Reality Cable Network Ltd-Business Plan

Business Plan for

REALITY CABLE NETWORK LIMITED

World Trade Centre, 2nd Floor

Independence Avenue

P.O. Box TA 658

Taifa-Accra, Ghana

Tel: +233540722475 Fax: +233571962378

E-mail: [email protected]

Written and submitted by

Selassie Nyadzi Director of Corporate Affairs

Paul T. Patrick

Director of Finance

Herbert Tombia

Director of Administration

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Reality

Cable Network Limited (RCN) in this business plan is confidential. Therefore,

reader agrees not to disclose it without the express written permission of the

Board of Directors of Reality Cable Network Limited (RCN).

It is acknowledged by reader that information to be furnished in this business plan

is in all respects confidential in nature, other than information which is in the

public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to Reality Cable Network Limited

(RCN).

Upon request, this document is to be immediately returned to Reality Cable Network Limited (RCN).

___________________

Signature

___________________

Name (typed or printed)

___________________

Date

Note: This is a business plan. It does not imply an offering of securities.

Page 1

Table of Contents

1.0 Executive Summary…………………………………………………………………………………………………………………….……………….….2 1.1 Objectives………………………………………………………………………………………………………………………………….…………………....5 1.2 Keys to Success………………………………………………………………………………………………………………………….………………….…6 1.3 Vision, Mission, Value………………………………………………………………………………………………………………………....……………7 2.0 Company Summary……………….………………………………………………………………………………………………………….…………..…8 2.1 Company Ownership…………………………..…………………………………………………………………………………………………………….9 2.2 Company Locations and Facilities………………………………………………………………………………………………….…………………9 2.3 Start-up Summary……………………………………………………………………………………………………………….………………………….10 3.0 Products and Services……………………………………………………………………………………………………….…………………………...12 3.1 Product and Service Description…………………………………………………………………………………………………………………….12 3.2 Competitive Comparison………………………………………………………………………………………………………………………………..12 3.3 Sales Literature…………………………………………………………………………………………………………………..………………………….13 3.4 Technology…………………………………………………………………………………………………………………………………….……………….14 3.5 Future Products and Services……………………………………………………………………………………………….……………………….14 4.0 Market Analysis Summary……………………………………………………………………………………………….…………………………….14 4.1 Market Segmentation…………………………………………………………………………………………………………………………………….15 4.2 Target Market Segment Strategy……………………………………………………………………………………..………………………….15 4.2.1 Market Growth…………………………………………..…………………………………………………………………..………………………….16 4.2.2 Market Needs………………………………………………………………………………………………………………..……………………………16 4.2.3 Market Trends……………………………………………………………………………………………………….…………………………….….…17 4.3 Service Business Analysis…………………………………………………………………………………………..…………………………….….18 4.3.1 Business Participants…………………………………………………………………………………………………………….……………….….19 4.3.2 Distributing a Service………………………………………………………………………………………………………….…….……………...20 4.3.3 Competition and Buying Patterns……………………………………………………………………………………….…………………….20 4.3.4 Main Competitors ……………………………………………………………………………………………………………….……………………..21 5.0 Strategy and Implementation Summary……………………………………………………………………………………………………..22 5.1 Competitive Edge…………………………………………………………………………………………………………………..……………….…….22 5.2 Sales Strategy……………………………………………………………………………………………………………………….………………………23 5.2.1 Sales Forecast………………………………………………………………………………………………………………….………………………..24 5.3 Strategic Alliances……………………………………………………………………………………………………………..………………………….24 5.4 Marketing Strategy……………………………………………………………………………………………………..………………………………..24 5.4.1 Positioning Statement……………………………………………………………………………………..…………………………………….…..25 5.4.2 Pricing Strategy……………………………………………………………………………………………..…………………………………………..25 5.4.3 Promotion Strategy……………………………………………………………………………………..……………………………………………..26 5.4.4 Distribution Strategy……………………………………………………………………………………………………………………………………26 6.0 Management Summary………………………………………………………………………………..………………………………………………..27 6.1 Organizational Structure…………………………………………………………………………………………………………………………………28 Organizational Chart……………………………………………………………………………………………………………..……………………….28 6.2 Management Team…………………………………………………………………………………………………………….……………………………29 6.3 Management Team Gaps……………………………………………………………………………………………….……………………………….29 6.4 Personnel Plan…………………………………………………………………………………………………………………………………………………29 7.0 Financial Plan…………………………………………………………………………………………………………..…………………………………....30 7.1 Important Assumptions………………………………………………………………………….……………………………………………………….30 7.2 Key Financial Indicators……………………………………………………………………….………..……………………………………………….30 7.3 Break-even Analysis……………………………………………………………………………...……………………………………………………….31 7.4 Projected Profit and Loss…………………………………………………………………..…………………………………………………………..31 7.5 Projected Cash Flow…………………………………………………………………………..…………………………………………………………..31 7.6 Projected Balance Sheet…………………………………………………………………….……………………………………………………………32 7.7 Business Ratios……………………………………………………………………………………………………………………………………………….31

Conclusion……………………..……….....................................................……………..………………………………………….31

Page 2

1.0 Executive Summary:

Business Incorporation: Reality Cable Network Limited (RCN) is a strong media organization that is registered as a limited liability company under the

provision of Sections 27 and 28 of the Companies Act, 1963 of Ghana with its

business registration office located in Accra metropolitan area. The company

registration number is: C5114072012; and the Tax Identification Number (TIN) is: TIN C000123644X. The amount of corporate shares allotted to the company

upon registration is USD100 million. The three Board of Directors reserves the

right to take 60% of the allotted shares or USD60 million; and investors taking

up the 40% or USD40 million. Any sums required of investors to develop the business beyond the initial share allotment of USD100 million will warrant the

express approval of the Registrar of Companies before effecting such contracts.

Primary Areas of Business Operations: The company is incorporated with three directors and its primary areas of business operations are:

TV Broadcasting Services

Media Production

Media Franchising

The above-mentioned three massive sources of revenue generation are

modeled across the board like the existing great business organizations in the

media industry, such as Comcast Corporation, The Walt Disney Company, News Corporation, Google Inc., and Viacom Inc., all with combined annual revenue of

USD148 billion. Upon incorporation, the Board of Directors of Reality Cable

Network Limited (RCN) has come up with a Board Resolution to, at least,

capture 2.02% of the global media-market value in its first year of business operations, which accrues to USD3 billion.

The Revenue Target: The target of USD3 billion in annual revenue is only

achievable when the necessary financing avails the Board of Directors with the

requisite resources to work out this overall business plan, starting by having a befitting, well-furnished, office space at the business hub of Accra metropolis,

which by itself will be used as an asset in the firm. The office space, when not

in use, will be utilized as virtual office for executives to lease on hourly basis,

which, in the first place, recoups the annual costs of renting the facility.

Star-up Resources: More so, the company will be equipped with three motor

vehicles to transport the three executive directors to different contact points in

and around the Accra metropolis to accomplish the daily routines of the media organization. These three motor vehicles will themselves remain as assets in

the company’s balance sheet, because when not in use, the vehicles will be

used for car-rental services in order to recoup the costs of purchasing them,

aside from running a depreciation account.

Page 3

Other Start-up Resources: Other relevant start-up resources are staff

quarters for the Board of Directors. Of course, the three apartments that will be leased to the three directors to live in close proximity, and effectively run the

affairs of the company, will serve as home for the directors. Nonetheless, due

to a suitable pattern of interior decoration placed on the staff quarters, when

any of the apartments are not in use, the vacant flats will be leased out as serviced apartments in order to generate revenue to meet the costs of leasing

the apartments. Further arrangements will be made to provide convenient staff

quarters for the Chairpersons of the Executive, Local, and Foreign Advisory

Boards, and any of these apartments that are left vacant for a protracted period of time, may or may not be leased out as serviced apartments.

Launching the Company Website: Furthermore, a corporate website will be

established to promote and market the products and services of the organization. At a minimal value of USD250 or less, a company website can be

launched with Webs.com. This corporate website is a great asset to the

company because it will not only be used as newsfeed for the organization, but

as a vital source of revenue from the world over. Since the company has

chosen to produce a reality show, World Tribal Hero, for its first year of business operations, the website will be used for e-mail voting. Only people

from the world over who are subscribed for this activity will be allowed to use

the website for email voting in favour of their tribal delegates. Since the reality

TV series will be global by nature, we expect that 1.4 billion or 20% of the entire global community will be interested to watch the programmes of the

company. At an annual registration of USD5.00 per person, we expect to enroll

50% of the projected number of spectators (700 million people), which might

accrue in revenues to the tune of USD3.5 billion.

The Pilot/ Demo Show: The shooting of the Pilot Show for demonstration

purposes now comes in. Even before the commencement of producing the

show, advertising revenues to the tune of USD16 million will accrue to the

company, because at present, the advertising rate on reality shows per 30 seconds is USD1 million. During the shooting of the first episode of the World

Tribal Hero, an advertising agency will be employed to give tenders to

prospective advertising big weights in the world over to come on board. The

production cost of the Pilot show is slated for USD3.5 million. With a further investment sum of USD1 million in favour of the advertising agency, the profit

from the first episode of the show stands at USD11, 500, 000. This revenue is

exclusive of the global sales of the DVD itself, which might generate USD300

million in gross revenue, and USD196 million in the accruals of foreign broadcasting rights from 196 countries.

Page 4

Major Sources of Revenue: From every indication, the business of Reality

Cable Network Ltd (RCN) is instantly lucrative from the start. The expected

sales figures from all other means of generating revenue are as follows:

1. RCN Launching - USD75,000

2. Global Phone Subscriptions - USD5,500,000

3. Global Phone Voting - USD286,000,000 4. Global Text SMS & Phone Voting - USD291,500,000

5. Pilot DVD - USD196,000,000

6. Global DVD Sales - USD300,000,000

7. Global Broadcasting Rights Issue - USD196,000,000 8. Global Adverts - USD800,000,000

9. Global Country Tour - USD117, 500,000

10. Global Publishing - USD300,000,000

11. Global Movie - USD300,000,000 12. Global Merchandize - USD9,800,000

13. Global Product-branding Licensing - USD196,000,000

14. Global Video Game - USD56,000,000

15. Global Opera Shows - USD6,000,000

16. Global Theme-Park Licensing - USD6,000,000

Total Revenue Estimate USD3, 166,375,000

The resources needed to effect the above sales are as follows:

1. Financier Payout (Total investment, 100% profit, Plus 20% bonus)

- (USD556,811,358.50) 2. Consultancy Fees and talent outsourcing – (USD 13,505,000.00)

3. Prize money and overhead costs - (USD 69,323,132.50)

Total Costs per Annum - (USD639,639,491.00)

Profit before Tax - USD2,526,735,509.00

Note: The profit before tax as indicated above is exclusive of other incomes

from the company’s website, virtual office services, car-hire services, and serviced-apartment revenues.

Projected Outcome: With total investment estimated at USD80 million and

profit before tax projected at USD2.5 billion, this business venture is no different from the other reality shows at the marketplace, especially American

idol where Ford Motors and Coca Cola invested USD60 million in 2011, and

then realized more than USD800,000 in net sales. Since World Tribal Hero will

Page 5

be telecast live in 196 countries, the activities and revenue collection is

expected to hit USD3 billion at the end of its first year in business.

On a resolution passed by the Board of Directors on December 4, 2012, all

investors will be issued Common, or Preference Shares, and Bonds if it suits the

investors’ needs the most. Besides, all tangible assets that are invested in the

company will be granted 100% profit, 20% on invested sum, and an entitlement to the company’s annual dividends. Board appointed staffs of the

organization are also allowed to invest in the company’s stocks, and the same

fair financial treatment will be allotted to them.

1.1 Objectives:

Short Term Goals/ Miscellaneous Incomes:

1. Patent the rights of the reality show concept, “World Tribal Hero”, with the

Copyrights Office, Ghana.

2. Lodge in MTN sponsorship fund of USD3.5 million into the company’s

established corporate bank account. 3. Open a bank account with an investment bank that can allocate USD80

million in perpetual funding for one year running. The same bank will collect

all revenues accruing to the company.

4. Secure an office space at Movenpick Ambassador Hotel Emporium at USD61,050,000. This virtual office is capable of generating USD125,000

annually if marketed and promoted effectively.

5. Engage an interior-decoration firm to furnish the office as virtual office for

the price of USD63,000. 6. Launch the company, sell shares to special invitees, and generate

USD75,000 in revenue.

7. Launch the company’s website, enroll email voters worldwide, and generate

USD7 million. 8. Use the website to raise funds for the cancer and aids foundations to the

tune of USD40 million.

9. Get credit cards for the Board of Directors with USD10,000 credit limit to

meet contingency expenses in the course of travelling around the world to

put the global business of the company in proper shape. 10. Get the Board of Directors with three Range Rover Evoque SUVs for

USD150,000 and then use them to generate USD180,000 on car-hire

services.

11. Settle the three directors with their Directors’ Fees worth USD1 million each to have them run a global business model that is time constraining and

energy-sapping. The Board of Directors are expected to deliver on the

prospective annual general revenue of USD3 billion, using their corporate

vision, abilities, and know-how.

Page 6

12. Also settle the Chairpersons of Reality Cable Network Ltd, Hon. Zita

Okaikoi of Ghana Supply Company Ltd; the Local Advisory Board Dr. Ekwow

Spio Garbrah of Ghana Business & Finance; and Foreign Advisory Board Cecile Frot-Coutaz of Freemantle Media Ltd with USD2 million each. The

time, sacrifice, and skill-sets that the three chairpersons bring to make this

organization a success, positions them to be adequately rewarded.

13. Enlist the services of professional organizations to develop the IT infrastructure, promote, and then market the organization to make an

impact on the global community.

Long Term/ Revenue Generation:

1. Run the reality show, World Tribal Hero, for twelve (12) years in order to

generate USD36 billion in gross revenues.

2. Establish a charitable trust to give arms to the less fortunate and handicapped. Seek funding from other foundations, such as the United

States Agency for International Development and Bill & Melinda Gates

Foundation.

3. Incorporate offshore corporations as subsidiaries of Reality Cable Network

Ltd in all of the 196 UN-recognized countries in the world. 4. Set up cable TV stations in all countries in the world.

5. Buyout as many media organizations in the world as possible.

1.2 Keys to Success:

Home Division:

Place seasoned statesmen and business magnates as chairpersons on all the

three boards.

Train and pay workers well in the company.

Provide adequate media-related, on-the-job courses to boost the performance of the three directors.

Employ experts to run the daily activities of the organization.

Build alliances with other media organizations. Invest in the preference

shares of great companies.

Encourage gender equality in the firm. Advertise and create awareness of the products and services of the

company.

Compensate shareholders well.

Keep up-to-date and remain competitive with other media organizations. Work with the best auditing firms.

Promptly settle all outstanding taxes to the government.

Do charitable works.

Page 7

Prepare to take the company public by seeking the services of an

appropriate investment bank.

Tour and Travel Division:

As a global media organization with a view to running the show, World Tribal Hero, there is every need to allocate sufficient funds to meet the costs of air

travels, hotel accommodations, and life insurance covers.

Recruit as many talented staffs as possible in other countries to always

reduce the costs and risk of travel.

Business to Business (B2B) Division:

Shares & Stocks: As a matter of corporate policy, use common and

preferred shares to pay off business transactions in the world over, to have

enough partners in the same industry as affiliates in business.

Product Quality: Ensure that the services and products of RCN meet with

the expectations of other business organizations. Marketing: Engage the print media, TV, radio, social networks, billboards,

events, student activities, publications, and so on to create awareness of the

organization. Do this and take along the branded products and services of

business sponsors. Management: Products and services should be promptly delivered. Budgets

must be placed under tight scrutiny and control. Legal and accounting advice

concerning new development or budgeting should be taking seriously, such

as corporate laws and copyright/ trademark requirements. Adequate staffing of various departments is paramount to the success of the organization.

1.3 Vision, Mission, Value:

Vision: To explore international tribal values and use them to amuse global audiences.

Mission: To identify and harmonize all the tribes in the world over.

Value: To set higher standards on media entertainment.

The Corporate Agenda: Reality Cable Network Ltd and all of its

stakeholders, including the Board of Directors, staffers, and other

affiliates will set high standards of etiquette in running the day-to-day

affairs of the business organization. Loyalty, honesty, and respect will be accorded to clients, workers, and investors. The purpose of this business

plan is to ensure that the rightful business partners, not excluding

investors, shareholders, and bankers, to develop the business concept,

and have great market share from the world at large. If Comcast

Page 8

Corporation, The Walt Disney Company, News Corporation, Google Inc.,

and Viacom Inc. can make it day in, day out, then RCN is also equal to

deliver on its promise.

As a company limited by shares, the company has a legal entity to run its

course. The resources apportioned to the organization are nothing other

than assets held in trust by the Board of Directors. The boards of directors have an all-encompassing vision that the media is a great cash cow,

especially the entertainment sector. For example: On June 11, 2002, Ford

Motors and Coca Cola invested USD10 million in the business of the

stakeholders of the company, they turn it around to USD700 million. Then years afterwards, the trend continues to grow as technology and the

Internet services improve globally.

The Board of Directors of RCN cannot wait to see this development happen to its organization and prospective investors. The idea is to build the

organization to the ranks of the top-five media houses in the world. This will

require a great deal of focus, personal sacrifice, and perseverance to reach

that destination. The other goal of the board is to drive the organization into

becoming a publicly traded company in three to five years of being in business.

2.0 Company Summary:

Reality Cable Network Ltd (RCN) is a registered media organization that is

limited by shares. It is a good start that the Registrar of Companies approves

share allotment to the company worth USD100 million. Nevertheless, from the

vision of the founders and directors’ point of view, this is in no way going to match the revenues, profits, and equity that the company will be holding at the

end of its first year in business. Therefore, there is every possible reason to

contact the Registrar of Companies in Ghana to raise the bar when the time is

due.

Since Reality Cable Network Limited (RCN) has a view to go into TV

broadcasting and media franchising at the end of its first year in business,

revenues will accrue three-fold. Besides, with the company having a view to

procuring numerous media houses in the world over, its revenue and incomes will grow exponentially year in, year out. The company is founded and

administered by people with a vision for the future. The boards of directors

believe that any capital or assets put in trust on them are vital resources with

which to grow the company. RCN is founded on the notion of getting into the league of the biggest five media organizations in the world.

Page 9

2.1 Company Ownership:

Reality Cable Network Ltd (RCN) is currently a private company limited by

shares. The three Board of Directors own 60% (USD60 million) of the

company’s equity and other investors and shareholders will be apportioned with

the remainder 40% (USD40 million). To meet its global needs of growth and expansion, Reality Cable Network Ltd (RCN) will be open to both local and

foreign investors to own shares. As the law permits, all shareholders are joint-

owners of the company, privileged to attend board meetings, and have voting

rights.

2.2 Company Locations and Facilities:

Reality Cable Network Ltd (RCN) is currently located at HNO.F.209A, Orange

Street, Ashongman Estate with offices at World Trade Centre, Accra. Presently,

it has contacted Dean Foley, Real Estate Manager, of KHI 01 GH LTD, to lease two office units (#7 and #8) on the 5th Floor of the Movenpick Ambassador

Hotel Emporium.

The location of the new office serves to meet the needs of using the National

Theatre for auditions and other business promotions. To lodge victorious contestants of the reality show at the rooms of the Movenpick Ambassador

Hotel, and to be at an accessible location when shooting of the reality show

commences in 2013. Besides, this office location is in close proximity with

banking facilities.

The point is to have a classy business centre for use as a virtual office for

executive meetings and as a nerve-centre for the Board of Directors to use as

office space. From this office, and working eight hours a day, the three directors of the company are geared to realize the annual revenue of USD3

billion in sales.

Page 10

2.3 Start-up Summary:

Expenses and perpetual financing for the business start-up are shown below.

Table: Start-up:

Description Amount

Requirements

Start-up Expenses:

Auditors $2,000

Virtual Offices $61,050 Internet $250

Legal $10,000

Total Start-up Expenses: $73,300

Start-up Assets:

Cash Required $9,000,000

Laptops $ 4,200 Range Rover Evoque (3) $150,000

Furniture & Fittings (offices)

Start-up Assets to Fund

$ 63,000

$9,217,200

Total Requirements $9,290,500

Page 11

Table: Start-up Financing

Description Amount

Start-up Expenses to Fund $73,300 Start-up Assets to Fund $9,217,200

Total Funding Required $9,290,500

Assets

Non-cash Assets from Start-up $0 Cash Requirements from Start-up $67,209,500

Additional Cash Raised $3,500,000

Cash Balance on Starting Date $0

Total Assets $80,000,000

Liabilities and Capital

Liabilities

Current Borrowing $70,000

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0

Total Liabilities $70,000

Capital

Planned Investment

Investor 1 $10,000

Investor 2 $10,000

Investor 3 $10,000 Total Planned Investment $79,960,000

Loss at Start-up (Start-up Expenses) ($30,000)

Total Capital $79,930,000

Total Capital and Liabilities $80,000,000

Total Financing $80,000,000

$79,930,000

Page 12

3.0 Products and Services:

As stated in the Company Summary section, Reality Cable Network Limited

(RCN) is into three business divisions. They are TV Broadcasting Services,

Media Production, and Media Franchising. These three areas are basically what

all the top-notch media organizations are using to make money in the world over. Therefore, the company stands to grow in leaps and bounds by capturing

2.02% market share.

3.1 Product and Service Description:

Services include:

Writing movie scripts for other reality shows. Selling branded goods for other media organizations.

Applying for TV-licensing for start-up media organizations.

Producing video coverage for event-organizers.

Supplying media-production equipment to media organizations. Funding small scale projects

Distributing DVD and films for movie producers

Partnering and supporting media organizations

Branding products for other media networks

Retailing DVDs and movies

Products include:

Producing DVD seasonal videos Producing movies

Producing RCN-branded T-shirts, hats, boxers, etc.

Magazines and books

Contestant photo albums

3.2 Competitive Comparison:

Reality Cable Network Ltd (RCN) will always go for the best expertise, equipment, video, and DVD productions. The nature of its business is to give

value for money. From the commencement of the business, it will choose the

best investment banks to deposit money and seek financing, giving Common

Shares, Preference Shares, and Bonds as the case may be. It will also purchase

shares from the top-five media houses to generate passive income and enable them to procure shares in RCN. There is a goal to establish the next best TV

station in the period 2013-14. Its current reality show is the biggest in the

world and geared towards entertaining 1.4 billion viewers worldwide. This

vantage point will yield billions of dollars in advertising revenues more than any

Page 13

existing media network in the world. Sooner or later, it will commence

franchising for the best media houses on the planet.

Home Division:

The company will endeavour to partner as much as possible with all media

houses in Ghana. Where adequately capitalized, the firm will buy out some of the media organizations and upgrading their standards. The reality show, World

Tribal Hero, will be first of its kind in Ghana. Once the shooting begins, the

company will employ many local talents, thus alleviating the problems of

unemployment in the country. The foreign broadcast rights will accrue a lot of foreign currency to the local markets, and RCN will be among the top tax-

paying companies in Ghana, estimated at USD600 million annually, thus

boosting the growth of the local economy.


This department will embark on journeys to other countries to set up off-shore

bank accounts and subsidiaries for RCN. It shall also participate in launching

ceremonies abroad. The department will make sure that foreign rights are sold to every valid country in the world. The staffers in this department will oversee

all travel arrangements amongst crews, contestants, and business invitees.


From the start, Reality Cable Network Ltd will allocate shares to the big five

organizations to partner in its flagship of growing the company to a big player

in the industry. Thus, RCN will stand a good chance to benefit from their know-how or expertise. RCN will also tie up with Facebook, Twitter, and YouTube as

channels to promote its business objectives and funding-partner interests

worldwide.

3.3 Sales Literature:

Flyers, bulletins, blogs, websites, subscriber emails, magazines, and books will

be published at regular intervals to reach out to the corporate world to place

advertisements on the reality show, World Tribal Hero.

Fulfillment:

Published materials can be purchased online, Amazon.com, eBay, and

bookshops worldwide.

Page 14

3.4 Technology:

The company will be using state-of-the-art technology in producing feature

DVDs, movies, and other video coverage. For office use, Windows and

Macintosh can be used for processing information. Macintosh products are used

primarily for video editing, and loading video onto websites. RCN will also use all the necessary components for a digital video production center, including

cameras, mini-disc recorders, microphones, and lights. Usually, some media

organizations lease the equipment for use at a minimal price. Subsequently, the

company will include DVD-R drives on its computers, to enable the firm to copy DVDs, rather than simply recording VHS tape.

Furthermore, standard computers, scanner-copier-printer centers, electronic

faxing via the Internet, cell phone, DSL Internet subscriber line and several video tape recorders of various formats, including Beta SP, SVHS, DVC, and

3/4" will be procured as useful materials to develop the business. These

facilities are capable of posting essential stories onto the Internet and to be

downloaded directly to other TV stations who procured the company’s foreign

rights. These resources will eliminate the need for hard tape, and would give the stations instant access to TV series that they can easily download to their

specific tape format.

3.5 Future Products and Services:

Within the next five years, the company will add storefronts worldwide, all

following consistent guidelines in the business system. The firm will franchise these stores globally. Thus generating about USD200 million worldwide. The

organization will also add the production of travel news to its line of products.

This angle of business can have up to 150,000 subscribers, and will yield

almost USD3 million in advertising revenue annually.

4.0 Market Analysis Summary:

Home Division:

In Ghana, a great deal of media houses is being issued with TV Broadcast

licenses. A few of them have the licenses, but cannot have the necessary

equipment to telecast their shows. Thus, RCN will approach these insufficiently

funded companies with buyout propositions, acquire their licenses, and pursue the goals of having as many TV stations as possible under its brand. However,

many TV stations are up and running with different TV shows. These functional

stations will most likely procure the rights to air the World Tribal Hero. In

Ghana, by issuing broadcasting rights to numerous TV stations and having a

Page 15

share of advertising revenues from local TV stations, about USD15 million will

accrue as revenue to the company annually.

Tour and Travel Division (Home Division):

Country tours will be organized with popular contestants of the World Tribal

Hero. These tours will require local artists, musicians, and acrobats to come and perform. Tickets will be sold during these events, and up to USD75,000 can

be generated from these country tours. Camera crew will go from region to

region to select performing tribal heroes, and shoot videos.


Reality Cable Network Ltd (RCN) has a long-term goal of becoming the

dominant media house in Ghana and Africa in general. Should this be a viable course to take, RCN will have to establish good rapport with other media

organizations, sell shares of the company to them, and then contribute to the

overall growth of every other TV station.

4.1 Market Segmentation:

Reality Cable Network Ltd (RCN) has identified three broad markets: The home

market, the foreign market, and the web-based market. The home market will

give the company sufficient revenue to meet its overhead costs annually, whilst the foreign market will lead the company to enormous growth. The web-

based market is another huge market from which revenues will accrue to the

company in drones. Other elementary markets are book and album publishing

of reality show contestants, telephone and email voting, and computer games.

4.2 Target Market Segment Strategy:

Home Division:

Reality shows abound in the world over. However, the sector is not fully

explored yet. For example, Survivor, American Idol, and the like simply focus

on the American market with a limited forty (40) million viewers. However,

Reality Cable Network Ltd targets all the countries in the world, including America, to have a viewership of 1.4 billion. This is only a conservative

viewpoint since more than 20% of the global community will be interested in

the performance of their tribal delegates.


The three directors of RCN will be up and running due to the fact that the

corporate vision has to be put in practice and there must be harmony among all

Page 16

participating countries. The need will always arise for the Tour and Travel

Division to arrange broadcasting rights for suitable TV channels in any country

in the world.


There will be a need to find local talent or expertise in all countries in the world to manage and run the operations of the company. RCN will be teaming up and

working with relevant TV stations. Besides, a research unit will always keep

tabs on the trend of reality shows worldwide. RCN is currently having

partnership arrangements with GTV and Multi-TV in Ghana to air the show and retail licenses to other local TV stations.

4.2.1 Market Growth:

Home Division:

In the media industry, growth rate is almost always exponential. If Comcast

Corporation can make up to USD55 billion in twelve calendar months, it then

means that on the average they are making USD4,583,333,333.33 monthly. With a nerve-centre set up for RCN and the relevant tools put in place, the

financial growth will be obvious almost immediately.


Reality shows worldwide are generating huge sums of money in revenues in

their local and international markets. Advertising revenues average USD800

million annually. Google, Yahoo, and Facebook derive billions of dollars in advertisements. Reality cable Network Ltd (RCN) will engage the CEO of

Delivery Agent Incorporated, Mr. Mike Fitzsimmons, to run the affairs of the

website of RCN. Delivery Agent Incorporated currently hosts the websites of

CBS, NBC, FOX, and Discovery, and they are raising substantial revenue into the coffers of these corporations. The company will also partner with Mr.

Tadashi Ishii, President and CEO of Dentsu Incorporated, to sell its media rights

worldwide. Dentsu Incorporated, based in Tokyo, Japan, is into branding and

corporate identity, consumer insights, design, digital, marketing, market

research, media planning and buying, public relations, relationship marketing, and realized ¥1.678 trillion in revenue in 2010.

4.2.2 Market Needs:

Home Division:

The reality show market needs a proficient agency that will collect

advertisement revenue on their behalf, especially an investment bank. It also

Page 17

needs a powerful branding organization, such as Wolf Olins, based in London,

New York, and Dubai. The company specializes in developing brand

experiences, creatively-led business strategies, and visual identity systems, and has worked in sectors including Technology, Culture, Retail, Energy & Utilities,

Media, and Non-profit. Reality Cable Network LTD (RCN) also needs an

investment bank that can issue share certificates on its behalf, provide, at

least, USD80 million on standby overdraft facility, and work creatively alongside with the Board of Directors of RCN. All granted bank overdrafts instantly

translate into Common or Preference Shares.


To set foot in the global field, Reality Cable Network LTD (RCN) needs, at

least, USD25 million invested in the five most lucrative media organizations in

the world. This will make way for the Board of Directors to sit in at meetings with the management of these conglomerates. Thus, enabling Reality Cable

Network LTD (RCN) to be up-to-date with what is going on in the industry. It

will also ease the approachability of these firms, being shareholders. RCN also

needs to reciprocate this gesture by way of giving free bonus shares worth

USD5 million to these media giants to rope them in to the firm.

4.2.3 Market Trends:

Home Division:

In the media world at present, reality shows are hot cakes in many fronts,

including America, UK, Canada, Australia, and Ghana. In Ghana, the reality shows being aired are not generating revenues as it does in the West, simply

because the media organizations do not harness the full strength or the

potential of their products. RCN has come to stay. It will set the pace for other

media organizations to follow. RCN is looking into building one of the largest and best theatrical buildings in Accra, Ghana, to take the entertainment

industry ahead of time. The building will make room for shopping centres,

movie halls, offices, hotels, banking hall, serviced apartments, and food

franchises. It will in itself generate millions of dollars in revenue as an asset to

the firm.


The richest media organizations specialize in Mergers and Acquisitions (M&A). They do not only focus on their areas of specialty, but look into the market

values of other media organizations, and buy them out. RCN will pursue this

agenda to the fullest, since it is the most rewarding way to raise capital,

expand infrastructure, and have influence at the marketplace.

Page 18

4.3 Service Business Analysis:

Home Division:

Reality Cable Network Ltd (RCN) will spread out in its service areas to cover TV broadcasting services, media production, and media franchising. It will look into

the needs of all the big media organizations, engage expertise, and resources

to meet these requirements. In Ghana, the clout of the media is not yet as

strong as the West. Therefore, RCN will endeavor to bring to the attention of almost all the media organizations in Ghana to upgrade their systems, create

more fanfare, and generate revenue by so doing. This will boost the local

economy.

1. Production companies: RCN will be working with the best production

companies in Ghana, starting with award-winning TV production company,

namely LTV Films Ghana.

2. Photography companies: RCN will also work diligently with award-winning

photographic companies in Ghana and abroad, especially to produce the photo albums for sale at the open market.


Since RCN will undertake road shows, country tours, and special events, this

department will be soliciting for branding rights, fund-raising for charities, and

the selling of RCN-branded products.


RCN will be producing reality shows for other media organizations, such that

will bring in extra revenue to the company. It will run different programmes on other networks and generate revenue from advertisement. RCN shall also go

into movie productions. This angle of business generates hundreds of millions

of dollars annually to media houses. RCN is also looking at selling the products

of notable media houses on its website. This area of generating revenues has

always yielded billions of dollars to Amazon.com and eBay.

1. Marketing services for Other Networks:

o Industry magazines: Since RCN will be publishing the memoirs of its notable contestants, issue travel guides on its own magazines, it will

use this aspect to address major industry news and events. This will

generate millions of dollars, like Time Magazine, if it is sold around the

globe.

Page 19

o Internet websites: RCN has approached webs.com to provide

Internet services on behalf of the company. The website is due to launch. However, once finance is available, the Reality Cable Network

Ltd will run the website, registering with a company-based credit card,

issued by its banker.

2. News Programming:

o Network-based programming: Affiliates belong to network news services

which provide daily programming on hourly feeds. RCN is looking at creating a division that will air its own news and syndicate it to other media

organizations at a price.

o Subscription programming: For an annual rate, any affiliate may subscribe to these programming services. Their downside is in limiting the

stories they offer to one specific topic such as healthcare, travel, or politics,

rather than offering a wide variety of topics from which to choose. In

addition, stations do not have a choice in which stories to run each day.

Either stations can take one story daily from a satellite feed, or stations are sent a week of stories on tape.

4.3.1 Business Participants:

Home Division:

RCN is looking at bringing all the best consultants in the media industry to bear

on its services and products. Moreover, professional marketing and public relations organizations are veterans of the media world, and can go a long way

to meet the financial needs of RCN in quick time.


Student Services:

To attract a lot of audiences, student power is indispensable. The numbers of students in the world over are in hundreds of millions. By looking at products

that interest students worldwide and adding them to the sales tactics of the

company, much awareness can be created, and sales will sky-rocket as a result

of these features.

Page 20

TV Station Services:

While there are many production companies, few offer news to TV stations. Most programming services are based in larger markets where their products

have taken hold. They offer topic-specific news for TV stations nationally and

internationally, and at a high cost. Most generate stories by one well-known

personality and offer only one story possibility per day. They make the majority of their revenue from mid-to-large markets. They have a strong position in the

industry, and because they are topic specific, do not threaten each other.

Internet news on demand, where viewers can watch their favorite stations from

their home computers, is the biggest threat to well-established media firms. Therefore, RCN will be looking at exploring both avenues to broaden its revenue

base.

4.3.2 Distributing Services:

Home Division:

The public are accustomed to going into retail locations to make purchases or

place orders for DVDs, branded T-shirts, and Boxers. Having an RCN storefront will provide them with the opportunity to purchase RNC featured products. RCN

will host presentations to explain its products at various outlets such as

retirement villas and apartment clubhouses.


Usually, TV Stations buy newsfeeds directly from programming sources. A sales

representative may call or visit a station for a programming product, or the station may purchase directly via the RCN website. Initially, it will be vital for

the staffers of RCN to visit one-on-one with small market stations to obtain a

base clientele. Those stations across the country will be targeted via telephone

and direct mailing promotional kits. Those stations which responded to RCN initial marketing survey are prime, first clients, especially those who have

already defined their needs according to the company’s surveys.

4.3.3 Competition and Buying Patterns:

Home Division:

As with any retail line, TV broadcasting services in Ghana feel more comfortable

and believe they are truly getting their money's worth when they are given one-on-one attention. It is this attention that RCN will give to them in its 30-

minute free consultations. RCN prospective clients will be more inclined to refer

its businesses and products to friends and family members if they believe that

the company does not see them as simply a sale, but as people with needs

Page 21

being met. This initial attention to detail will also provide RCN clients with the

knowledge that the company will produce exactly the videos that they have in

mind.


TV stations are prone to purchase news stories based on the bottom line. If one programming service becomes too expensive, the station will spin off to

another programming service for a few thousand dollars less. Small market TV

stations do not have this option, as most services are too expensive for their

budgets.

RCN will offer quality news stories at a very competitive price. In fact, half the

cost of most other programming services in order to gain access to those

smaller markets. In addition, having a variety of news topics makes RCN a hot choice. Stations do not have to spend thousands for only one brand of news,

i.e., health stories. They can choose from a wide variety, health, politics,

financial, innovative, unusual, personalities, etc.

4.3.4 Main Competitors:

Home Division (TV Broadcasting Services):

Channels Showing Reality Shows:

Strengths: In Ghana, the Channels showing reality shows basically buy the

programmes from outside sources other than making their own productions.

Weaknesses: Most TV stations do not bother to show reality shows because

they neither can produce one nor obtain the broadcasting rights of trendy

reality shows in the market.

Independent Companies:

Strengths: RCN is modeled as an independent company with creativity and

gusto. It can easily source for capital, and compensate its financiers in leaps

and bounds. Currently, it gives 100% returns to financiers, 20% bonus on capital sum, and annual dividends to financiers with Common Stocks or

Preference Shares. RCN jump-starts its business by taking onto the model of

the big five. It will sooner or later be in the same league with them, having

the backing and support of hedge-fund managers.

Weaknesses: Due to time constraints and the need for finance, the

objectives of RCN cannot readily be implemented to quickly capture market

share.

Page 22

5.0 Strategy and Implementation Summary:

Home Division:

1. Reality Cable Network Ltd (RCN) will commence a one-and-all campaign to

create awareness for its products and services. The marketing efforts need to focus on (a). Introducing the new global reality show, World Tribal Hero

(b) Telling our audiences worldwide why they and their friends need to

watch it.

2. Emphasize excellent service, great quality, and lasting satisfaction. Especially as this is a fairly new product to be launched into the market,

viewers need to know that the company will cherish their memories and

create quality products.


1. Tap into the most lucrative sources of revenue by modeling the big five

media houses.

2. Building enormous capital by selling Common Shares and Preferred Shares. On occasions, issue large-scale bonds to investors and other public

institutions.

3. Work with seasoned industry experts.

4. Have great political figures to advise on administrative policies and issues. 5. Cut the chase by trying as much as possible to be number one in the media

business.

6. Give the best returns to investors, financiers, and stock-holders.

7. Create a great corporate culture and governance structure. 8. Make an impression with the company’s model of screenplays.

5.1 Competitive Edge:

Home Division:

The competitive edge of producing reality shows in the company business

system, which allows it: (A). To produce large numbers of DVDs while retaining

quality, thus giving more customers a grade A product with a short turn-around time. (B) To maintain consistency at every location, so customers can be

assured that they will get the same quality at one store that their friends/

family members have received at another. (C). To use the largest media

distribution network to capture the global market for film and DVD sales. (D). To work in close proximity with an investment bank that establishes a corporate

bank account for RCN.

Page 23


For TV stations, RCN’s competitive edge is having a variety of news topics to offer, and at a much more affordable cost to small market TV stations than

larger programming services can offer.

For Media Production, the company’s competitive edge is to have the best and all-encompassing reality show to touch the lives of all on the planet.

For Media Franchising, the company will sell its branded products and those of

other media houses to have a great deal of market share.

5.2 Sales Strategy:

Home Division:

1. The company needs to sell the memories and emotions of these reality show

productions, not the products per se. While RCN produces DVDs and movies,

the company creates and taps into a lifetime of emotions cherished its

customers. The advertising and marketing need to reflect this concept. 2. The board of directors and other staffers need to understand exactly what

the services of RCN are, so that its customers will also understand. The

customers must feel confident that the corporation values their memories

and emotions as much as their own, and will treasure them individually. An order for a DVD or movie is not a product order, but a piece of family gold

that the company is holding in safekeeping.


1. RCN needs to sell both the company and the product. As this is a new

venture into an antiquated system, generating sales will require an

enthusiastic approach in order to renovate the TV news programming concept. In-person sales are essential in the primary stages of generating

sales. A reputation for service excellence, news variety, and affordable

pricing will continue the momentum of sales in the future.

2. RCN has to sell its products, services, and support to schools, hospitals, and other charities to make waves in the local and international markets. Gaining

the support of deans and professors is a vital element to generating

inventory on a yearly basis. By developing a loyal clientele of professors,

RCN will ensure continued sales growth annually.

Page 24

5.2.1 Sales Forecast:

The annual sales forecast is estimated at USD3 billion. This does not include

other miscellaneous incomes.

5.3 Strategic Alliances:

Home Division:

Strategic alliances with TV production companies, DVD-distributing firms, media

consultants, and TV stations worldwide will be key to generating sales in the

first few quarters. RCN plans to initiate a co-marketing campaign, by possibly

adding on 30-second commercials at the end of each video, promoting a wide variety of its products. These will be tasteful and placed at the end of the tape,

but it will also co-promote its institutional investors. In the future, RCN can sell

these spots to like businesses to generate revenue.

Additionally, RCN alliances with retirement villas will be instrumental from start-

up. While these will not involve co-promotions, it will be necessary to build a

strong relationship, so the villa officials welcome RCN to their facilities.


RCN heavily depends upon building a strong alliance with the top-five media

organizations to create substantial inventory to generate sales. The greater the

size of inventory, the greater the variety the company has to offer stations and the public. RCN needs to concentrate on making as many contacts with

advertising agencies as possible. If RCN cannot offer consultancy and public

relations firms a marketing position, then it will have to market its own

products in different media outlets. After the first year, the sales inventory will grow at a consistent rate. However, the first year's inventory size can well

determine the company's sales success.

5.4 Marketing Strategy:

Home/Travel Divisions:

1. Build relationships with primary target corporate clients/ customers (Market

Segmentation section) and like businesses, such as Comcast, NBCUniversal, NBC, and Multi-TV.

2. RCN shall emphasize service and quality while building a strong referral

base.

Page 25


1. Emphasize variety and affordability. 2. Emphasize service while building relationships.

3. Focus on tribes with TV stations and broadcast communications programs.

4. Focus on small market TV stations, bottom 115 Nielsen markets.

5.4.1 Positioning Statement:

Home Division:

RCN will position itself from the start as a strong media organization, well-

capitalized, and meeting milestone after milestone. RCN will break into all TV

markets and garner market share. It will take great care of the needs of its

sponsors, financiers, and shareholders. This will speed up the success of its future businesses and take the company public someday in the no distant

future.


RCN will sell its shares to other media organizations, and it will buy shares in

these firms as well. During the time that RCN remains a private limited liability

company, it will rely mainly on its bankers for financing activities, and grow the

company to a level that it will be well-capitalized to take care of its investing needs. RCN will also get into co-sponsorship deals to make name for the brand,

and possibly accrue miscellaneous incomes from so doing.

5.4.2 Pricing Strategy:

Home Division:

RCN business system has helped define its pricing strategy. By making the productions both time-efficient and consistent in high quality, the company can

maximize its pricing to acceptable market levels. RCN strategy is based upon

the fact that the company is introducing new reality show formats into the

marketplace, with no previous history for doing so. As RCN filming style

becomes more popular, the organization will be able to adjust the pricing accordingly. We are offering different packaging styles from which the

company’s clients/ customers can choose. By charting the most popular

package, the company will better determine the right price for its products.


RCN’s pricing strategy is key to its offering. If RCN charges too much, or even

3/4 the price of larger programming services, the company is undercutting its

Page 26

potential orders. The market of small market stations cannot bear the higher

prices offered by larger programming services.

Likewise, by offering a free resume and marketing service to different tribes on

the Internet, RCN is ensuring the continuity of interest on its products and

services. The organization needs to be positioned to offer in advance payment

for most of its products and services to create room for greater cash flow.

5.4.3 Promotion Strategy:

Home Division:

Initially, the company will depend upon presentations and business

relationships to reach new corporate clients/ customers.

1. Retirement villas "social nights:" RCN will invite people from retirement villas

to attend certain nights set aside at those locations for residents and family

members in which the firm will present dinner nights, musical presentations,

and photo memories through discussions and brief video presentations.

2. Photographers, photo processing centers, and travel agencies: RCN will form

business referral relationships with like businesses to promote its product

and services.


RCN depends on direct contact with Kings, Queens, princes, princesses, village

heads, deans, and professors as its main way to reach out to contestants. That way of reaching out will be made to all tribes.

1. Promotional Kits. RCN will be sending colleges, universities and technical

schools with TV stations on campus promotional kits which will include its objectives and student guidelines for various shows.

2. Campus Visits and Phone Calls. RCN will contact the elites to gain the

support needed from tribal men and women, who in turn are encouraging

their kind to partake in the making of the World Tribal Hero show.

5.4.4 Distribution Strategy:

Home Division:

RCN’s primary distribution of DVDs, films, and branded products will be through

its storefronts in various countries, which will also be the order centers,

consultation locations, and production offices. To make it easier for clients/

Page 27

customers at retirement villas, RCN offers to accept orders at and deliver to

these locations.


RCN distribution will focus mainly around its website, taking orders and

processing them through direct mailings. In the initial period, the company will be distributing DVDs during person-to-person presentations.

RCN is prepared to mail on order, via the USPS. Stations may order for regular

deliveries, up to overnight shipments, depending upon their needs.

Milestones:

Part of the business's success will be based on planned tasks and timely completion of DVD productions.

6.0 Management Summary:

Reality Cable Network Limited (RCN) is wholly owned and operated by its

founders, Selassie Nyadzi (Director of Corporate Affairs), Paul T. Patrick

(Director of Finance), and Herbert Tombia (Director of Administration. It is a

start-up with immediate plans for hiring top-notch management team. Each

employee's responsibilities will be outlined in the company’s business system "Operations Manual." The company will be running with three high-profiled

personages, including Hon. Zita Okaikoi (Former Minister of Tourism and

Information), Dr. Ekwow Spio-Garbrah (Former Minister of Education,

Communications, and Mines and Energy. Also, Ghana ambassador to the United States of America), and Ms. Cecile Frot-Coutaz, Chief executive,

FremantleMedia Ltd, a division of Europe's largest TV, radio, and production

company, Bertelsmann's RTL Group.

As the company grows in leaps and bounds, the board of directors will evaluate

which positions need to be filled first. Long term growth includes plans for a

Chief Executive Officer (CEO), who will report to the Director of Administration

and handle all corporate operations. Three managers will answer to the CEO,

one per division. Each manager will be primarily responsible for accounting and marketing within his/her division, and will handle all hiring/training needs. RCN

currently receives a great deal of advice from outside sources, such as its

accountant and attorney. However, the organization follows the advice, which

best meets its goals and needs.

Page 28

6.1 Organizational Structure:

As a start-up, the divisions and departments are inter-related and handled for

the most part by Herbert Tombia. With time and revenue, the firm will expand

to accommodate several departments: Sales & Marketing, Service and

Administration, Product Development, and Finance. Each division manager will fill these departments according to specific needs and the company's business

system operations manual. The following chart outlines the anticipated

organizational set-up for the first three to five years of Reality Cable Network

Ltd (RCN).

Organizational Chart:

Corporate Clients and Customers

Customer Service Center

Investor Relations

Public Relations Officer

PRO

Managing Director

Tours and Travel

Managing Director

Sales, Promotions, &

Marketing

Managing Director

Human Resources

Chief Executive officer

(CEO)

Director of Corporate

Affairs

Director of

Administration

Director of Finance

Chairperson

Board of Directors

Chairperson

Advisory Board Chairperson

Foreign Advisory Board

Page 29

6.2 Management Team:

Selassie Nyadzi: In charge of corporate affairs. He is great at managing

human and material resources. He has being an actor in the TV sitcom shows.

He will handle all corporate matters of the firm, in and outside the organization.

He is a great entrepreneur to reckon with.

Paul T. Patrick: Excellent businessman. He has been in the import and export

business and has great managerial skills. He will handle the financial matters of

the organization. His business know-how and entrepreneurial skills are indispensable to the success of the organization.

Herbert Tombia: A lawyer turns into businessman. He has operated an

investment company, information technology firm, and real estate businesses in different countries worldwide. He is proficient at managing businesses, and

remains in charge of administrative matters, including recruitment and

termination of appointments in the company. He is an entrepreneur at the core

of his being.

6.3 Management Team Gaps:

The Board of Directors believes that the organization has strong leadership for

developing the concept behind Reality Cable Network Ltd (RCN). At present, the weakest area is finance and corporate resources to meet the needs and targets

of the company. RCN has hired Ernst and Young Ghana to advise on accounting

and business development matters. Besides, by hiring the guidance of Hon. Zita

Okaikoi, Dr. Ekwow Spio Garbrah, Ms. Cecile Frot-Coutaz, the company will be in a good footing to handle all of its business affairs with excellence.

6.4 Personnel Plan:

Benefits:

The Board of Directors resolves to hire the best talents available worldwide. In this way, all departments will be fully functional. This will enable the

organization to grow at a very fast pace. In the end, the company will realize all

of its significant objectives.

Page 30

7.0 Financial Plan:

The most important element in the financial plan is the critical need for capital

to assist in business operations through the remaining start-up process, and to

maintain a positive cash balance for the first fiscal quarters in 2013. RCN does

not anticipate any changes to its financial plan through accounts receivables or inventory, as the company operates upon the "payment upon receipt" principal

for all goods and services. During the past four months in the start-up process,

the directors have largely committed to incorporating the company and

sourcing for financial opportunities with personal credit lines and long-term loan options.

7.1 Important Assumptions:

The financial plan borders on important assumptions. The key underlying

assumptions are:

The company assumes access to equity capital and financing, sufficient to follow and maintain its financial plan. The directors anticipate their financing to

hold higher long-term interest. They also assume that as the company grows, it

will be able to utilize a larger credit line, decreasing its expenses in cash.

Likewise, its short-term credit line will be available with a lower short-term

interest rate, making more cash available.

The directors assume many TV markets are, or will become, Internet proficient.

They also assume that most tribes will become Internet proficient in the future.

The majority of its long-term payments are for one time, or long-term purchases, which will not need replacement in the first five years.

7.2 Key Financial Indicators:

RCN estimates consistent turns on inventory, as its inventory is available for

sale on a constant basis. The company’s Gross Margin increases with increased

sales, but as the firm has a very low direct cost of sales, this number will only

increase fractionally compared to the selling of less tangible assets, such as

broadcasting rights, branding, and franchising.

Sales and Operating Expenses are the company’s closest measurements in its

forecasts. While sales increase dramatically, operating expenses increase with

new stores, additional employees, and taxes. However, by maximizing the number of employees within each store, the organization is also maximizing its

location and limiting further expenses that additional storefronts would incur.

RCN is also able to save drastically on advertising and promotion expenses,

which will naturally increase with each new location.

Page 31

7.3 Break-even Analysis:

The company assumes running costs which include rent, utilities, office

expenses, and an average of travel, advertising, and miscellaneous costs.

Miscellaneous costs are equal to quarterly costs such as business TV series and movie productions, branded products and consultancy, and occasional

equipment rental. Payroll increases every other month as the firm adds new

employees.

7.4 Projected Profit and Loss:

Profit and Loss projections look very good, with the usual start-up investments

limited to the first three months.

7.5 Projected Cash Flow:

Cash flow projections are good. There are only three months of negative cash flow for the foreseen first year, and the all-important cash balance shows

steady increases.

7.6 Projected Balance Sheet:

The assets in the balance sheet will show steady increase in net worth over the

life of the plan.

7.7 Business Ratios:

Business ratios for the years of this plan will all be positive over the life of the

plan.

Conclusion:

Reality Cable Network Limited (RCN) is already incorporated. The Registrar of

Companies, Ghana, has allotted USD100 million in corporate shares to raise capital to run the company. The Board of Directors retains 60% of the approved

corporate shares as equity and ready to give out 40% to other shareholders.

However, should MTN and Stanbic Bank finance this project with an estimated

USD83.5 million, the Board of Directors will have every reason to approach the office of the Registrar of Companies to raise the corporate shares to

USD208,750,000. This will be convenient for all parties. The Board of Directors

have also resolved to instantly issue USD7 million to MTN as Preference Shares;

and USD160 million to Stanbic Bank as Preference Shares, too. At the end of

the trading year, with sufficient cash flow made available, these liabilities will

Page 32

be settled by way of buying back the shares. Nevertheless, it is up to either

corporation to retain its share portfolio until further notice.

***

Documents

Reality Cable Network Ltd-Business Plan