Prelude
This is the fifth entry regarding my business plan. This is part of a series where I will be posting my business plan online. If you are curious as to why I would post my business plan online, visit my “what’s the business plan” post.
Operations Scope and Costs
Overview
The main output of Greg Lam consulting is knowledge work. Whether it is organizing or filming a commercial, the real good being purchased is the knowledge provided. Delivery of goods is almost completely done in digital formats, such as word documents, excel spreadsheets, online video, and websites. Occasionally there may need to be physical goods such as DVDs or printed goods, but these will be the exception as opposed to the rule, and these products will be secured on a as needed basis (little if any stock will be kept on hand). Essentially, inventory costs will be non-existent and a small fraction of revenues.
Production Process
The production process has four main steps:
- Organizing a production
- Procuring resources
- Providing the service
- Billing for the services provided
These steps can be put out of order, repeated, and mixed up, but those are the four main steps.
Business Costs
The main fixed costs to the business are as follows:
- Communications
- Vehicle
- Equipment rental
- Advertising/promotion
- Bank service charges
- Dues and subscriptions
- Office supplies
- Business licences and permits
The main variable costs, which are also reimbursable expenses are:
- Media
- Transportation (namely parking)
- Content (graphics, photos, music rights)
Variable costs that are not reimbursed are:
- Equipment purchases and upgrades
- Software
- Meetings/meals
Logistics
Logistically, scheduling conflicts will be the biggest challenge. While it doesn’t happen too often that more than one client wants to book Greg Lam Consulting at the same time, it will happen more often as Greg Lam Consulting become busier.
To avoid conflicts, Greg Lam Consulting has taken on contracts that have flexible time arrangements, such as web development, online marketing, bookkeeping, business consulting, and business plan writing. In the future, the move from active income to passive income will also aid in alleviating the need for scheduled work.
In the short-term, work that cannot be fulfilled due to scheduling conflicts will be referred or sub-contracted. Lastly, if scheduled work increases to a certain point where too much desirable work is being turned down, the decision will have to be made on whether to take on employees that can fulfill the contracts.
Suppliers
A easy-to-manage aspect about Greg Lam Consulting is that it does not have any crucial suppliers that are relied upon for the delivery of services. Additionally, there aren’t any main suppliers. There is the purchases of equipment (cameras, computers, etc…), media (camera tapes, DVDs, etc…), and services (internet hosting, graphics, music) but all of these services can be provided by a variety of suppliers, and all usually with same day notice.
If Greg Lam Consulting were in manufacturing, than a delay in key items, even cheap items, could result in huge losses both financially and in reputation. For the business services provided, a web host may go down or a piece of equipment break, but these problems can be fixed within the same day through alternative suppliers if current suppliers are unable to address the problem.
Since there is little reliance on suppliers, credit with suppliers will be unnecessary.
Management Background
Management Experience
Greg Lam, the principal of Greg Lam Consulting, has the following qualifications, experience, and skills:
- Seven years of experience managing all aspects of three small businesses.
- Business degree with a specialization in marketing from Simon Fraser University.
- Completion of Douglas College Self-Employment Program
- Highly proficient at creating digital media such as video, photography, and websites, with a specialization in video production.
- Experience collecting and using data to identify customer attributes, segment a market, develop targeted marketing campaigns, and tailor products and marketing strategy accordingly.
- Excellent communication skills and considerable experience making business presentations.
- Has successfully received funding from the Canadian Youth Business Foundation, the Business Development Bank of Canada, and Vancity (through the Canadian Small Business Financing Program)
The strengths of Greg Lam are his ability to be hands-on in many different business areas, see the big picture, understand how a product not only has to be of quality, but also has to be known. Weaknesses are in the area of sales and attending networking events. Sales are critical to revenues and attending networking events will be a major component of promoting the business. A key thing to remember is that for both sales and networking, the focus has to be on the needs of the individual or business and helping to solve them. If the attention is put on the individual or business and not Greg Lam Consulting, than this will help overcome the fear of trying to push or sell someone.
Support Groups
Being able to get quality advice when you need it is essential to a business. Greg Lam Consulting receives and gives advice with the following groups:
- Current network of business owners: Greg Lam Consulting currently meets with successful business owners on a regular basis.
- BCPVA (BC Professional Videographers Association): Greg is an executive member of this organization. It is a great resource for learning, industry contacts, jobs, and people and companies to refer.
- SEOmoz: SEOmoz.org provides SEO (search engine optimization) software, but more importantly, SEO advice. Advice comes in the form of their daily blog, SEO guides, and their expert question and answer resource.
- Third Tribe Marketing: thirdtribemarketing.com provides both educational seminars on online social marketing as well as private discussion forums.
Management Structure
Simply put, the business is Greg Lam, Greg Lam is the business. For year one and year two (2010 and 2011), there is very little chance of employees being brought on.
If extra help were needed for the business, these would either be referred, sub-contracted, or done as a partnership.
If and when employees need to be brought into the business, the focus will be weighted on the character of the person as much as their current skills and experience. A person who has the right attitude and ability to grow will be much more valuable than a skilled but person of poor character.
Go forth to the next section, the risk aassessment.
Go back to the business plan page.
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