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Table of Contents • Executive Summary .................................................................................................................. 3
• Description of Business ............................................................................................................. 4
• Business Model Description ............................................................................................... 4 • Objectives ........................................................................................................................... 5 • Mission Statement ............................................................................................................. 5 • Keys to Success................................................................................................................... 6 • Company Ownership/Legal Entity ..................................................................................... 6 1. Location .............................................................................................................................. 7 2. Interior ............................................................................................................................... 7 3. Hours of Operation ............................................................................................................. 9
4. Start-up expenses ...................................................................................................................... 9
5. Management and Staffing ...................................................................................................... 10
6. Staffing .............................................................................................................................. 10 One Full-time Office Manager: ............................................................................................ 10 One Full-Time administrative assistant: ............................................................................... 11
1. Management .................................................................................................................... 12 2. Products and Services .............................................................................................................. 12
3. Pricing and fees ................................................................................................................. 14 • Market Research ..................................................................................................................... 15
1. Market trend and Potential ............................................................................................. 18 • Marketing Strategies ........................................................................................................ 19 • Market segmentation ...................................................................................................... 18
1. Competitors ............................................................................................................................. 20
• SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis ......................................... 20
• Strategy and Implementation Summary ................................................................................ 21
• Risk management ................................................................................................................... 21
• Financial Analysis .................................................................................................................... 21
• Cost Analysis .................................................................................................................... 21 • Break-Even Point Analysis ................................................................................................ 21 1. Return on Investment (ROI) .............................................................................................. 21
Appendix 1-- Service Package…………………………………………………………………………………………………..23
Appendix 2 – Financial Documents ............................................................................................... 25
Appendix 3 -- Potential clients' expression of interest forms (PDF file)………………..…………………..30
References: ................................................................................................................................... 30
Executive Summary
The purpose of this business plan is to develop a blueprint for All-time offices Inc. vision and
strategy and then use this plan as a guide to design and grow the business.
The primary objective of All Time Offices Inc. is to establish as a prosperous and innovative
player in Montreal’s short term and long term office space renting and also Co-working space
industry. With its smartphone application and an easy-to-use website that offer the possibility
of booking working spaces in real time along with highly diversified packages of renting options,
All Time Offices will be a key shared office space rental business in Montreal downtown area.
This will be the starting point of ATO and it will be expanded to the other parts of Montreal,
other Canadian cities such as Toronto, Vancouver and eventually international branches in Los
Angeles, Seattle, New York, etc.
Being the second leading business center in Canada and one of the most important business
hubs in North America, Montreal is well situated to start small and medium size firms and start-
ups. In recent years, the growing number of technology-based start-ups which are run by one
or a few persons has changed the concept and needs for the workplaces. Committing to office
space can be a huge outlay for this type of fast growing and budget conscious businesses which
can be run even from home. The flexibility of renting fully-furnished office places with the
required space and length of time can improve the cost effectiveness of launching these kinds
of businesses.
We have already found and are going to buy a commercial condo commercial at 4055 St.
Catherine West, Westmount, Quebec (adjacent to Alexis Nihon Complex) for starting the first
business center.
we will be focused on building a strong connection with all potential clients by different
marketing methods. Even though there are many shared office space companies in Montreal,
ATO does have a competitive advantage of unique business model in the fast-growing need for
this kind of office spaces and an expert team of management with 15 years of experience
managing different small and medium businesses in two separate countries, excellent
communication skills and using cutting-edge technologies will assist ATO in gaining a significant
market share in this industry.
Based on our expert team's research and experience in this field I anticipate first-year sales
income to be around $ 480,000. The location will cost $665,000 and
To improve the property, decorate it, buying furniture, creating website and application and
etc., almost $835,000 is needed.
Description of Business
With the shift in the global economy and North America cultural values, the idea of what it
means to succeed has changed dramatically. Far from the previous idea of working the same 9-
to-5 job until you retire, modern workers are looking for a way to use their creative abilities to
build careers they truly love. Work and happiness are no longer mutually exclusive, and the
new generation of workers thrive off of interaction with other creative builders. The office-
cubicle standard has fallen by the wayside, and Co-working space concepts swiftly stepped in to
fill the void.
A company which is in the business of renting shared office and Co-working spaces purchases
real estate space – sometimes just a floor or two in an office building – and transforms it into
smaller offices and common areas. It rents desks to individuals or groups who want the benefits
of a fully stocked office without the traditional office culture, and private offices to the business
who need more private and custom made places. Members range from independent
freelancers who need an occasional place with unlimited Wi-Fi to focus on a deadline to small
businesses with multiple employees who need a consistent place to work, have meetings and
build their budding empires.
The rising popularity of the sharing culture that created companies such as Uber and Airbnb is
undoubtedly a significant component of Co-working space success. Instead of working from
living rooms or coffee shops, working in a trendy environment with like-minded entrepreneurs
and potential of meeting new people and networking will lead to a greater rate of success.
Business Model Description
There are some different types of business model for a firm working in the field of shared space
office renting, but with the new trend in the way new generation work, these different types
are converging rapidly. The office spaces range from private office, furnished or unfurnished,
which accommodate one to several employees, shared Co-working spaces with a dedicated or
not dedicated desk, to just having a virtual office with permission to use facility address for the
business and profiting from some other services such as using meeting rooms or phone
numbers. Entrepreneurs choose the type of office they want and pay only for what they need.
This will save them from the hassle of committing to a long-term contract and buying all the
necessary furniture and equipment for that office.
Objectives
The objectives of All Time Offices Inc. are:
To increase the number of clients by 20% per year.
Achieving a minimum of 95% customer satisfaction rate to establish long-term relationships
with our clients.
Increasing the revenue by keeping the cost constant.
Mission Statement
All Time Offices is a venue that provides a unique facility with an innovative atmosphere to
prosper small and medium businesses. The mission is not only to provide great office and co-
working spaces, but also have efficient and friendly service. Our environment is not only
welcoming and sophisticated; it is unique in design.
We concentrate on customer satisfaction and quality office supplies. We want the All Time
Offices Inc. to be a place people can enjoy a warm working space and meet new like-minded
people and have a good networking possibility.
Keys to Success
All Time Offices’ keys to long-term survivability and profitability are as follows:
Differentiate our services so that our clients realize that we can better serve their needs
than a competitor.
Keeping close contact with clients and establishing a well-functioning long-term
relationship with them to generate repeat business and a top-notch reputation.
Establish a comprehensive service experience for our client that includes seminars,
presentations and networking possibilities for them.
Company Ownership/Legal Entity
All Time Offices, Inc. is registered under the law and regulations of Canada, Quebec and will
fundraise through selling its shares to the potential stockholders.
From 100 shares of ATO it is planned to sale 80 shares to the eligible investors, each share for
$17,000 with the minimum purchase of 10 shares per person, the remained 20 will be bought
by the founder with the price of 10, in compensation of all administrative activities, business
startups as well as one year management, supervision and handling.
with growing the business and establishment of other branches, investors should increase their
investment or agree with decrease part of their shares.
Location
ATO will start the business in downtown Montreal, near its financial district and most important
businesses of the town.
Interior
The facility has around 5500 square feet of area and includes the following spaces:
Private offices — 12 small offices (for one person), 4 medium offices (for two persons)
and one large office (for three persons)
Co-Working Spaces — 6 Share able (Hot Desks) and 5 dedicated desks
One meeting room and One conference room
Reception and lounge
Printing and scanning rooms
Private phone booths
Coffee shop
6 x Hot Desk 125 sqf 5 x Dedicated Desk 223 sqf 12 x Small Office 1266 sqf 4 x Medium Office 679 sqf 1 x Large Office 249 sqf
Total Office Area 2542 sqf
1 x Coffeeshop 407 sqf
Total Coffeeshop Area 390 sqf
1 x Meeting Room 155 sqf 1 x Conference Room 240 sqf
Total Meeting Area 395 sqf
Reception and Lounge 428 sqf
Total Reception Area 428 sqf
3 x Phone Booth 44 sqf Copy / Print Station 43 sqf
Electrical Cabinet 18 sqf Server Room 28 sqf Janitor Room 18 sqf Toilets 175 sqf Lockers 60 sqf Coffee and Microwaves 66 sqf
Total Service Area 452 f
Hours of Operation
The regular operating hours for All Time Offices Inc. will be from 8 a.m. to 6 p.m., from Monday
to Friday. However, it will be possible to book all the office areas out of this regular hours by
using the website or the application. After hour access would be available for all tenants, upon
request.
Start-up expenses
The real state (office) purchase will be the first expense of the company. The next item is the
renovation and decoration costs for the transformation of the office area. The cost of creating
and maintaining company’s website and the application will be another significant investment
need.
Here is a list of the initial estimated expenses/investments for starting this business in
Montreal, QC.
Start-up Costs Items Cost
Buying office area property $665,000
Renovation and decoration expenses $510,000
Website and Application $100,000
Office supply and furniture $100,000
Computer and Printers $70,000
Marketing $15,000
Working Capital $40,000
Start-up costs $1,500,000
Management and Staffing Management; Ali Mokhtari's philosophy is based on responsibility and mutual respect. His proficiency in
managing companies which includes starting up business, purchases, hiring & firing,
cooperation with all kind of different clients would be an intangible asset to run the business.
He has a valuable experience as a manager of an immigration consulting company and some
other small businesses in different fields. He also will benefit from his professional management
team such as accountants, marketing managers and etc. for a more scientific fruitful
management to make efficient communication with clients and maintain high customers’
satisfaction level.
He will be the president of All Time Offices with the below mentioned as part of his
responsibilities, but not all:
- hire the necessary staff to make the company an efficient and prosperous firm in the field of
renting shared office spaces in Montreal, Quebec.
-Designs and implements office policies by establishing standards and procedures and
supervising their implementation; measuring results against standards; making necessary
adjustments.
- Achieves financial objectives by preparing an annual budget; scheduling expenditures;
analyzing variances; initiating corrective actions
Staffing
Full-time administrative clerk;
He/She is responsible for facilitating the efficient functioning of the office through a range of administrative, clerical, financial and managerial tasks. Responsibilities; - Maintains office services by organizing office operations and procedures; controlling correspondence; designing filing systems; assigning and monitoring the use of the facility by members. - Provides historical reference by defining procedures for retention, protection, retrieval, transfer, and disposal of records. - Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies - Delivering continuous required reports to the president/ manager
- Keeps management informed by reviewing and analyzing special reports; summarizing information; identifying trends - The Administrative clerk will also provide administrative support including handling mail, ordering office supplies and coffee, as well as greeting clients, answering telephone calls and organizing meeting with people off-site and on-site.
Qualifications: - College education in administrations or equivalent; - Minimum 3 years of relevant experience - Strong communication skills, and a love of working with people as well as passion for helping clients - Able to prioritize while handling multiple tasks; - Demonstrate ability to develop long-term relationships with clients - Strong time management and follow-through skills Annual Salary $40,000
Job Titmanager le QTY Annual Salary CAD$
Manager and supervisor
1
one years for free $50,000 from the second year
Administrative Clerk 1 $40,000
TOTAL 2 $40,000/$90,000
Products and Services
The primary revenue center for the business is acquiring a shared office building properties
with the intent to divide it into several office spaces and Co-working areas and rent them to the
entrepreneurial community. The business will generate profits from the ongoing rental income
paid to All Time Offices by long-term clients, short term office and desk rental, virtual office,
and other services.
All the clients must become a member of the facility through website or smartphone
application by providing their required information and paying a monthly membership.
The following working spaces and services will be offered in All Time Offices Inc.
Office spaces
An office space can accommodate between 1 to 3 persons. They can be non-furnished for
dedicated and contract-based rental. With an extra charge and for all short-term office rentals,
we have fully furnished offices. The offices are in a private, lockable spaces and the furnished
ones have desks, chairs and filing cabinets.
Our private office spaces are available in flexible manners:
Rent an office with an annual contract. This option comes with a discounted price and
some other advantages.
Take a space you need and expand or contract as business change (the possibility of
making change in term of contract)
Cost-effective office space with the flexibility to use as little or often as needed (certain
days per month).
Get on-demand access to work-ready office space with no commitment - available by
the hour using All Time Offices App.
Co-working spaces Co-working options offer a sociable way of working in a communal workspace, with flexible
possibility that people pay only for what they use.
Our Co-working spaces are accessible in different ways:
Dedicated Co-working space consists of a personal desk and storage facilities in a
professional, shared environment.
Open Co-working space that provides clients with desk space in a professional, shared
environment on a first come first served basis.
Virtual office option In this option, customers can create the right image for their businesses with a prestigious
address and a range of supporting services such as mail handling services, fax services and even
a phone service with the call answered in their company name and a 24/7 access to their
voicemail.
ATO is planning to establish a virtual assistant service to complete the package of services in the
close future too.
All the fully furnished private offices and Co-working spaces include an equipped workspace,
simple turn up, plug in and get straight down to business along with modern, ergonomic office
furniture. Tenants also have the possibility of getting unfurnished private offices. There will be a
coffee shop available with an extra access for tenants. In addition, there will be a free coffee
stand in shared space. All our members can use our community meeting rooms by the hour.
There will be some arrangement for events, seminars and presentations to give the possibility
of networking to all the members.
Pricing and fees
Here is the list of all fees and prices:
Service Cost
Basic Membership Enables client to use the app and reserve desk/office/meeting rooms
50$/Month
Virtual Office Basic membership + Client will use the address, fax and etc.
Starting from199$/Month
Hot Desk (Open space desk) Client has the right to use specific desk for needed time upon reservation online subject to availability of desks
Starting from 349$/Month
Dedicated Desk Client benefit from a dedicated desk and can use it anytime
Starting from 499$/Month
Private Office Client benefits from a closed office
Starting from 799$/Month
Meeting Room Available to members according to the package and upon online reservation
15$/Hour
Conference Room Available to members according to the package and upon online reservation
25$/Hour
Dedicated Phone Number A phone number will be assigned to the client
55$/Month
VIP Secretary Service Starting from 500$/Month
Print Service Pay Per Usage
Coffee shop Space will be rented to a professional Coffee Shop operator
1500$/Month
By paying a membership fee, there is also the possibility of renting private offices, Co-
working desks and meeting rooms on an hourly basis.
The monthly fees for private offices and Co-working desks include membership and
some credit for using meeting rooms.
The rental fees for the offices which accommodate more than one person will be based
on 76$ per square foot (unfurnished).
All the available packages are listed in Appendix 1.
Market Research
Office sharing is a concept that allows companies who own or manage an office, which has
redundant office space to share or rent the workstations or self-contained units to smaller
companies looking for flexible workspace. This creates revenue for the company that runs the
office and provides a cheap, flexible alternative for companies looking for an office outside of
their home. The main benefit of sharing an office is that it provides a more dynamic
environment for both companies involved and access to new markets. This idea became the
concept of an important business that gets a large office area and transforms it to small offices
and some Co-working spaces and rent them to the businesses to help them to avoid lots of
their initial investment costs and overheads.
Ten years ago, co-working spaces were a new concept, providing shared desks for freelancers
and entrepreneurs as single “mom and pop” shops. Today, the one-off spaces have been mostly
replaced with chain companies, providing real estate developers a new way to lease traditional
office space and make connections with potential tenants. Feeding off the tech start-up boom
and the increased mobility it allowed workers, co-working spaces took off — attracting lonely
home-office dwellers out of their pajamas and sparing coffee shop-based freelancers an
obligatory purchase of a cup of coffee in exchange for an all-day workstation.
Globalization and technological change have transformed work relations over recent decades.
One conspicuous feature of these changes is the rising prominence of ‘non-standard work’ in
developed economies. The non-standard term work covers all work not done full time or not
performed at the place of an employer’s choosing under their direction. It is a broad and
heterogeneous class of labor relations that spans precarious contract workers and affluent
entrepreneurs. The fastest growing category of non-standard work across OECD countries over
recent years is in self-employment without employees, or ‘solo self-employed’, particularly in
high skilled, rapidly growing, creative areas of the economy.
Co-Working spaces – a “Plug and Play” type of personal office
Co-working is a style of work that involves a shared working environment, often an office, and
independent activity. Unlike in a typical office environment, those co-workings are usually not
employed by the same organization. Typically, it is attractive to work-at-home professionals,
independent contractors, or people who travel frequently and end up working in relative
isolation. Co-Working is also the social gathering of a group of individuals who are still working
independently, but who share values, and who are interested in the synergy that can happen
from working with people who appreciate working in the same place alongside each other.
A selling point of most co-working spaces is networking. Future “members” are attracted to the
diverse pool of businesses and possible mutually beneficial connections to be made in a shared
community.
Shared offices have become a billion-dollar industry in recent years, with offices even opening
in exotic European and Middle-Eastern locations. However, much of the growth has been
throughout the US and Canada, where start-ups are more prevalent. Technology-based Start-
ups hardly can afford to rent their own office, but they usually still require the necessities of an
office space. Shared offices allow them to use the services they need while staying within their
budget. These services can include access to meeting and conference rooms, technology such
as photocopiers and high-speed Internet, and amenities like free coffee. However,
opportunities for networking offer one of the biggest perks.
Even established companies are beginning to use shared workspaces for their employees to
test out different markets and find new talent pools. They have appeal for a broad range of
workers, so they will only continue to grow in popularity in the years ahead.
Co-working offers a solution to the problem of isolation that many freelancers experience while
working at home, while at the same time letting them escape the distractions of home.
With well over 2,000 co-working spaces now operational worldwide and new spaces opening
their doors almost every day, it is imperative that owners and community managers set high
standards. This is important not only for the fulfillment of space's mission and the delivery of a
positive co-working experience but also the longevity of the business.
This category of work includes independent contractors selling professional services
(‘freelancers’) and early stage entrepreneurs developing new products. A commonly cited
explanation for the growth in self-employed solo work is the declining start-up and transaction
costs incurred through managing micro enterprises. Many of the reasons for these declining
costs, such as mobile communication technologies, Internet penetration and the digitization of
work, have also changed the relationship between knowledge work activities and fixed office
locations. Today most independent knowledge workers that own a laptop, smartphone and can
access the internet have all the tools necessary to undertake work from their home, or other
low-cost sites like cafes and public libraries. Rational actors would be expected to reduce any
unnecessary costs of doing business, and avoiding paying rent for office space would seem a
prime candidate. And yet empirically we observe many of these workers paying to regularly
access co-working spaces. Since their inception a decade ago, co-working spaces have been
growing extremely rapidly in major cities around the world. The fact that the primary customers
of co-working spaces are the mobile, independent knowledge workers we have described so far
presents a puzzle: why pay for access to office facilities if there is no need?
The conventional answer is that working from home is suboptimal for several reasons,
principally because social isolation can cause psychological strain that, amongst other things,
reduces productivity. Paying for co-working services is discussed in the literature as a remedy
for this ailment by providing routine access to social relationships in the form of a “like-minded
Community”.
Despite working in different fields, the independent knowledge workers that frequent co-
working spaces do face shared challenges, and some have common interests that can foster
this sense of “like-mindedness”.
It has also been suggested that “social learning” is a useful overarching conceptual model for
understanding the emergence of co-working social practices. Community activities such as
shared lunches and themed social clubs that take place within co-working spaces are rendered
legible as enabling platforms that support the cultivation of trust between coworkers and the
discovery and exchange of information such trust affords. This confidence is essential in an
entrepreneurial context where ideas are openly discussed as “proto-enterprises”, and enables
early forms of cooperation in the absence of formally detailed contractual arrangements.
Market trend and Potential
According to deskmag.com from Global Co-working Survey, last year shared office and co-
working spaces reported an average of 76 members, almost 50% more than just two years ago.
62% of all Co-working owners this year, reported wanting to expand their spaces, showing a
slight increase from the 59% as reported by the 2014 survey results. Almost identical with
previous study results, one in three operators (36% in 2016 vs. 35% in 2014) said planning at
least one additional location.
Not surprisingly, the profitability of a co-working space offers owners a greater opportunity (or
willingness) to move forward with expansion plans. In 2014 only 66% of profitable areas
planned to expand, compared to 78% in 2016. For those without profit or (so far) still
unprofitable a little more than one in two are planning to expand. Unsurprisingly, rising growth
intentions of co-working spaces are also related to the number of members. It makes sense
that the more members there are, the likeliness of increased profitability allows for more
revenue to be reinvested in the business. For spaces that have 50 or more members, the
likeliness of expansion is 25% greater than those who have 24 members or less. The largest
amount of potential to expand also appears to be for spaces which are operating 13-36 months
(69%) compared to 52% for areas less than a year in business and 63% for those spaces 37
months and older.
In the time where there are more and more spaces available, the loyalty of the members is an
important subject. As reported by members, four out of five of them plan to stay where they
are for the next year. Two-thirds of members haven’t even considered leaving, a slight increase
compared to the last survey. New data shows an increase in the number of members who work
at multiple spaces (15% of 2016 respondents vs. 9% of respondents in 2013), a response most
likely is linked to an overall increase of members who travel or identify themselves as digital
nomads. Another response tied to a possible increase in travel or relocation of members is that
now one out of five members no longer work from their first space.
While the number of co-working spaces open continues to grow, there is a general feeling that
it has not yet outpaced demand. The surveyed operators and their employees affirm this fact
with 56% of respondents saying that there is currently a good number of co-working spaces
existing in their city in relation to overall demand. Those who believe there are too few
decreased (27% in 2016 vs. 36% in 2014) which correlates to the increase in the amount who
think there are too many (14% in 2016 vs. 8% in 2014). However, the share of operators who
report too few spaces is still much higher than of the ones who already see too many spaces
operating compared to the demand.
ATO has already received numerous expression of interest to rent office spaces at this location
from those who are working in the area. You can find enclosed 18 letter of expression forms
duly signed by serious potential clients.
Marketing Strategies
All Time Offices primary marketing strategy will be introducing and promoting its web site
(www.AllTimeOffices.com) and its smartphone application A.T.O. which can be easily
downloaded from Apple App store and Google play. The website and the App must have a
fantastic design and be user-friendly enough to attract potential clients by themselves.
All the other online advertising facilities such as popular websites (Facebook, Google….) can be
used to draw the attention of young, tech-savvy professionals looking for a modern and
comfortable place to start their business.
My criteria for my marketing campaign also follow these rules:
All advertising must emphasize our differentiation point rather than price. We must sell the company, not the product. We must improve and increase our contacts with our clients and build a partnership business.
Market segmentation
The market for office and co-working spaces for All Time Offices Inc. can be broken down into
three segments:
Young Professionals
Young professional such as lawyers and accountants, in the early stage of their career and when
starting their own business, they need to test the market without bearing a significant amount
of investment and lots of commitments. The flexibility of renting a shared office space without
involvement help them to launch their business more comfortably. Besides that, by renting a
shared office, they somehow outsource some tedious office managing tasks and in this way,
they have more time and energy to invest in building their own business. Interaction with other
professionals and networking opportunities are another advantage of this kind of work
environment. They will also have the possibility to meet with their clients in our meeting rooms.
Start-ups
These start-ups rarely have the in-house expertise to solve office space or workflow
management problems. As a general rule, there is a tremendous amount of wasted effort and
space in start-ups. The focus is always on getting a product or service out to customers with
very little thought about how the office organization is working against them. The numbers of
start-ups increase each year around the world and especially in the business and technology-
oriented cities such as Montreal. All Time Offices Inc. believes that this is an underserved
segment and with its successes and connections, All Time Offices would become an invaluable
service to these target clients. As these companies move from the start-up phase to the growth
phase, All Time Offices will provide them with a solution for their need at that time and will also
receive this repeat business.
Small rapidly growing companies.
These companies have already reached some margin of success and are planning to expand
their operations, yet this doesn't mean that they are efficient. The success of their product or
service may be hiding problems in the process that will emerge as greater pressure is placed on
company performance. Each stage of growth in a company, present challenges that can hurt its
performance and success. All time Offices can provide these companies a focused approach
that is responsive to unique client demands, assisting them in achieving their future sales goals.
Competitors
Several companies are renting shared office spaces and Co-working areas in Montreal. Some of
them, such as Regus, have offices in different locations in the city and other North American
cities. Here is a list of some of the other players in Montreal.
WeWork Montreal https://www.wework.com/ Regus Montreal http://b.regus.ca/ Nexus workspace http://www.nexusworkspace.ca/ Intelligent Office https://www.intelligentoffice.com/en-ca Execu Space http://www.execuspace.com/
SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
The SWOT analysis provides us an opportunity to examine internal strengths and weaknesses my business must address. It also allows us to explore opportunities presented to my company as well as potential threats. Strengths
Excellent quality of services based on knowledge, and technology
The property is well located near the business district of the city
Having enough financial sources to run and manage various needs of the company Sound management skills which result in a well-run business
Weakness Being a new player in the market Competing with large and well-financed companies
Opportunities
Fast growing trend in start-up business based on new technologies and on-line services Change in the traditional model of 9 to 5 working in a permanent office High demand for this kind of offices in some other cities and the good potential of expanding the branches in the near future.
Threats
Hitting of another financial crisis
A significant slump in the economy that will likely have a correlated effect on start-ups
and new one-person businesses
Strategy and Implementation Summary
I estimate that it will take maximum six months to get the necessary financing, buy the premise
and perform all the necessary preparations and equipping and launch its website and mobile
application. Meanwhile, I will spend some more time on analyzing the market and identify the
best market segment to focus on more intensely. My forecast is that business will be ready to
accommodate its first client by the end of the sixth month of starting the project. At this time, I
will concentrate mainly in advertising and use other modern marketing tools to look for
different possible ways to promote my business.
Risk management
Business risk depends on the marketing strategies and the ability of the company to capture
and increase its part of the market. The barrier of entry into this type of business depends on,
to some degree, to the amount of investment it needs, but mostly on the skills and ability to
build a long-term relationship with potential clients and customers retention rate.
Having bought the property of the business decreases the risk of renewal or renegotiating the
lease of the office building which can lead to the increase in the rate. Approximately one in
eight Co-working spaces will face having to renew and/or renegotiate their lease this year. This
will also eliminate the risk of being obliged to move the location of the office due to the failure
of signing a new lease contract.
Financial Analysis
Cost Analysis
Revenue is based on my assumption about the occupancy rate in the first three years. Expenses
are calculated by comparison with other similar businesses.
Enclosed are a projected three-year ending balance sheet, cash flow statement, monthly cash
flow for year 1, and profit and loss statement, as well as the pro forma balance sheet.
Break-Even Point Analysis
One of the most famous formulas for calculating the breakeven point is based on contribution
margin percentage:
Sales at breakeven point = Total fixed costs / contribution margin %
Shared office rental is a service business. Therefore, there is no cost of sales and other variable
expenses are small. Based on my research, I have assumed contribution margin as 80%, so the
Break-even point would be:
Sales at the breakeven point = $ 376,145/ 80% = $ 470,181
My forecast of profit and loss statement shows that in the first year of business operation, my
business will achieve sales revenue of $480,000 which exceeds the break-even point.
Return on Investment (ROI)
ROI or Return on Investment calculates the percentage gained or
lost on investment. I am going to invest $1,225,000 which consists of an investment of
$225,000 from my own capital and $1,000,000 of debt financing. After three years, it will worth
$ 1,450,455 (based on attached pro forma balance sheet).
Based on above formula, the three-year return of my investment will be 38% and the
accumulative gain at the end of the 3rd year would be $ 306,609, which is a great result.
Appendix 1 – Service Packages
Packages Basic Membership
Virtual Office Hot Desk (Shared Desk)
Dedicated Desk
Dedicated Office Space
Monthly Cost No commitment
50$ $199.00 from 349$ from 499$ from 799$
Included Features
• Access to available add-ons
• Basic secretary service
• Permission to use ATO postal address
• Package delivery
• Fax delivery • Telephone
extension number diverted to customer mobile phone
• Free access to Meeting Room and Conference Room - 2 hours per month (non-transferable)
• Basic secretary service
• Permission to use ATO postal address
• Package delivery
• Fax delivery • Telephone
extension number diverted to customer mobile phone
• Free access to Meeting Room and Conference Room - 2 hours per month (non-transferable)
• Unlimited WiFi access
• Access to coffeeshop and shared spaces
• Unlimited Coffee
• Access to private phone booths
• Basic secretary service
• Permission to use ATO postal address
• Package delivery
• Fax delivery • Telephone
extension number diverted to customer mobile phone
• Free access to Meeting Room and Conference Room - 3 hours per month (non-transferable)
• Unlimited WiFi access
• Access to coffeeshop and shared spaces
• Unlimited Coffee
• Access to private phone booths
• Basic secretary service
• Permission to use ATO postal address
• Package delivery
• Fax delivery • Telephone
extension number diverted to customer mobile phone
• Free access to Meeting Room and Conference Room - Up to 10 hours per month (non-transferable)
• Unlimited WiFi access
• Access to coffeeshop and shared spaces
• Unlimited Coffee
• Access to private phone booths
• After hour access available 24/7 on-demand with online booking
• Discounted annual contract available
• After hour access available 24/7 on-demand with online booking
• Discounted annual contract available
Available Add-ons
• Meeting Room - 15$/hour
• Conference Room - 25$/hour
• Office Space - from 20$/hour
• Hot Desk - from 10$/hour
• Meeting Room - 12$/hour
• Conference Room - 18$/hour
• Office Space - from 18$/hour
• Hot Desk - from 10$/hour
• Access to printers - Pay per page
• Dedicate business phone number - 50$/month
• Meeting Room - 10$/hour
• Conference Room - 15$/hour
• Office Space - from 15$/hour
• Extra Hot Desk - from 10$/hour
• Access to printers - Pay per page
• Dedicate business phone number - 50$/month
• Meeting Room - 10$/hour
• Conference Room - 15$/hour
• Office Space - from 15$/hour
• Hot Desk - from 10$/hour
• Access to printers - Pay per page
• Dedicate business phone number - 50$/month
• VIP secretary services / Personal assistant - 500$/month
• Meeting Room - from 5$/hour
• Conference Room - from 8$/hour
• Extra Office Space - from 15$/hour
• Hot Desk - from 10$/hour
• Access to printers - Pay per page
• Dedicate business phone number - 50$/month
• VIP secretary services / Personal assistant - 500$/month
Appendix 2 – Financial Documents
Following financial documents are provided as appendix:
3 years cash flow projection
Profit and loss statement
3 years balance sheet
12-month cash flow.
CURRENT ASSETS
INITIAL INVENTORY -
CASH 40,000 40,000
FIXED ASSETS
Building (Buying office area property) 665,000
Leasehold Improvement (Renovation and decoration expenses) 510,000
Website and Application 100,000
COMPUTER, PRINTER 70,000
Office supply and furnitures 100,000
MARKETING AND PROMOTION 15,000
1,460,000
TOTAL ASSETS 1,500,000
LIABILITIES
Long term Loan -
Net LIABILITIES -
EQUITY
CONTRIBUTED CAPITAL 1,500,000
NET EQUITY 1,500,000
TOTAL LIABILITIES & EQUITY 1,500,000
Annual Depreciation- (Straight Line Method)
Depreciation (Leasehold Improvement, Website , COMPUTER, PRINTER and Equipment) 20% per annum:54,000
Depreciation (Building and Structure) 4% per annum: 47,000
Total Depreciation 101,000
Ali Mokhtari - All Time OfficePRO FORMA BALANCE SHEET
ASSETS
YEAR % of YEAR % of YEAR % of
ONE Sales TWO Sales THREE Sales
REVENUES
REVENUES 350,000 100.0% 520,000 100.0% 580,000 100.0%
TOTAL REVENUES 350,000 100.0% 520,000 100.0% 580,000 100.0%
GROSS MARGIN 350,000 100.0% 520,000 100.0% 580,000 100.0%
Wages 40,000 11.4% 90,000 17.3% 92,310 15.9%
QPP , QPIP, QHSF and EI Contributions 3,600 1.0% 8,100 1.6% 8,308 1.4%
Supplies 3,500 1.0% 5,200 1.0% 5,800 1.0%
Marketing 35,000 10.0% 15,600 3.0% 10,000 1.7%
Utilities 10,000 2.9% 10,000 1.9% 10,000 1.7%
Repair and Maintenance 4,000 1.1% 4,000 0.8% 4,000 0.7%
Condo fees and Property Tax 12,000 3.4% 12,000 2.3% 12,000 2.1%
Depreciation 101,000 28.9% 101,000 19.4% 101,000 17.4%
Insurance 3,500 1.0% 5,200 1.0% 5,800 1.0%
Legal / Accounting 4,000 1.1% 4,200 0.8% 4,410 0.8%
General & Administrative Expenses 5,500 1.6% 5,775 1.1% 6,064 1.0%
TOTAL EXPENSES 222,100 63.5% 261,075 50.2% 259,692 44.8%
Pre-Tax Income 127,900 36.5% 258,925 49.8% 320,308 55.2%
Taxes 21,743 6.2% 44,017 8.5% 54,452 9.4%
Earnings after Interest and Taxes 106,157 30.3% 214,908 41.3% 265,856 45.8%
Forecast Profit and Loss Statement
OPERATING EXPENSES
PRO FORMA INCOME STATEMENT
Ali Mokhtari - All Time Office
NOTES:
Marketing costs in first year 5% and 2nd and 3rd year would be based on 3% of gross sales.
Supplies = 1% of revenue.
Insurance = 1% of revenue.
Depreciation is based on Capital Cost Allowance (CCA) rates.
Salaries are increased by 2% each year
Loan has aterm of 15 years with 6% interest
Employees Rate Total # FTE Wages Total # FTE Wages Total # FTE Wages
Office Manager 50,000 1 0 1 50,000 1 51,000
Administrative Assistant 40,000 1 40,000 1 40,500 1 41,310
Total Wages* 2 40,000 2.0 90,500 2.0 92,310
Average Weekly Revenue 6,731 10,000 11,154
Annual Revenue $350,000 $520,000 $580,000
YR-THREEYR-ONE YR-TWO
Forecast Ending Balance Sheet
ASSETS
CURRENT ASSETS
CASH 40,000 247,157 563,065 929,921
TOTAL CURRENT ASSETS 40,000 247,157 563,065 929,921
FIXED ASSETS
Building (Buying office area property) 665,000 665,000 665,000 665,000
Leasehold Improvement (Renovation and decoration expenses) 510,000 510,000 510,000 510,000
Website and Application 100,000 100,000 100,000 100,000
COMPUTER, PRINTER 70,000 70,000 70,000 70,000
Office supply and furnitures 100,000 100,000 100,000 100,000
INITIAL MARKETING 15,000 15,000 15,000 15,000
MINUS ACCUMULATED DEPRECIATION (101,000) (202,000) (303,000)
NET FIXED ASSETS 1,460,000 1,359,000 1,258,000 1,157,000
TOTAL ASSETS 1,500,000 1,606,157 1,821,065 2,086,921
CONTRIBUTED CAPITAL 1,500,000 1,500,000 1,500,000 1,500,000
RETAINED EARNINGS - - 106,157 321,065
CURRENT INCOME/LOSS - 106,157 214,908 265,856
NET EQUITY 1,500,000 1,606,157 1,821,065 2,086,921
TOTAL LIABILITIES & EQUITY 1,500,000 1,606,157 1,821,065 2,086,921
YR-ONE YR-THREE
BEGINNING ENDING
Ali Mokhtari - All Time Office
ENDING
PRO FORMA BALANCE SHEET
YR-TWOYR-ONE
ENDING
Cash Flow Forecast ENDING ENDING ENDING
YR-ONE YR-TWO YR-THREE
Net Profit After Interest and Tax 106,157 214,908 265,856
ADD: Depreciation 101,000 101,000 101,000
GROSS CASH FLOW 207,157 315,908 366,856
WORKING CAPITAL REQUIRED
Debtors 0 0 0
Creditors 0 0 0
Inventory (to match sales growth) 0
OPERATING CASH FLOW (A) 207,157 315,908 366,856
Investment Capital 1,500,000 0 0
Drawings 0 0 0
Loan Principal Payment 0 0 0
FINANCING ACTIVITIES (B) 1,500,000 0 0
Fixed Assets 0 0
Other Assets 0 0
INVESTMENT ACTIVITIES (C) (1,500,000) 0 0
NET CASH FLOW (A+B+C) 207,157 315,908 366,856
OPENING CASH BALANCE 40,000 247,157 563,065
PLUS/MINUS NET CASH FLOW 207,157 315,908 366,856
CLOSING CASH BALANCE 247,157 563,065 929,921
PRO FORMA CASH FLOW
Ali Mokhtari - All Time Office
YEAR ONE month1 month2 month3 month4 month5 month6 month7 month8 month9 month10 month11 month12 TOTAL
REVENUES
REVENUES 8,000 18,000 23,000 28,000 34,000 39,000 43,000 47,000 51,000 57,000 64,000 68,000 480,000
TOTAL REVENUES 8,000 18,000 23,000 28,000 34,000 39,000 43,000 47,000 51,000 57,000 64,000 68,000 480,000
Wages 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 6,667 80,000
QPP , QPIP, QHSF and EI Contributions 600 600 600 600 600 600 600 600 600 600 600 600 7,200
Supplies 400 400 400 400 400 400 400 400 400 400 400 400 4,800
Marketing 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Utilities 833 833 833 833 833 833 833 833 833 833 833 833 10,000
Repair and Maintenance 333 333 333 333 333 333 333 333 333 333 333 333 4,000
Condo fees and Property Tax 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Depreciation 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 168,000
Insurance 400 400 400 400 400 400 400 400 400 400 400 400 4,800
Legal / Accounting 417 417 417 417 417 417 417 417 417 417 417 417 5,000
General & Administrative Expenses 625 625 625 625 625 625 625 625 625 625 625 625 7,500
TOTAL EXPENSES 27,275 27,275 27,275 27,275 27,275 27,275 27,275 27,275 27,275 27,275 27,275 27,275 327,300
Earnings Before Interest & Taxes (EBIT) -19,275 -9,275 -4,275 725 6,725 11,725 15,725 19,725 23,725 29,725 36,725 40,725 152,700
Interest Expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Pre-Tax Income -19,275 -9,275 -4,275 725 6,725 11,725 15,725 19,725 23,725 29,725 36,725 40,725 152,700
Taxes 15,955
Ali Mokhtari- ALL Time Office
Monthly Income and Cash Flow Projection
OPERATING EXPENSES
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