Business Plan For a Start-up Business

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BU EXECUTIVE SEARCHHUMAN RESOURCES CONSULTANCY

SOUTHERN STATES UNIVERSITY

BUSINESS PLAN

by

BILAL USTA

December 17, 2009

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ContentsEXECUTIVE SUMMARY..................................................................................................................................2

1.1 KEYS TO SUCCESS...................................................................................................................................4

1.2 MISSION STATEMENT............................................................................................................................4

1.3OBJECTIVES.............................................................................................................................................4

2. MARKET ANALYSES..................................................................................................................................5

2.1 HUMAN RESOURCES INDUSTRY.........................................................................................................5

2.2 OUTLOOK FOR HR(HEADHUNT) INDUSTRY........................................................................................6

2.2.1 Ratings of HR among top five growing professions.....................................................................6

2.2.2 Economic crisis: Disadvantage for HR indstry, Advantage for headhunters...............................7

2.2.3 Outsourcing decreases time consumption and reduces cost......................................................7

2.3 COMPETITORS...................................................................................................................................7

2.4 BARRIERS TO ENTRY..........................................................................................................................8

2.4.1 Brand Recognition:.....................................................................................................................8

2.4.2 CUSTOMER LOYALTY...................................................................................................................8

2.5 TARGET MARKET................................................................................................................................8

GROWTH OF TARGET MARKET.......................................................................................................8

3. LEGAL STRUCTURE...................................................................................................................................9

3.1 MANAGEMENT AND OWNERSHIP.....................................................................................................9

3.2 ORGANIZATIONAL STRUCTURE........................................................................................................10

4. PLACEMENT PROCESS............................................................................................................................10

5. STRATEGIES...........................................................................................................................................12

5.1 MARKETING STRATEGY....................................................................................................................12

5.2 SALES STRATEGY..............................................................................................................................13

5.3 SWOT ANALYSES..............................................................................................................................13

5.3.1 STRENGTHS...............................................................................................................................13

5.3.2 WEAKNESSES............................................................................................................................14

5.3.3 OPPORTUNITIES........................................................................................................................14

5.3.4 THREATS...................................................................................................................................14

6. FINANCIAL TABLES.................................................................................................................................15

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EXECUTIVE SUMMARY

BU Executive search is a human resource consulting company is going to be located in

Istanbul, Turkey founded by BILAL USTA. The company will be starting business January

2010. Istanbul is the heart of trade in Turkey. Also, most of the large firms’ headquarters are

located in Istanbul.

What is the most important asset of the companies?

For a company, the biggest asset is the staff of theirs. Because, if they do not have good

staff, they can not produce quality products. But even if the company has the best staff, they are

not going to be able to produce quality. Because, they have to be managed by quality managers.

If you make a research about what do large firms compete for with the competitors is not only

catching customers. The first thing they compute about is to recruit the best staff and managers.

Because, they know the importance of quality staff and managers. When they put all of the

reasons together, some professional companies are asking for help from the professional

recruitment companies. The most common of these companies are consulting companies. Those

companies help their clients to find all level of staff and managers. The consulting company has

database about all the candidates’ resumes. So they try to find the staff with this process. By this

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way the clients do not have to deal with recruitment process. For some companies, this method is

cheaper than creating a recruitment department. The less common consulting companies are the

headhunters. For finding high, middle and lower level managers, some companies use

headhunters. Headhunters make deep research for finding the best managers who match with the

job requirements. In their research, they use different methods. The first method that they are

using is benefiting from their database. Every day they put on new resumes to their database. So,

when they receive a new job description, they check their database and update the resumes of

possible candidates. Finally if the candidate matches with job requirements, they arrange an

interview. If they think he/she is component, they send him/her to their client to be interviewed.

If the client hires, they get commission. The second method is headhunting. This method is the

extraordinary one. The headhunters try to reach the names from the client’s competitors. After

reaching the names, they call them one by one to tell about the job and ask for their resumes. If

they are interested in new job opportunity, they send their resumes. Finally, if they are adequate,

the same process starts and goes on.

1.1 KEYS TO SUCCESS

The keys to success are to provide the best service to reach new customers by the clients’

references and establish plans and commitment to the plans.

1.2 MISSION STATEMENT

Providing our clients the best solution in their recruitment process for managerial

positions and providing executives in finding new positions to be more productive, satisfied and

long lasting.

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1.3OBJECTIVES

Concluding agreements with at least two of the top10 largest banks:

By courtesy of the strong contacts and references, the company will be introducing themselves;

also they will present their services and projects to the top 10 largest banks in Turkey. Bilal

Usta’s aim is concluding agreements with at least two of them.

Increasing the number of clients through superior service

For the service companies, reaching new clients comes from quality service. So, the company

will be aiming to reach new clients by providing quality service and getting references from

them.

Becoming a profitable company within the first year of operation

For headhunter companies the start-up expenses are not high. There is only an office, furniture

and legal fees is needed for establishing the company. Also after setting up the company, there is

no cost. Only they need to pay salaries and taxes. So becoming a profitable company within the

first year of operation is not that difficult.

2. MARKET ANALYSES

2.1 HUMAN RESOURCES INDUSTRY

The industry is really competitive. Because of the knowledge of the importance of having

quality staff, the companies are competing about hiring the most productive and long

lasting staff. The researchers are expecting from companies and countries around the

world to invest in their human resources infrastructure enormous growth in the next 10

years. The industry is one of the biggest with a hundred billion dollar investment,

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thousands of suppliers selling hundreds of different products and services. These services

are recruitment and staffing, employee benefits, payroll, training and development and

more.

There are six branches in human resources industry.

1. Recruitment and Staffing: This branch includes searching for and hiring new

employees. This category ends when the employee is hired.

2. Compensation/Payroll: This includes payroll processing. Some companies specialize in

specific payroll and compensation services, compensation design, and salary statistics

services.

3. Employee Benefits: This category is about employee benefit and related services.

4. Talent Management/Employee Relations: Starts from hiring as an employee and goes

on appraisal, evaluation, recognition, promotion, retention, and succession planning

services.

5. Training and Development: This category is all about the employees’ training and

developing their skill.

6. Compliance: This branch is about labor relations, legislation, litigation, alternative

dispute services, OSHA, HIPPA, etc.

As a result, HR industry is a large industry with large investments and big

opportunities.

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2.2 OUTLOOK FOR HR(HEADHUNT) INDUSTRY

2.2.1 Ratings of HR among top five growing professions

According to the analysts, HR industry is in the five groving profession. High-rate

growth for small and aggressive companies presents challenges and possibilities to human

resources (HR) managers. As a company grows, HR executives become more involved in

personnel decisions such as applicant searching, hiring, training and developing benefit plans.

They are tasked with recruiting people with the technical know-how and with the proper work

attitude embodying cooperation, flexibility, innovation, aggressiveness and marketing-

orientedness.1

2.2.2 Economic crisis: Disadvantage for HR indstry, Advantage for headhunters

The economic crisis is always seen to be problems for the most industries. Economic

crisis in 2009 effected HR industry negatively. Because of the companies’ economic weakness

brought less job openings than previous years. So, this is the negative side of the HR industry.

But if we look at the other side of the medallion, this can be a good opportunity for headhunters.

The companies need to be managed very carefully and professional in these years. So, the quality

managers are needed for every company. So, the best way to find the best managers is working

with headhunters. Because headhunter companies will provide their clients most productive and

long lasting managers. So, the economic crisis can be a good opportunity for headhunters if they

can realize.

1 http://www.faqs.org/abstracts/Human-resources-and-labor-relations/HR-in-growing-companies-Industry-standards-in-workplace-drug-testing.html

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2.2.3 Outsourcing decreases time consumption and reduces cost

In the recent years for some companies, outsourcing means reducing cost and less time

consumption. So, this is a good opportunity for outsourcing HR companies.

2.3 COMPETITORS

ROYAL EXECUTIVE SEARCH

This is the only competitor for BU Executive Search. The company is a human resources

management consulting company founded in March 1999. Their aim is building trustworthy

partnerships with each candidate and corporate alike, leading to consistent and reliable quality of

executive level selection and recruitment. Their biggest client is AKBANK. Also they work with

OTOKOC which is the largest automotive company in Turkey. Also they have some smaller

clients.

2.4 BARRIERS TO ENTRY

2.4.1 Brand Recognition:

Headhunting is a new industry for Turkish market and a lot of people know nothing about

the service until they see how it works. As brand recognition is low it needs high effort to

introduce the service to professionals.

2.4.2 CUSTOMER LOYALTY

The second barrier to entry is customers’ loyalty to the existence company. But also this

problem can be solved with introducing yourself professional and having strong contacts and

references. The owner Bilal Usta has many strong contacts because of his experiences.

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2.5 TARGET MARKET

BU Executive Search’s target market is financial investment firms and banks. BU has

expertise in staffing and recruiting. The company will be offering this market to help them to

find the best matches managers with the job requirements. These companies are always trying to

improve the quality of their service in Turkey. And they know quality comes with quality staff

and managers.

GROWTH OF TARGET MARKET

Because of the economical situation, the people think that all the industries are going

down. But according to 2008 financial statements, when all the major economies of the world

have many difficulties under the pressure of financial crisis, the banking industry in Turkey

continued to grow and foreign participation also increased. So, until 2012 analysts are expecting

high growth in the Turkish banking industry.

3. LEGAL STRUCTURE

BU Executive Search is a Limited Liability Company (LLC) registered in Istanbul,

Turkey. There are several different options to choose but LLC is the best option for BU. First of

all BU wants to secure the owner with limited liability so sole proprietorship is being eliminated

with this idea.

Other than limited liability preference, taxation is another reason to choose LLC among other

structures. According to irs.com LLC provides the benefit of pass-through taxation. As a small

business company, being a Limited Liability Company is the best option for BU.

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3.1 MANAGEMENT AND OWNERSHIP

Bilal Usta is the owner and he will be responsible for operational and financial

management, sales, marketing and promotion. HR manager is going to be responsible for

interviewing executives and in charge of the headhunters. Headhunters will be searching for

possible candidate from other firms. They will be finding the names and will ask them for

resumes. BU has a highly qualified owner and this is very important for a small business to

improve and expand. The owner Bilal Usta has barely knowledge about the human resources and

headhunting industry. He graduated from University of Istanbul in Business Administration.

While he was studying in university, he worked for Turkish Airlines in 2006 for one year as a

call center staff. And then he started work for Royal Executive Search as a headhunter. At this

time he learned a lot about the recruitment process and met many people who can be good

contacts in the future for him. Finally, he came to San Diego to study MBA in Southern States

University. So, after graduating MBA he decided to create this company. And he has a big self-

confidence about this business

.

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3.2 ORGANIZATIONAL STRUCTURE

4. PLACEMENT PROCESS

BU will be working on contingency basis means they will be paid after placement. How

does the placement process work?

a) Receiving job description, title and requirements

First of all, the client send the job description about what the person who will be hired

must do for company. At the same time they send the consulting firm who the candidate will

work for and who and how many people will be in charge of. Also the client sends the

qualifications of person to be hired.

BILAL USTA(OWNER)

HR MANAGER

HEADHUNTER HEADHUNTER

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b) Brain Storming

After receiving job description, title and requirements Bilal Usta starts to make a quik

research about industry and job. He searches which bank or firm is good at that field. And then

he calls headhunters and HR Manager for meeting. He tells about the opening and asks for ideas

individually about how to work on it. Everybody tells their opinions objectively and the others

talks about different ideas and make comments about them. So, this makes company creative and

open-minded. And they agree about how to work on it. Everybody takes some responsibility and

empowerment makes things happen easier.

c) Action time

After empowerment everybody starts to work on their tasks. Most of the time

headhunters try to reach the names of the people in the similar position who work for

competitors of the client’s. This part is the most difficult part of the task. Because when a

stranger calls a professional firm and asks for the names of their managers, they do not want to

share this information. So, at this point, headhunters should show their abilities. The best way to

reach names is saying white lies to them. Most common lie is calling them from a fake magazine

about the field that they are working on and lie about sending the magzine free to the managers.

By this way they can easily reach the names. After reaching names, other headhunter calls the

firm and same person answer the phone. So, now he/she can ask to talk with that person. When

the headhunter reach that person, he/she tells about the job opening without giving the name of

the client’s name. If the person on the phone is interested in the job opportunity, he/she sends the

resume to the headhunter.

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d) Interview

After receiving resumes HR manager analyses the resumes and decides to the person who is

going to be invited for interview. After the headhunters arrange the interview time, HR manager

interviews candidates. After that gives the resumes of chosen people by him for the second

interview. Then Bilal Usta interviews the candidates again. Than he decides who are going to be

sent to the bank to be interviewed. And their names and resumes are shared with the client.

e) Final Decision

After the client receives the names and resumes, they interview the candidates and final decision

is made by them. If they hire one of the candidate, BU gets the commission. Commision is one

month salary of the person hired.

5. STRATEGIES

5.1 MARKETING STRATEGY

PRODUCT: The company is in the service sector. So the product line will be upper, middle and

lower level managers.

PLACE: The office will be in Spring Giz Plaza. This location is convenient because of the

transportation. Most of the large firm’s headquarters are located in Maslak/Istanbul. So, for the

people who are already working, time is very important. So, this place is very close to the

business centers.

PROMOTION: If the person who is hired resigns or the company does not satisfies, BU will be

working on the same task again free. So, the quality is insured by the company.

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PRICING: It is going to be on contingency basis means that BU will be paid for placement as of

one month salary of the candidate’s.

In the first year there will be magazine ads in the economical magazines like CNBC-E

Business and Capital. Also Bilal Usta will join to the trade shows every two months. So,

this will provide him meeting with new contacts.

5.2 SALES STRATEGY

Interpersonal communication skills, getting references from satisfied clients, presentations

of the firm and services to potential clients are going to be the company’s sales strategy.

Giving the idea of the company’s values are: Confidentiality,commitment, collobaration,

trust should be aimed by HR manager and Bilal Usta.

5.3 SWOT ANALYSES

The following SWOT analysis captures the key strength and weaknesses within the company,

and describes the opportunities and threats that BU Executive Search will be facing

5.3.1 STRENGTHS

Well-educated Owner

Simple management

Our methodology

Large database

Sectorial know-how

Dynamic and young organization

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5.3.2 WEAKNESSES

Overwhelming possibility

Limited Budget

Not well-known as the competitor

5.3.3 OPPORTUNITIES

Desire of foreign investors

High growth is expected next 10 years

Economical crisis

Existence of high quality and strong banks in Turkey

The largest and most professional companies located in Istanbul

5.3.4 THREATS

Increasing competition

Criticism

Consolidation of Turkish banking sector

Big competitors

Possibility of new entries

Economical crisis

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6. FINANCIAL TABLES

OPENING DAY BALANCE SHEET

BU EXECUTIVE SEARCH     Assets   Liabilities & Net Worth         Current Assets   Current Liabilities  

Cash in Bank $ 50,000 Accounts Payable  

Inventory - Taxes Payable 1,200 Prepaid Expenses 5,000 Notes Payable (due within 12 months) - Other   Current Portion Long-term Debt -

Total Current Assets $ 55,000 Other current liabilities (specify) -

    Total Current Liabilities $ 1,200 Fixed Assets      Machinery & Equipment $ - Long-term Liabilities  

Furniture & Fixtures 10,000 Bank Loans Payable (greater than 12 months) $ -

Leasehold Improvements - Less: Short-term Portion - Real Estate / Buildings - Notes Payable to Stockholders - Other   Other long-term debt (specify) -

Total Fixed Assets $ 10,000 Total Long-term Liabilities $ -

           Total Liabilities $ 1,200                   Owners' Equity (Net Worth) $ 63,800        

Total Assets $ 65,000 Total Liabilities & Net Worth $ 65,000

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START UP EXPENSESCapital Equipment List

Furniture $10,000

Equipment 7,500

Fixtures -

Machinery -

Other -

Total Capital Equipment $17,500

Location and Admin Expenses

Rental $ 4,200

Utility deposits 200

Legal and accounting fees 700

Prepaid insurance -

Pre-opening salaries -

Other -

Total Location and Admin Expenses $ 5,100

Advertising and Promotional Expenses

Advertising $ 4,000

Signage -

Printing -

Travel/entertainment -

Other/additional categories -

Total Advertising/Promotional Expenses $ 4,000

Summary Statement

Startup Expenses

Buildings/real estate

Leasehold improvements

Capital equipment 17,500

Location/administration expenses 5,100

Opening inventory -

Advertising/promotional expenses 4,000

Other expenses

Contingency fund

Working capital

Total Startup Expenses $26,600

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ADVERTISING

Jan Feb March April May June Jul Aug Sept Oct Nov Dec Year 1

Total

Flyers                         0

Radio                         0

TV                         0

Trade shows 200   200   200   200   200   200   1,200

Magazines 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 48,000

Other                         0

Other                         0

Totals $4,200 $4,000 $4,200 $4,000 $4,200 $4,000 $4,200 $4,000 $4,200 $4,000 $4,200 $4,000 $49,200

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BALANCE SHEET

Balance Sheet  

BU EXECUTIVE SEARCH     Assets   Liabilities & Net Worth         Current Assets   Current Liabilities  Cash in Bank $ 82,605 Accounts Payable  

Inventory   Taxes Payable 1,210

Prepaid Expenses   Notes Payable (due within 12 months) - Other   Current Portion Long-term Debt - Total Current Assets $ 82,605 Other current liabilities (specify) -

    Total Current Liabilities $ 1,210

Fixed Assets      Machinery & Equipment $ 2,000 Long-term Liabilities  

Furniture & Fixtures  Bank Loans Payable (greater than 12 months) $ -

Leasehold Improvements - Less: Short-term Portion - Real Estate / Buildings - Notes Payable to Stockholders - Other   Other long-term debt (specify) - Total Fixed Assets $ 2,000 Total Long-term Liabilities $ -        

    Total Liabilities $ 1,210

    Owners' Equity (Net Worth) $ 83,395

Total Assets $ 84,605 Total Liabilities & Net Worth $ 84,605

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7. WHY SHOULD WE INVEST? Low start-up expenses

High profit margin

High potential for expansion

Simple business structure

Flexible pricing and possible promotions

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