters will be handled by the sales manager who will as well determine the number of sales persons that would be needed to carry out sales activities. The sales manager will adjust the activities of these sales persons to conform to the goals of the company. The person at the reception desk will handle new customers and those that are coming in to enquire about the services of ALFC. Further questions about the activities of the company will be dealt with by the sales manager through referral by the receptionist. Financial questions will be handled by the finance manager while more sensitive matters touching on the core of the company will be referred to the owner of the company. Be is the overall decision maker.

The company will use brochures as the primary marketing media. These brochures will contain much of the activities that the company specializes in and much more information about the company. A company website will also serve as a marketing tool where clients will be kept informed on what the company is up to. In addition to these, the company will rely on the word of mouth as spread by satisfied customers. With this in mind, the customer will have to be accorded the utmost respect and their satisfaction will be the main interest of the company. Any complain brought to the attention of the company will be handled amicably and professionally.

Sales Forecast

The company expects an upward trend in sales activities. The proximity of the company to a legal institution will serve to predict the trends in the short term and long term as well.

Sales for the next three years are as presented in the chart and tables in Appendix C.

HUMAN RESOURCE FEASIBILITY

The Management Team

The company will in the beginning years of the business operate under the overall management of the owner. When the right time comes that the management may see the need to expand to other areas, a more professional manager will be hired on a full time basis to steer the activities of the company. The manager hired should have expansive knowledge in both legal and financial matters. He/she should also have the interest of the company at heart, and be conversant with the goals and objectives of the company.

Personnel Plan

The personnel plan for ALFC is as outlined in Appendix D.

FINANCIAL FEASIBILITY

Financial Plan

ALFC will grow its revenues by capitalizing on the need for a financial entity that listens and acts on customers concerns. The major concern in the market is the strictness with which other companies offer their funds. This company will bank on this to create a more lax but yet effective measures to ensure that it attracts many customers. The funds provided by the owner and the borrowed capital will provide sufficient amount for the company to carry out its operations effectively.

Table 1: Key Assumptions

ASSUMPTIONS

Current Interest Rate

Long term Interest Rate

0

0

0

Projected Cash Flow

The chart and table in Appendix E shows the projected cash flow and the retained cash in the company account.

Projected Profit and Loss

The company expects to make profit right from the first financial year. This trend is expected to continue as can be projected in the statement in Appendix F.

Projected Balance Sheet

The net worth of the company is expected to increase from $270,000 in the first financial year to $492,000 in the third financial year as illustrated in Appendix G.

Appendices

Appendix A: Start-up Expenditure Worksheets

Chart 2: Start-up Amounts

Student Name 1

Table 2: Startup Expenses

STARTUP EXPENSES

Utility & Other Expenses

Consultation

Marketing

Insurance & Other Liabilities

TOTAL STARTUP EXPENSES

Table 3: Start-up Assets

STARTUP ASSETS

Required Cash

Reserve Capital

Other Assets

TOTAL ASSETS

TOTAL FUNDING REQUIRED

Cash Requirements on startup

Additional Cash Raised

Cash Balance on Starting Date

TOTAL ASSETS

LIABILITIES

Long-term Borrowing

$150,000

Accounts Payable

Other Current Liabilities

TOTAL LIABILITIES

$150,000

Table 4: Start-up Capital

$120,000

Other Investors

Additional Investment

$150,000

TOTAL INVESTMENT PLANNED

$270,000

Startup Expenses

TOTAL CAPITAL

$249,000

CAPITAL & LIABILITIES

$150,000

Total Funds

$220,000

Appendix B: Target and Potential Number of Customers

Chart 3: Market Analysis

Student Name 2

Table 5: Market Analysis

MARKET ANALYSIS

Potential Clients

Legal Firms

Legal Assistance (individuals)

Medical Bills (Individuals)

Appendix C: Sales Forecast for the Next Three Years

Chart 4: Sales Forecast

Student Name 3

Table 6: Sales Forecast

Legal Firms

$420,000

$450,000

$500,000

Medical Bills (Individuals)

$120,000

$150,000

$180,000

Legal Fees (individuals)

$110,000

$150,000

TOTAL SALES

$620,000

$710,000

$830,000

DIRECT COST OF SALES

Legal Firms

$100,000

$108,000

Medical Bills (Individual)

Legal Fees (Individual)

TOTAL COST OF SALES

$158,000

$196,000

$233,000

Appendix D: Personnel Plan

PERSONNEL PLAN

Receptionist

Sales Manager

Finance Manager

TOTAL PERSONNEL

TOTAL PAYROLL

$115,000

$125,000

$134,000

Appendix E: Projected Cash Flow

Student Name 4

PROJECTED CASH FLOW

Cash Income

$784,000

$800,000

$905,000

SUBTOTAL CASH INCOME

$784,000

$800,000

$905,000

Additional cash Received

VAT Received

New Borrowing

Other Liabilities

New Long term Liabilities

Sales of Assets

New Investment Received

SUBTOTAL CASH RECEIVED

$784,000

$800,000

$905,000

Expenditures

Cash Spending

$144,000

$148,000

$152,000

Bill Payments

$160,000

$168,000

$170,000

SUBTOTAL SPENT

$204,000

$316,000

$322,000

Additional Cash Spent

Repayment on Current Borrowing

Repayment on Other Liabilities

Purchase on Long term Assets

Purchase on Other Assets

SUBTOTAL CASH SPENT

$209,000

$328,700

$336,000

Net Cash Flow

$254,000

$260,000

$284,000

Cash Balance

$284,000

$356,000

$620,000

Appendix F: Projected Profit and Loss

PROFIT AND LOSS

$784,000

$800,000

$905,000

Cost of Sales

$340,000

$345,000

$450,000

COST OF SALES TOTAL

$340,000

$345,000

$450,000

Gross Margin

$444,000

$455,000

$455,000

Percentage Margin

Expenses

$120,000

$125,000

$132,000

Marketing Expenses

Maintenance

Other Expenses

OPERATING EXPENSES

$177,0000

$186,550

$197,500

PROFIT BEFORE TAX

$267,000

$268,450

$257,500

Interests

Taxes Paid

Net Profit

$210,000

$$210,750

$220,000

Net Profit Percentage

Appendix G: Projected Balance Sheet

PROJECTED BALANCE SHEET

Current Assets

$220,000

$300,000

$415,000

Other Current Assets

TOTAL CURRENT ASSETS

$220,000

$300,000

$415,000

Long term Assets

TOTAL LONG TERM ASSETS

TOTAL ASSETS

$244,000

$326,000

$442,000

Current Liabilities

Accounts Payable

Current Borrowing

Other Liabilities

SUBTOTAL CURRENT LIABILITIES

Long term Liabilities

$150,000

$120,000

TOTAL LIABILITIES

$190,200

$159,800

$127,500

Paid in Capital

$120,000

$120,000

$120,000

Earnings

$101,000

$134,000

$156,000

Total Capital

$270,000

$378,000

$492,000

Total Liabilities and Capital

$298,000

$401,000

$523,000

Net Worth

$270,000

$378,000

$492,000

References

Berry T (2016) A Simple Business Plan. Retrieved from https://www.entrepreneur.com/article/78610 [Accessed: 27 September 2016]

Queensland Law Society (2016) NIIS laws a win for vulnerable Queenslanders: QLS. Retrieved from http://www.qls.com.au/About_QLS/News_media/Media_releases [Accessed: 27 September 2016]

Legal Aid Queensland (2015) Can I get legal aid? Retrieved from http://www.legalaid.qld.gov.au/Find-legal-information/Factsheets-and-guides/Factsheets/Can-I-get-legal-aid#toc-what-is-financial-help- [Accessed: 27 September 2016]

Legal Resources (2016) Law Firms, Lawyers in Queensland (QLD) by City. Retrieved from https://www.hg.org/firms-queensland.html [Accessed: 27 September 2016]