SAMPLE COMPANY LLC Business Plan for E-2 Visa Contact: Applicant Email: Applicant@gmail.com
2 Table of Contents EXECUTIVE SUMMARY ............................................................................................3 THE E-2 VISA BENEFICIARY ....................................................................................5 THE U.S. COMPANY DETAILS .................................................................................5 Company Ownership ......................................................................................................6 Company Location .......................................................................................................... 6 INVESTMENT & FINANCIAL DETAILS .....................................................................7 Applicant Investment Details ..........................................................................................7 Financial Highlights ......................................................................................................... 7 BUSINESS DESCRIPTION ........................................................................................8 Customers ....................................................................................................................... 9 Stuffing Needs ............................................................................................................... 10 Operation costs .............................................................................................................11 Licensing and Permissions ...........................................................................................12 CAR HAULING MARKET OVERVIEW.....................................................................13 Market size ....................................................................................................................13 Market Drivers ...............................................................................................................14 Car Hauling Capacity Crunch...................................................................................14 Electronic Logging Devices Mandate.......................................................................14 Market Segmentation .................................................................................................... 15 By type of the clients.................................................................................................15 By type of the trailers ................................................................................................15 Competition ...................................................................................................................15 Competitive Edge .......................................................................................................... 16 STRATEGY & IMPLEMENTATION SUMMARY.......................................................17 Objectives ...................................................................................................................... 18 Marketing Channels ......................................................................................................18 MANAGEMENT SUMMARY ..................................................................................... 19 FINANCIAL PROJECTIONS ....................................................................................19 APPENDIX: YEAR 1 FINANCIALS BY MONTH.......................................................24 CONCLUSION ..........................................................................................................26
3 List of Tables Table 1 Major highlights .................................................................................................7 Table 2. Pay rates of employees .................................................................................11 Table 3. Calculation of personnel's wages..................................................................11 Table 4. COGS .............................................................................................................11 Table 5. Monthly general costs....................................................................................11 Table 6 Start expenses ................................................................................................17 Table 7 Revenue and COGS forecast ........................................................................19 Table 8 Unit forecast ....................................................................................................19 Table 9 Personnel forecast ..........................................................................................20 Table 10 Profit and Loss statement.............................................................................21 Table 11 Cash flow statement .....................................................................................22 Table 12 Pro forma balance sheet ..............................................................................23 Table 13 Cash Flow .....................................................................................................24 Table 14 Balance Sheet...............................................................................................25 List of Figures Figure 1 Financial highlights .......................................................................................... 7 Figure 2 Enclosed trailer ................................................................................................ 8 Figure 3 Open carrier ..................................................................................................... 8 Figure 4 Vehicles purchasing. ....................................................................................... 9 Figure 5 Car Shipping Industry Annual Turnover ....................................................... 13 Figure 6 The dynamics of sales of new and used cars since 2010 ...........................14
4 Executive Summary Most of the United States goods are transported by road; this is a vast and demonopolized market. It is relatively rigidly standardized, like all spheres of life in the United States, which creates equality of conditions for participants. But at the same time, it is well organized, reasonably simple in regulation and inspection rules, and free from corruption. Car transportation services companies are part of the automobile logistics industry, hauling vehicles over short and long distances. This kind of companies can be found in all states as long as there are automobiles there. Sample Company LLC is a modern hauling and logistics company operating in the United States of America. It is a new business basing in Viera, Florida, founded by entrepreneurs XXXX XXXXXand Applicant. The business will develop a reputation for its on-time and accurate service and sophisticated Web and software functionality.
5 The business will be managed by XXXX XXXXXas a CEO and Applicant as a Business Development and Marketing Director. Sample Company LLC launched for $XXX,XXX mainly with the investment of Mr. Applicant. The business will be established with two trucks and two trailers and will expand its operations to utilize six trucks by the end of its third year. Gross margins will be around XX%, allowing for significant profit by the end of the third year as the business scales up. Beyond four years, the business will seek to expand to purchase additional ten trucks and create a full-fledged dispatch service. Today Sample Company LLC has already registered; two pickups are bought, and we are ready to hire the necessary staff. The Company is going to start operations after all legal formalities are completed. The E-2 Visa Beneficiary Applicant will be a Business Development and Marketing Director of the Company. At this position, Applicant will be responsible for the following tasks: • Organization of the internal processes the best way; • Marketing of the Company services; • Managing a variety of online promotion, including social media, targeted advertising, content marketing, and Google AdWords; • Company CRM management and the relations with the strategiс customers; • Keep connections with potential clients and business partners. The Applicant will guide the Company's management and marketing strategy to maintain its effectiveness and competitive abilities. As the Business Development and Marketing Director of the Company, Mr. Applicant will use his business experience to make the Company a strong player in the interstate hauling market. Mr. Applicant possesses a bachelor in Jurisprudence. He is a media and marketing expert with over 16 years of digital media agency management and business development experience. From 20XX to 20XX, Mr. Applicant was a managing partner or CEO at several digital advertising agencies. He gained experience in projects ranging from planning the clients' media strategy to building his own media agency with comprehensive services.
6 The U.S. Company Details Sample Company LLC is a company, which provides services for car transportation. The Company registered in XXXXX State on August XX, 20XX. Company Ownership Sample Company LLC is owned by XXXX XXXXX(40%) and Applicant (60%). XXXX XXXXX and Applicant are both Kazakhstan nationals. XXXX XXXXX has more that two years experience in the car hauling business in the U.S. This is the important thing to have such a experience business partner who is making sure to start the business off right. Doing the right tasks in the beginning so the company can be on its way to car hauling success. XXXX XXXXX will contribute her services to the common company based on expertise and business skills. Company Location Sample Company LLC will maintain a physical office in the following location: XXX, XXXX/ XXXX.
7 Investment & Financial Details Applicant Investment Details The Applicant will contribute $XXX,XXX of personal capital, equal to 100% of the Company's initial funds. Financial Highlights The following table and graph illustrate the business goals of the Company during the next five years: Table 1 Major highlights 2020 2021 2022 2023 2024 2025 Total Revenue Gross Margin Operating Expenses EBITDA Net Profit Profitability Ratios Gross Margin/ Revenue EBITDA/ Revenue Net Profit % Net Cash Flow Cash Balance Ending Figure 1 Financial highlights
8 Business Description Sample Company LLC will provide car transportation services to its customers. Hauling services will be provided with pickup trucks equipped with enclosed trailers (Figure 2). We are supposed to transport cars in enclosed trailers by the price of open-carriers (Figure 3) to compensate for possible empty miles. If to compare, open trailers' advantages are lower investment costs, and the disadvantage is the low cost of hauling the cars. The situation with enclosed trailers is precisely the opposite - higher trailer price and more expensive transportation. We are going to focus on enclosed trailers hauling. Figure 3 Open carrier Figure 2 Enclosed trailer
9 The Company plans to start work with two trucks. We shall purchase more trucks in 2023 and 2025 years (see Figure 4). This plan will let the Company expand its business and generate additional income. From 2025 we will reach the maximum possible productivity and will create a full-fledged dispatch service. Customers The Company will aim to provide its services for a wide range of clients, including individuals, online auction brokers, car traders, etc. Our priority is fully satisfied customers. To support the high satisfaction rate, we will be continually working in the following areas: • to ensure the safety of your vehicle throughout all aspects of the transportation of cars; • to set prices which are realistically estimated by the information of the auto transportation services to fit the budget of our customers; • Our reliable staff is a phone call away, giving daily updates with a time-stamped schedule to provide full control over the delivery process and trucks and transportation equipment conditions. Figure 4 Vehicles purchasing.
10 Pricing and revenue The price for car hauling differs for open and closed transportation services. The open-trailer rate is $X.X per mile for business miles driven, for enclosed - $X per mile. Revenue is forecasted as follows: The average speed for trucks traveling between states in the U.S. is XX.XX mph1. Multiplying it by the permitted driver working hours (XX per day), we get the average distance for car transportation per day. We multiply this value by the price of X mile of transportation. We estimate that enclosed trailer hauling will take XX% of our orders, while open carrier hauling will take only XX%. Thus, we get the price for one day of car transportation. Multiplying this value by XX, we get the revenue of one truck per month. On average, one pickup truck will transport XX vehicles per month. On one trip, a pickup truck transports two cars. So one pickup makes XX trips per month. By dividing our services per month by the number of transports made per month, we get the price for one trip. As a result, the car transportation service will cost $X,XXX per X trip. Stuffing Needs The number of employees in our managing team will vary depending on the number of pickups owned by the Company. While the Company owns fewer than XX pickups, the crew consists of 3 people: • CEO (1 employee) • Business Development and Marketing Director (1 employee) • Third-party dispatcher (1 employee) Besides them, the Company will hire drivers. Each driver will be assigned to one particular pickup with a trailer. Thus, in 2020 and 2021, the Company will employ two drivers. In 2023, the Company will buy four trucks and hire four additional drivers. Third-party dispatcher services will be paid until the Company owns XX pickups. At the time when the Company acquires XX trucks, we will create a full-fledged dispatch service. When the Company owns XX pickups, the project team will consist of 23 employees: • CEO (1 employee) • Business Development and Marketing Director (1 employee) • Own dispatcher (3 employees) • Sales Manager (1 employee) 1 Source: Statista.
11 • Office manager (1 employee) • Driver (16 employees) Dispatchers and drivers salaries are calculated as a percentage of revenue. The table below shows the pay rates of dispatchers and drivers. Table 2. Pay rates of employees Pay rate Third-party dispatcher Own dispatchers Drivers Table 3. Calculation of personnel's wages Wages per month, $ CEO Business Development and Marketing Director Sales manager Office manager Third-party dispatchers Drivers Own dispatchers Operation costs The Company operating costs consist of COGS and general expenses. Detailed costs information about the composition of costs can be found in tables 4 and 5. Table 4. COGS Expenses per mile Petrol Table 5. Monthly general costs Value per month Commercial insurance Other expenditures Office rent
12 Licensing and Permissions The Company will need to complete the following legal formalities on the FMCSA (Federal Motor Carrier Safety Administration) website to operate: 1. To obtain a USDOT Number, 2. To obtain an Interstate Operating Authority (MC number). The USDOT Number serves as a unique identifier when collecting and monitoring a company's safety information acquired during audits, compliance reviews, crash investigations, and inspections. Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the FMCSA to obtain a USDOT Number. The FMCSA monitors and ensures compliance with safety (all carriers) and commerce (for-hire carriers). Additional to the USDOT number, companies that operate commercial vehicles need to have Interstate Operating Authority (MC number). In general, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a USDOT number: • Transport passengers in interstate commerce (for a fee or other compensation, whether direct or indirect) • Transport federally-regulated commodities owned by others or arranging for their transport (for a fee or other - compensation, in interstate commerce).
13 Car Hauling Market Overview Market size Over the five years to 2020, the Vehicle Shipping Services industry has experienced varied trends but has improved overall. Operators use different ways to transport vehicles, such as cars and motorcycles. Up until the onset of COVID-19, low unemployment, and improving income levels in the United States caused consumer spending on vehicles to increase, leading to increased demand for vehicle shipping services. The freight transportation services index, a measure of freight trafficking volume, grew at an annualized rate of 2.79%. As a result, industry revenue is expected to be $11.9 billion at the end of 20202 (see Figure 5). Car hauling companies carry out “last mile” car delivery and, as a result, directly depend on the situation on the car market. Figure 6 shows the dynamics of sales of new and used cars since 20103. The data presented show a slow decrease in new car sales since 2016 (CAGR -0,86%). However, sales of used cars are growing at a CAGR of 2,27%. Therefore it is expected that the market for this industry will continue to grow over the next five years, despite the push for self-driving cars and trucks. 2 Source: IBISWorld “Vehicle Shipping Services in the U.S. industry trends (20XX-2020)” 3—source: Statista. Figure 5 Car Shipping Industry Annual Turnover
14 Market Drivers Car Hauling Capacity Crunch The capacity crunch is an auto industry freight term referencing to diminishing capacity for shipping. This because there is a lack of people entering the freight industry4. So, when people retire or leave the industry and don't get replaced right away, the overall ability to ship something decreases slightly. It is occurring in recent years, and the auto hauling industry is under its effects. Capacity Crunch is likely caused by a low unemployment rate and a general decreased interest in the car hauling industry. Though the situation is not critical, it is an excellent time to enter the business. Electronic Logging Devices Mandate This government regulation had been grandfathered into the freight industry and at full scale in 2019. It requires all motor carriers in the freight industry to have devices installed that automatically track drivers' hours driven/worked. This is to prevent drivers from driving too much, which increases the potential for an accident. 4 Source: The Weekly Driver Magazine, “Trends Now Affecting Auto Transport Industry," 2019 Figure 6 The dynamics of sales of new and used cars since 2010
15 ELD has the potential to cause a slight increase in price and the duration of your car shipment. If drivers can't drive an extra hour or two each day (which they routinely used to do), it will take longer to complete the trip, increasing the cost. Market Segmentation There are several market segments in the hauling industry in the U.S. By type of the clients The clients oа the hauling companies are: • Automobile wholesalers • Car Dealers • Car rental companies • Logistic companies • Individual car owners By type of the trailers Тhеrе аrе twо tуреѕ оf саrѕ haulers іn thе mоdеrn еrа, оnе саn bе еnсlоѕеd, аnd аnоthеr оnе іѕ ореn. The open car trailers amounts to almost XX% . Тhе mоѕt mаrkеtаblе саr trailers have buіlt-іn rаmрѕ fоr оff-lоаdіng аnd lоаdіng vеhісlеѕ, аlѕо роwеr hуdrаulісѕ tесhnоlоgу tо lоwеr аnd rаіѕе rаmрѕ fоr ѕtаnd-аlоnе ассеѕѕіbіlіtу. Competition Our Company will compete in the market with the same companies which provide the same car hauling services. About X,XXX companies in the car hauling industry (this figure has grown by X.X% between 20XX and 20XX), employing more than XX,XXX people in various roles. Another group of the Company's competitors is drivers who lease hauling vehicles from large logistics companies. These drivers mainly work in these companies' business, but they can also look for orders on the open market. The third group of competitors is companies that rent pickup trucks with trailers for shortterm rent to individuals. Typically, these people carry their cars; however, they might be the Company's customers.
16 Competitive Edge Competition in the car hauling market lies in the area of secondary business activities. Either external or internal factors limit competition in root activities. All competitors use the same cars and roads and use the same amount of fuel. Also, the law even prohibits competition due to the intensity of the work of drivers. Competition in the car hauling market aims to obtain the most profitable orders with the lowest marketing costs. And Applicant is an experienced specialist in this area. The task of reaching customers with minimal commissions or advertising costs corresponds to his competence and will be effectively solved. The second competitive advantage of the Company lies in the IT-sphere - it is route optimization, cost control, and strict adherence to budgets. Applicant understands all the necessary software programs and the principles of settings and use it and will be able to make the Company one of the most effective in the state.
17 Strategy & Implementation Summary Our Company plans to start a business as a company providing car transportation services in October of 2020. The start expenses are in Table 5: Table 6 Start expenses Item of expenditure Cost ($) Company registration All-State Freight Licenses Pickup Trailer Commercial insurance Equipment Reserve capital Legal and business consulting fee Total We plan to recruit the personnel within one month. After that, our Company will be ready to proceed with work. We will recruit additional staff gradually as the number of trucks grows. See the number of trucks owned by the Company in Figure 10. Our revenue will grow accordingly. Figure 10 Forecasted number of trucks owned by the Company
18 Objectives • Establish a central office in Florida; • Utilize the hauling services capacity deficits in the U.S. to get a reliable market position; • Acquire all the necessary assets for the Company market success, such as the strategic clients; advanced software, qualified personnel, business connections; • Generate enough revenue to expand operations; • Further business growth and development; Marketing Channels Sample Company LLC will use various marketing channels to reach the customers and offer them hauling services. Brokers: Brokers are the middle-men between shippers and haulers. Because shippers are not in the auto transport industry, finding carriers is a challenge for them. Often this means shippers hand over car logistics offers to brokers instead, who then find carriers. Website. As Applicant is a specialist in digital advertising, the Company will use his knowledge and experience. We plan to develop a website with a modern design and optimized for Google promotion. When developing it, all Google recommendations will be taken into account. Including - Page Speed Insight, which will ensure fast loading of the site for visitors. It will have a positive effect on the site's place in the search results. We shall also optimize the Company's website for mobile devices so that potential customers can easily visit it at any time. Social Media The Сompany will create pages with useful content on Facebook and Instagram and use targeted ads to attract visitors. Traditional media The Company will use promotion in traditional media from time to time, mostly in local or professional media.
19 Management Summary The management structure of the Company will be as follows: XXXX XXXXXis CEO, and Applicant is Business Development and Marketing Director. CEO will also be responsible for the work coordination with the third-party dispatchers who are out of the company structure until the Company create its own a full-fledged dispatch service. Financial Projections The following is a five-year revenue forecast. Direct costs include all costs which can be directly tied to revenue. Table 7 Revenue and COGS forecast 2020 2021 2022 2023 2024 2025 Revenue Car transportation Total Revenue Direct Cost of Revenue Petrol Total Direct Costs Gross Margin Gross Margin/Revenue The table below shows the units and pricing assumptions underlying the revenue forecast: Table 8 Unit forecast 2020 2021 2022 2023 2024 2025 Units Car transportation Total Units Unit Price Figure 11 The Company management structure
20 For the first two years, our Company plans to work with two trucks. After gaining experience, the Company is going to purchase four additional trucks. And in the fourth year of the company operation, we will expand our trucks to XX units. From 20XX we will reach the maximum possible productivity and will create a full-fledged dispatch service. Due to the increase in productivity, the Company's revenue will also grow year-by-year (see Figure 12). The Company's personnel forecast is outlined below. Personnel wages indicate the average salary per position, and personnel costs are total wages for each job. Table 9 Personnel forecast 2020 2021 2022 2023 2024 2025 Year-end personnel count CEO Business Development and Marketing Director Sales Manager Office manager Third party dispatcher Driver Own dispatcher Total personnel CEO ($ per month) Business Development and Marketing Director ($ per month) Sales Manager ($ per month) Office manager ($ per month) Third party dispatcher ($ per month) Driver ($ per month) Own dispatcher ($ per month) Personnel costs CEO Business Development and Marketing Director Sales Manager Figure 12 Annual revenue
21 2020 2021 2022 2023 2024 2025 Office manager Third party dispatcher Driver Own dispatcher Total costs The Company intends to deploy its funding to maximize growth and profitability. In the Profit and Loss table below, gross margin equals revenue minus direct costs. The "bottom line" or profit (as measured before and after interest, taxes, depreciation, and amortization) equals gross margin minus operating expenses. Table 10 Profit and Loss statement 2020 2021 2022 2023 2024 2025 Gross revenue COGS Salary and wages General costs Other expenditures Total costs Earnings before interest, taxes, depreciation, and amortization Amortization Earnings before interest and taxes Interest paid Profit before taxes Federal self-employment tax Federal net income tax State (PA) net income tax Net profit Profit accrual
22 The chart below demonstrates when the Company is expected to become profitable. Break-even occurs when revenue equals expenses. According to the financials, month one will be the point at which break-even will occur. The following depictions of the Company's projected cash flow show that the Company expects to maintain sufficient cash balances over this plan's five years. The "pro forma cash flow" table differs from the "pro forma profit and loss" (P&L) table. Pro forma cash flow is intended to represent the actual flow of cash in and out of the Company. In comparison, the revenue and expense projections on the P&L table include "non-cash" items and exclude funding and investment illustration. Table 11 Cash flow statement 2020 2021 2022 2023 2024 2025 Cash at the beginning of the period Cash received from customers COGS Operating profit margin Salary and wages General costs Interest paid Taxes Cash flow from operating activities Land Building costs Purchase of equipment Other expenditures Cash flow from investing activities Figure 13 Break-even analysis
23 2020 2021 2022 2023 2024 2025 Proceeds from capital contributed Proceeds from loan Payments on loan Cash flow from financing activities Net cash flow FCFF Cash at the end of the period The balance sheet below highlights the Company's projected assets, liabilities, and capital: Table 12 Pro forma balance sheet 2020 2021 2022 2023 2024 2025 Assets Fixed assets PP&E Investments inprogress Current assets Accounts receivable Inventories Cash TOTAL ASSETS Equity and liabilities Owner's equity Capital stock Retained earnings Long-term debts Long-term debts Short-term debts Short-term debts Accounts payable Taxes payable TOTAL EQUITY AND CAPITAL
Appendix: Year 1 Financials by Month Table 13 Cash Flow Month 1 2 3 4 5 6 7 8 9 10 11 12 Cash at the beginning of the period Cash received from customers COGS Operating profit margin Salary and wages General costs Interest paid Taxes Cash flow from operating activities Land Building costs Purchase of equipment Other expenditures Cash flow from investing activities Proceeds from capital contributed Proceeds from loan Payments on loan Cash flow from financing activities Net cash flow FCFF Cash at the end of the period
Table 14 Balance Sheet Month 1 2 3 4 5 6 7 8 9 10 11 12 Assets Fixed assets PP&E Investments inprogress Current assets Accounts receivable Inventories Cash TOTAL ASSETS Equity and liabilities Owner's equity Capital stock Retained earnings Long-term debts Long-term debts Short-term debts Short-term debts Accounts payable Taxes payable TOTAL EQUITY AND CAPITAL
Conclusion Let's summarize the data presented above: • The industry of car shipping is growing, with a moderate CAGR of 5%. • The project's investment period is short, and the Company may start working at the end of 2020. • Company owners invested $XXX,XXX, and the Company will reach a breakeven point in the 1st month. The total Company profit will $XXX thousand, big enough to make the investment idea attractive. Based on all the above, it can be concluded that financing the project is a productive investment with low risk.
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