Alphagraphics business - Free Essay Example

Sample details Pages: 25 Words: 7412 Downloads: 1 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Executive summary This plan is being submitted to support a request for funding of 100,000 through a business development loan under the small firms loan guarantee scheme and an overdraft facility of 20,000 to support growth plans for the business. This will support the development of a new AlphaGraphics business and the immediate acquisition of a small independent operation they plan to roll into the new business once they complete the lease agreement on their desired property in LS1. The principals of Business Design Print Ltd have secured the AlphaGraphics franchise for Leeds and plan to operate from the city centre with effect from March 2004, leveraging the brand that has been present in LS1 since 1989. They propose to invest a total of 100,000 in the business. Don’t waste time! Our writers will create an original "Alphagraphics business" essay for you Create order Alphagraphics is a full service printer and operates around 300 stores around the globe with 15 in the UK. There is a clear market opportunity in Leeds and the industry trends all indicate the situation is changing and improving. The AlphaGraphics vision for e-commerce represents enormous potential to differentiate our service from both independents and other franchises and when coupled with operating systems that comply with ISO 9002 they make a compelling business case that will succeed in the marketplace. This franchise start up will comprise a sales team of three people (two of whom have many years of experience in the printing industry and one of them was Managing Director of AlphaGraphics UK from 1991 to 1995) who are all investing in the business plus a store manager; each of them is scheduled to attend the four-week New Franchisee Training course. This combined knowledge and insight will deliver an aggressive approach to sales supported by strong adherence to the business systems that will lead to operational profit and the long-term success of the enterprise. The business follows the AlphaGraphics model whereby the business trades through start up losses to move into positive cash flow and profitable operation in year three. The average turnover for Alphagraphics is 800k pa and beyond this level of business they are capable of generating annual profits in the 14-20% range. The principals have plans to develop three businesses across Yorkshire, creating a network of self-reliant businesses that will create wealth for all involved. AlphaGraphics After successfully building its proprietary operating systems into a successful and profitable business model, AlphaGraphics began franchising its concept in 1979. By the late 80s AlphaGraphics was aggressively pursuing the global marketplace, becoming the first US printing franchise to open internationally with locations in Hong Kong and London. Today, AlphaGraphics has over 300 locations in fourteen countries. Through continued investment in technology and the innovative development of business practices AlphaGraphics is able to offer an expanded portfolio of products and services well beyond that of the competition. AlphaGraphics delivers high-quality products to its customers; its a capability that has helped to set it apart and is a key to the future success of the franchise. In 1997, AlphaGraphics became the first franchise system in the industry to earn ISO 9000 Certification for the international quality management and assurance standards of its operating and performance-measurement systems. New locations open with ISO 9002 quality systems in place as all store personnel undergo intensive ongoing training to maintain system standards. Future customers can be confident that their projects will be completed on time and to their complete satisfaction. Strategic alliances AlphaGraphics has formed strategic alliances with a broad spectrum of vendors and industry giants. Sharing research, emerging technology and resources, these industry leaders work together with AlphaGraphics to strategically develop innovative applications for the benefit of the many business customers that they serve. Why do businesses need AlphaGraphics? The compelling reason businesses use AlphaGraphics fall into one of three categories and sometimes all three: * Turn-round time quick printing requires a rapid response, with capacity on tap to meet pressing needs * Run length short run lengths are characteristics of work placed locally and at short notice * Complexity of job used to describe work that is beyond the limitations of the in-house staff but too difficult (and small) to place with a large commercial printer Customers who use AlphaGraphics for the first time usually do so for one of these reasons. Once a customer relationship has been started there is the opportunity to do other work and to expand beyond the initial basis of use. AlphaGraphics offer a total solution to non-corporate SMEs. This does not mean that corporation are beyond their reach, rather it points to the fact that non-corporate clients are more likely to require the full range of services that AlphaGraphics can offer. Market growth The projected growth for printing is forecast at 7%pa (Source: CAP Ventures); according to IBM the forecast growth for digital printing is 10% CAGR; Xerox have recently published their forecast for colour electronic printing and they believe this to be growing at 30% pa; IBM also reported that promotional literature and printed items are increasing, from 25% to 30% of the total promotional budget. Customer Profile The significance of print to organisations can vary greatly. It is therefore of immense significance to understand the importance of print services to any particular organisation. According to a recent survey by PIRA[1] in around 50% of organisations print can represent a large absolute value (conservatively estimated at 2% of turnover) and a large proportion of overall purchasing costs. Achieving cost savings and minimising price is very important. A further 40% of organisations view their print purchases as mission critical, requiring them to adopt a strategic purchasing approach. The remaining 10% class their print purchases as non-critical. To succeed it is imperative to fully understand the importance of products and services, financially and operationally, to prospective customers. Offering a sale focused solely on cost, without understanding the scale and range of the organisations business, is unlikely to be considered seriously. The successful approach will be one that seeks to understand and add value rather than attempt to deliver a lower cost solution. Strategy The provision of on line ordering to minimise cost for commodity items is a core part of the business operating system. An integrated marketing programme together with thorough sales training to exploit all market opportunities will combine to form the basis of knowledge necessary to develop corporate accounts. Business Design Print Ltd AlphaGraphics Leeds Business Design Print Limited was formed in October 2003 and will begin operating and trading as AlphaGraphics in February 2004, initially from a virtual base while the business location is established, decorated, equipped and prepared for live operation. A March 2004 opening is anticipated. Shareholding The principal shareholder of the business is Paul OSullivan. Two further shareholders, Stephen Dudley and Andrew Macdonald, represent the sales team and have visibly demonstrated their commitment and enthusiasm by investing in the business. The longer term plan of the shareholders is to establish a network of AlphaGraphics centres within Yorkshire, leveraging their knowledge, skills and experience to bring this to fruition over the next few years. Developing a successful business in Leeds is a pre-requisite for this to happen and remains the focus of the team. Location Earlier this year the existing Leeds franchisee decided to opt out of the AlphaGraphics network with effect from October this year in the belief that the marketing and purchasing power of AlphaGraphics no longer provided them with value for money. Their customer and equipment profile had also evolved beyond a typical franchise business in any case, encouraging them to operate more like a small commercial printer with an out of town business. The opportunity to capitalise on the re-establishment of the brand within the business district, leveraging the goodwill generated over the last 14 years by AlphaGraphics. This should enable rapid sales growth to be achieved, perhaps beyond the normal expectations projected for a start-up operation Territory The territory allocated as the Area of Dominant Influence (ADI) comprises a series of postcode districts that contain at least 2,500 businesses. An analysis of the businesses by postcode and by vertical market is shown in the table below. Vertical Markets Postcodes LS1 LS2 LS3 LS11 Architectural 35 38 9 28 Commercial 306 110 31 131 Construction/Engineering 4 9 11 93 Design 26 21 9 26 Education/Training 13 28 6 30 Finance 192 42 12 39 Government 60 44 11 48 Health Services 34 16 2 25 Legal 94 10 7 4 Leisure Tourism 306 132 25 124 Manufacturing 54 50 18 193 Property 88 17 4 22 Retail 349 225 21 229 Transport 7 7 3 50 Totals 1568 749 169 1042 We are not restricted from selling to any other Leeds based businesses; rather the ADI prevents the franchisor from allocating this territory to any other franchisee. Within our ADI we have over 3,500 businesses and we know there are as many again in LS4, 5, 6, 7, 8, 9, 10 12, the postcodes within easy reach of being serviced by our team. Acquisition opportunity: HH Print HH is a partnership owned by a father and son although the father is silent in the deal and the son has run the business alone for the last three years. In this time he has grown the turnover from 75k pa to 116k pa (to their September 2003 year-end). The father is Ray Schofield and he and Paul OSullivan worked successfully together in the mid 90s for a few years. Ray bought the business with his son as something to fall back on but his other venture took off quite quickly and he left his son Neil to soldier on by himself. Neil now wants to leave as the pressure of operating as a small independent is taking its toll on him. AlphaGraphics personnel have inspected the assets of the business with us and we subsequently offered 15,000 for them. In addition we have offered 25,000 in total for the goodwill of the customer base, to be paid retrospectively in two instalments once we have completed operation for one year. The father is prepared to guarantee the turnover for the first year and the payments will be linked on this basis, reducing the risk to our projections. The business currently employs a printer and a designer who is also the bindery assistant. We intend to offer these staff a role with AlphaGraphics with no TUPE obligations as we are acquiring assets and not the company. The business operates from premises in Pudsey, a suburb of Leeds and the customer base is both local and city centre based. We do not anticipate any problems in retaining the customer base and believe we can grow individual accounts further as we will have a wider range of services to offer to them. Customers AlphaGraphics Leeds will be a full service printer, primarily selling to businesses employing between 10 and 100 staff. The profile of people who typically control print expenditure within a company is shown below. Source: PIRA report The PIRA report also suggests that, as many as ten or twelve different people place orders for print and over 60% of all orders are spot purchases despite the fact that many organisations seek to develop a contractual relationship with their suppliers. Account development skills are therefore as important as the sales skills needed to win the first piece of business at the outset. The mix of skills within our sales and customer service team will ensure we are fully capable of winning new business and developing customer accounts to generate repeat orders. We will be subscribing to the AlphaGraphics Integrated Marketing (AIM) programme as this provides the means to consistently mail businesses of our choosing, focusing on either products or on services for a particular vertical market. Sales plan The nature of the market we are involved in is that all our potential customers will already have a printer; the lines of competition are increasingly blurred therefore we need to steal market share. To achieve this we will pro-actively sell our differences and be a sales driven organisation. The AIM programme delivers service and product specific direct marketing initiatives to a series of contacts provided by the sales team in the business. Typically this programme targets 100 named contacts per month but we have allowed for twice this number to rapidly re-establish the brand and create demand. AIM also provides consistent and regular analyses of sales using Target Smart, generating a monthly review of sales by vertical market, product mix, measuring order value and frequency. The results from Target Smart drive the subsequent mail campaigns. ACT!, the Customer Relationship Management software, is also used to provide sales with a contact management tool that will provide the contact details to feed into AIM and support sales management. Initial sales activity will focus on SMEs targeted with prospecting visits to establish likely demand and assess the current satisfaction levels with current suppliers. This will be supported with direct mail, telephone activity and further visits. As well as dealing direct with prospective customers in our ADI we will also seek to exploit the trade relationships with larger print companies (e.g., Pindar, St Ives, Communisis, Prism, Radius, Red Letter, etc) who often view the smaller order values we deal with as a potential problem as it can absorb too much of their time for little return. Sales expectations by person by year Name Yr 1 Yr 2 Yr 3 Yr 4 Paul OSullivan 140k 200k 200k 200k Stephen Dudley 140k 200k 250k 300k Andrew Macdonald 90k 150k 200k 250k To Be Hired mid year 2 30k 120k 200k To Be Hired start of year 70k Total 370k 580k 770k 1020k Two of the sales people have extensive print knowledge and experience, resulting in their sales targets being slightly higher than the third sales person for the first two years. As time moves on it is anticipated that management responsibilities will limit Paul from achieving higher sales numbers. Based on figures from across the AlphaGraphics network it is reasonable for a sales person with no prior print experience, such as Andrew, to achieve 60-100k in their first year. It is our intention to allocate the majority of the HH accounts to Andrew and to ensure we meet the customer base during January 2004. People The creation of AlphaGraphics Leeds is an opportunity to bring together a team of experienced, successful individuals with complementary skills who will form the core of the Leeds team. Paul OSullivan Paul has held senior positions in the printing industry since 1982, including a five-year spell (1991-95) as Managing Director of AlphaGraphics UK, the franchisor organisation. This provided Paul with remarkable insight into the AlphaGraphics business model in the USA and the UK and the opportunity to interact directly with many successful franchisees around the world. A solid understanding of why some franchisees failed was also gained, creating confidence in the approach to developing a successful operation. For the last five years Paul was CEO of Pindar Systems, a global software business that bought itself out of Pindar Group ownership in February 2001 through an 8m venture capital fund raising. During this time the company introduced two new products and established itself as the market leader in the USA and Europe through an aggressive sales program. Extensive periods working in the USA (more than 60 weeks over the last three years) will ensure that Paul brings the positive elements of the USA customer service culture to their business, enabling AlphaGraphics Leeds to establish a unique competitive advantage in North Yorkshire. His business management skills (enhanced in 1992-94 whilst working through his MBA at Durham University), sales presence and nurturing approach to staff will combine to create a team capable of fulfilling an ambitious plan to operate a network of AlphaGraphics businesses throughout Yorkshire. Stephen Dudley Since graduating with BA Honours in Business Studies Stephen has focused on marketing, sales and customer service roles in the printing industry. He began his print education with Pindar, working there in customer service, taking on project management roles for many large catalogue retailers. He then took the opportunity to transfer within the company to perform a similar role in the Retail Financial Services market, working in London for the first time. Building on his continued success Stephen was selected to join the sales team and worked in this capacity for six years, moving companies in the process to gain a wider experience. His achievements were noticed and eventually resulted in Stephen being appointed to the role of Sales Director at Anton Group Ltd. More recently Stephen has operated in the print management arena with Astron Group in a more strategic role, coordinating major projects. Stephen will be an asset to AlphaGraphics Leeds and will assume direct sales responsibilities as well as operate as the marketing liaison with AlphaGraphics UK. Andrew Macdonald Andrew completed his Business Studies degree at Northumberland University and moved south to work with London Underground in an internal recruitment role. From this early base he moved on to Account Management at Scott Edgar, a recruitment consultancy. Managing a client base of around 2m brought with it many sales responsibilities, as well as the opportunity to excel in all aspects of customer service. From there Andrew moved on to work in the financial services and IT sectors, operating in a sales role where appointments, telephone calls, meetings are all measured and assessed, providing a good grounding in best practice. It was from this base that he decided to move North to Leeds in 2003, joining Michael Page to expand their Legal recruitment team, continuing in a sales role. The recruitment business is very competitive, requiring multiple contacts to be established within many accounts, whether prospects or customers. There is little real loyalty with service responsiveness through regular contact being one of the factors to differentiate your company and bring success. Andrew has succeeded in this environment and his tenacity and commitment will readily transfer to our industry, enabling him to repeat the sales success he has achieved in recent years. Kim OSullivan In recent years Kim has rekindled her formal education, deciding to embark on GCSEs, A levels and a degree in geography whilst also raising three children in the process. In the years before children Kim held a management position in the IT sector and although the equipment may have moved on (its faster and smaller) the principles of business have not. Kim is currently undergoing the four-week New Franchisee Training (NFT) course in Salt Lake City with AlphaGraphics Inc. On her return Kim will assist with the selection and recruitment of the Designer and Printer, as she will work alongside them in the role of Key Operator. As the volume of work grows we intend to recruit a replacement to allow Kim to take on the role of Production Scheduler full time. Kim has operated in this capacity before although not in the quick print industry. The extensive training will greatly improve her knowledge and understanding. New Franchisee Training Stephen is scheduled to attend NFT in January and Paul and Andrew will attend in February, ensuring the core team are well prepared to begin the development of the business. Other staff We will initially recruit the Printer and Bindery Assistant from HH and advertise for a part-time Book Keeper in December. We plan to advertise for a Designer as we want a higher calibre individual than the one currently at HH. Further headcount assumptions are shown in the table below. In all cases we will ensure cost follows sales growth to ensure our cash breakeven position is reached as quickly as possible. Role Yr 1 Yr 2 Yr 3 Yr 4 Sales 3 3.5 4 5 Printer 1 1 1.5 1.5 Designer 1 1 1 2 Key Operator/Digital 1 1 1 1 Production Scheduler 0.5 1 1 1 Bindery assistant 1 1 1.5 1.5 Bindery/Driver (50:50) 1 Book keeper 0.5 0.5 0.5 0.5 Total 8.0 9.0 10.5 13.5 The revenue per production employee across the AlphaGraphics network equates to 125,000 for a trained and experienced team. Our projected staffing assumptions allow for the minimum of headcount in the first year, growing as the sales revenue increases. Products and Services AlphaGraphics is a full service printer with some clear USPs, most notably their e-commerce and on-line ordering systems and ISO 9002 certification of their operating systems. According to the PIRA report referenced earlier, only 9% of corporations utilise e-commerce for print purchasing, with 46% considering changing methods and mechanisms for print purchases to take advantage of it in future. Print expenditure can be split into operational and marketing categories. The demand for operational print, such as letterheads, business cards, stationery, forms and so on, is expected to continue at the same rate. However procurement departments have recognised that the cost of ownership is unacceptably high, i.e., the transactional cost for each order is often greater than the product order value itself. Utilising sound e-procurement technologies will allow multiple orders to be placed on-line and as needed, greatly reducing processing costs for the customer. Marketing promotional print is increasing and the same economies of procurement can be expected here. In addition, there is the opportunity to provide digital asset management services to add greater value to the customer, locking them in to our business through superior service and quality. Products The products comprise business cards, letterhead, envelopes, newsletters, presentations, proposals, manuals, colour and black white copies, custom binders, folders and tabs, brochures, flyers, catalogues, business forms, posters, postcards and customer calendars. Network average mix of sales The early mix of sales will be difficult to predict and it may be slightly different to the network average due to the lower volume we will experience at the outset. For example, the projections for electronic print are lower than the average in year one as these sales can take time to build. Key to our success will be ensuring the products suit our equipment profile and that any sublet work is market focused, possibly providing a future investment opportunity if the volume and frequency is sufficient. The demand for large format plan copying, for example, may be substantial given the extent of building projects in progress in Leeds city centre. However careful analysis of sublet work will provide the right answer over time. Competition To put this into perspective, franchises account for around 17% of the Quick-Print market in the UK and the independent operators make up the remaining majority. There are a few franchisees operating in Leeds, such as Kall Kwik, Prontaprint and Hobbs. There are also numerous independent operators in the area, proving that the market opportunity is quite large. As part of the consideration process we spent some time reviewing alternative offerings, notably the Kall Kwik franchise. From this we established for ourselves that AlphaGraphics has a clear competitive advantage with the extensive product range and service levels it offers. The strength of the Kall Kwik brand is well known but the average revenue per business was quite low in comparison with AlphaGraphics, and therefore perceived as limiting our ability to provide a true full range of services from within one business. Brand Units in UK Value Average revenue AlphaGraphics 15 12m 795k Kall Kwik 166 66.4m 400k Minuteman Press 42 10.5m 250k PDC Copyprint 27 5.5m 200k Printing.com 50 16m 300k Prontaprint 190 55m 290k Kall Kwik, like many of the other franchise brands, has saturated their territory allocations, leading them to offer re-sales rather than start-up options. No such options were available in Leeds. AlphaGraphics SWOT analysis Strengths Global Network Pindar support Skills of employees AG Inc support Entrepreneur franchisees 25% network 1m sales Weaknesses Limited UK awareness Geographic coverage Poor tender support No long-term exit strategies for franchisees Opportunities Small nimble network Growth in digital Print on demand Growth in promotional lit. National contracts Complacent Comm Ptrs Threats Commercial Printers taking on low run lengths Comm Ptrs investing in digital Equipment manufacturers Obsolescence The awareness level in Leeds is not a problem due to the longevity of the brand in the market. The industry and product knowledge within the management will offset the current lack of tender support from the franchisor. Quality operating systems The AlphaGraphics network is the only franchisor whose franchise support systems are ISO 9002 certified. As a new business we will be able to apply for ISO 9002 registration after we have been trading for six months. During this time we will be operating the systems in support of our application, providing us with a clear differentiator over our competitors. Authorised equipment and assets The AlphaGraphics franchise operates to a strict set of network system standards that specify the minimum requirements for each print operation. This is designed to ensure that the global network is consistently able to satisfy the same business needs. The business franchise guidelines state that no additional equipment should be purchased, leased or rented without prior approval from the franchisor. This is designed to ensure that every franchisee completes an annual profit plan as part of their business development activity. Equipment by profit centre To properly provide design services all stores must be equipped to design and output spot and multi-colour artwork as a key part of being a full-service provider. A full-service design station comprises one Macintosh workstation and one Windows PC workstation, each with appropriate software (which is also listed in detail in the system standards). Electronic printing comprises two full service high-speed black and white digital printers and one self-service copy machine that could easily be operated by a customer with little or no assistance. The plan assumes one machine is installed immediately and the second machine is delivered five months later. Projected volumes for future years suggest that there will be a need for a higher volume machine in year three. Because of this we have assumed the first machine is on a five-year deal and the second is on three-year terms. A minimum of one digital colour copier capable of processing high quality digital files must also be in place. The volume of work within the plan assumes a second machine will be required at the end of year two and the additional cost has been built into year three. The pre-press equipment is needed to produce printing plates for the offset litho press and digital originals for the electronic printers. Printing plates can be metal or polyester and AlphaGraphics must approve the brand and model of this key item. This hi-tech equipment is bought new. The sheet-fed printing press must be capable of printing SRA3 size in two colours. This means that the press is also capable of printing short-run four-colour work by processing the job twice through the press. This equipment is sourced via an approved dealer and is fully refurbished and comes with a 12-month warranty for all parts and materials. A wide array of binding equipment is necessary to provide cutting, drilling, folding, stapling, padding, binding and shrink wrap services The management information system is based around PrintSmith, a strong multi-user system used for easy price maintenance, on-line accounts receivable, production scheduling and report writing. Other essential equipment includes a plain paper fax machine, a telephone system with at least five lines, an Ethernet network and fire safety equipment per local building regulations and standards. Financial needs A summary of the profit loss account for each of the first four years is shown below. Further details regarding the asset list and detailed cash flow forecasts are also contained in this section of the plan. Business Design Print Ltd (registration number 4920535) was created in October 2003 and is registered for VAT. Security The principals own their own properties but as they are jointly owned with respective spouses they are unable to offer these as security. The principals are however investing 100,000 and are seeking to raise an additional 100,000 through the Small Firms Loan Guarantee Scheme and a business overdraft facility to support the growth plans. Funding assumptions The plan has been prepared based on the following hypothesis: Cash investment by principals 100,000 Asset loans by principals 10,000 Bank loan using SFLGS 100,000 Overdraft facility 20,000 Lease purchase on key assets 52,650 Franchise fees The franchisor charges royalties on all invoiced sales at a reducing rate as sales revenues grow. Initial fees are 10% reducing to 5% as shown: Royalty threshold Royalty rate Sales up to 417,055 10% Sales over 417,056 and up to 893,690 7% Sales over 893,691 5% In addition to this the franchisor operates a rebate scheme to fund and encourage marketing and training, two key drivers for sales growth and productivity leading to increased profitability. The way the USC scheme works is that each month the business earns a 25% rebate of all royalties paid on time and these are converted into Universal Service Credits (USCs). Conversion is based on 1 USC = 1. All marketing expenditure can be offset against the accrued USCs and reclaimed from AlphaGraphics after it is spent. Training for staff is provided at cost effective rates in exchange for USCs and is targeted at the prime areas of the business, e.g., Print Certification, Design Certification and Sales Certification. Cost of materials These vary by cost centre but the prime assumptions are set out below: Design Services 2% Printing 5% consumables plus 20% paper Electronic Printing 1% plus paper @ 3.30 per 1000 sheets Colour 4% for paper (other costs in click charges) Binding 10% Sublet 65% Employee costs The principals have assumed that they will each draw on the Directors Loan facility during the first year. A table detailing the assumptions included in the plan for future years is included on the next page in this document. The ability of the business to support the costs of the Directors is apparent after the start-up years are worked through. Although the loan account will be drawn upon at the outset the commitment of the principals to this venture extends beyond this first store. They have an area development licence opportunity with AlphaGraphics UK that will allow them to expand their presence across Yorkshire. Equipment package Tangible assets to purchase include: Est. Cost Design Services hardware 4259 Design Services software 2789 Electronic printing, black white and colour Rented Pre-Press plate maker 21000 Ancillary press room sundries 556 Printing Press (ex HH) 15000 Binding equipment 13633 Admin hardware 2974 Admin software 2750 Admin MIS 4000 Shop fit 7755 Telecommunications 4324 Safety, Alarm, Furniture 2882 81922 Intangible assets include: Legal fees 3000 Property agent 3000 Franchise fee 18000 Territory fee 6000 Total costs 111922 The lease costs for two vehicles plus all associated operating costs have also been built into the business plan. Other costs include pre-opening expenses and initial training costs. Other start up cost assumptions includes training and accommodation costs for New Franchise Training (for 4 people) and other pre-opening expenses, totalling 20.5k. These are all depreciated over the first twelve months. Property An initial rent-free period of six months has been allowed for in the budget although this remains subject to further negotiation. We are in the process of submitting a proposal to the agent handling our selected property in York Place, a location close to the business district that is ideally suited to the profile of an AlphaGraphics. Assumptions The bank loan has an interest rate of 8% and no capital payments in year one. It is over a ten year term. Tax advice regarding the optimum method of remuneration has been sought and has influenced the make up of the plan. The following assumptions have been built into the plan. Yr 1 Yr 2 Yr 3 Yr 4 Paul OSullivan Annual Salary 4,800 4,800 30,000 30,000 Draw against loan 16,000 18,000 18,000 Stephen Dudley Annual Salary 4,800 30,000 30,000 30,000 Draw against loan 16,000 Andrew Macdonald Annual Salary 4,800 21,000 30,000 30,000 Draw against loan 16,000 Kim OSullivan Annual Salary 17,100 18,000 18,000 18,000 Monthly analysis The monthly detail supporting the plan for the profit and loss account, cash flows and balance sheet movements are all shown on the following pages. Monthly reporting All franchisees have to provide AlphaGraphics UK with a financial reporting pack each month to allow them to produce detailed monthly accounts in the same format as the budget pack. The management accounts provide analysis about each department in the business and a sample pack can be provided for review. For the initial six months we will review the accounts on a monthly basis with AlphaGraphics UK staff. Beyond this date the review meetings are held on a quarterly basis. The principals of the business intend to continue holding monthly meetings to ensure all aspects of the business are functioning to plan or better. Page 2 of 24 AlphaGraphics Leeds UK001 Year one Profit Loss account Cash flow forecast Balance Sheet Year two Profit Loss account Cash flow forecast Balance Sheet Page 2 of 24 AlphaGraphics Leeds UK001 Services Design Attract With Style Whatever your message, well create the right design to catch your audiences eye. From logos and simple business cards to complex newsletter layouts, our in-house designers have the talent to make you look good. And theyre skilled in todays most sophisticated layout, scanning, illustration and image-editing software. Its everything you need for looking your best. Copy Well Do the Copies. Youll Get the Credit. Whether the audience is your customer or your boss, quality copies can really make a difference. Large jobs or small, BW or colour, AlphaGraphics can do it faster and better, while making it easier on you. Plus our specialists can help you select the right paper, finishing and binding. So your project will look professional, and the boss will be happy. Offset printing Intimidate The Competition Put the right printer on your side and the results can be pretty powerful. Whether its short or long-run, AlphaGraphics has the printing know-how and technology to do it right. All without straining your budget. We can help you choose the right colour, paper, binding and finishing. In the end, your printing will make quite an impression on your audience. And on the other team. Colour Brighten Up Any Project Rich, quality colour can do wonders for you and your company. In addition to digital colour printing and copying, we can maximize your offset printing investment through the creative use of spot or process colours. Youll get the look of full-colour printing without the cost. So when you deliver your amazing colourful project at an affordable price, you may be rewarded with that corner office youve dreamt of. Hey, it could happen. In-Time Printing Dont be left with the expense of holding outdated materials. Now you can print and distribute only the quantity you need, when you need it. We can help you print to any AlphaGraphics location, across town or around the world, right from your desktop. Then let us archive all your digital files for you, so you can quickly update and reorder with just a few clicks of the mouse. Youll waste a lot less, and save big on time, money and shipping. Not to mention shelf space Print Communications At Your Fingertips Do it all right from your computer. Anytime, anywhere. Order, print and manage important communications from your own Web site. Whether you need printing across town or around the world, its all about reducing inventory, localizing your market message, and saving time. And who couldnt use more of that. Our online tools make managing your printing easy and painless. AlphaGraphics goes a step beyond other printers by providing everything here that you need to get your project done right. Whether you are a graphic designer, expert in the technical terms of printing or whether you arent an expert but need a brochure printed, we have easy to use tools for you. What was once a technical and intimidating process with which only a print professional might be involved is now something everyone can do. Each AlphaGraphics Online tool is specialized for a different use. Online Ordering One of the most useful tools, online ordering allows users to do several things, including: * Secure Online Ordering * Localization/Customization * Easy Payment * Consistent Production * Distribution Control * Useful Reporting Features Get a Quote Use this feature allows you to specify quantities, colours and other requirements to get a price quote for your job. If you are unsure of some of the aspects of your job, such as paper or finishing requirements, we can advise you as to the best production methods for the job. This tool puts you in touch with an AlphaGraphics expert who will call you to follow up on your printing requirements if you are unsure Send a File This tool allows you to send jobs or components of jobs to the store in the traditional manner. If using this method to send an entire project, you will need to be sure to include all fonts and images used on the piece. Please zip or stuff files prior to sending. Send a File also allows you to send one thing at a time, such as a company logo or a stuffed photograph. AG PDF Express This tool allows you to seamlessly print from any application on your computer to an AlphaGraphics store. Regardless of whether you are using Microsoft Word, Word Perfect, Adobe InDesign, or Corel Draw, using AG PDF Express, you can print to your AlphaGraphics store just as easily as you would to the printer on your desk. An easy installation process of this Adobe software is all that is required to get you started. There is no need to assemble fonts and graphics or worry that you have left something out. This is the easiest way to send jobs online. Please download an easy install copy from the AlphaGraphics store Web site of your choice. Click on Find a Store at the right to select an AlphaGraphics location near you. Use One to One Marketing to speak Directly To Your Audience Looking for better results? AlphaGraphics can print personalized and relevant materials for your target audience. It all starts with a list of names. Our sophisticated software and equipment then print those names on individual pieces. Plus we can fold, stuff and mail your project. All to help you reach the right audience with the right message, and get the response youre looking for. Consider AlphaGraphics when. You need a partner with experience and proven results in creating and implementing targeted direct marketing programs You need a national/global program that can be localized at branch offices to support local markets You need all services provided from one vendor, including design, printing and fulfilment You need the assurance of distributed locations that can speed delivery, reduce cost and deliver in a timely manner Online Ordering Streamline online ordering of your frequently printed documents, including letterhead, business cards, forms, training and sales materials from all your locations. Easy to use interface allows you to enter name and address information, as well as order and proof online, from any location, at any time from your own catalog. Lower production, distribution and warehousing costs through our digitally connected, full service print network. Easy online management of everything from customizing business card orders to producing and distributing your training materials. Expect consistent quality. Our ISO 9002 certification ensures your job will be done right and delivered on time. Products Have a Specific Format in Mind? Weve Got It Covered. From large-volume duplicating, to high-speed digital colour copying, to quality offset printing, our team of Certified Print Specialists can produce just about anything. Business Cards, Letterhead, Envelopes Newsletters Presentations Proposals Manuals Colour and BW copies Custom Binders, Folders, Tabs Brochures, Flyers Catalogs Business Forms Posters Postcards Custom Calendars Invitations Labels Business Cards, Letterhead, and Envelopes Does your company stand out in a crowd? Your companys personality has to shine through your logo, business cards and letterhead. AlphaGraphics has the technology and the expertise to build a corporate identity for your company as unique as your company itself. * Well use our full-service approach to make your identity and its elements work across a variety of media. * Next, well print your new or existing logo on everything from business cards, letterhead, and envelopes to labels, brochures and presentation covers. * Finally, well work your new colour scheme and design into your Web site and update your multimedia presentation. How to Build a Brand For Your Company Letterhead Make sure your letterhead includes all appropriate company information: names, addresses, phone, fax, e-mail and Web address. Business Cards Depend on business cards not only to keep in touch with clients, vendors and business associates, but also as a form of advertising. Dont run out! Corporate Brochures When you cant represent your company in person, rely on an impressive capabilities or product brochure. Corporate Logo Your logo has to say a lot about your companys personality at a glance. It needs to work well in black and white and colour, in a variety of sizes and on all types of company materials. And, your logo must stand the test of time as your company grows. Newsletters Do you have a story to tell? Do you have a new product to launch? AlphaGraphics team of Certified Print Specialists will help you turn your next newsletter into a powerful and effective business communication tool. * Well listen to your unique needs, understand your target audience, learn your overall objectives, and assess whether your newsletter is an internal or external communications piece. * Next, well develop a look that attracts your audiences attention and keeps them reading by suggesting eye-catching graphics and the most effective use of color and paper. * Then, well introduce you to new technologies that will enable you to customize your newsletter to target your different audiences. * Finally, well help you get more out of your newsletter by adapting it for other uses, such as online. Presentations Planning to introduce a new product line? Trying to attract new customers, new employees or new investors? AlphaGraphics offers the latest desktop equipment and software to design and produce effective presentation materials that inform, educate and persuade your audience. * Well help you make every presentation clear, persuasive and professional. * Next, well help develop PowerPoint presentations, slides and overhead transparencies that bring your selling points to life. * Then, well create custom-bound participant guides that provide your audience with the information they need right at their fingertips. * Finally, well help produce your leave-behinds in print or on CD-ROM that your audience can review after the presentation. Manuals Manuals play a critical role in making an organization run smoothly. They make it easy to give customers instructions on new products or to update staff on new procedures. AlphaGraphics brings the technology and expertise necessary to produce effective and easy-to-use manuals. * Well take the time to learn the unique needs of your manual. * Well help you communicate with your audience in the most effective way by designing your manuals in an easy-to-follow format. * Next, well help you illustrate important information with graphics and charts. * Then, well help make it easy to locate sections of your manual with custom, coloured tabs. * Finally, well manage the whole process for you by printing your manual and storing it online so you can easily reprint it from any where at any time. Brochures, Flyers You and your team put a great deal of effort into building brand awareness and making a sale for your company. Companies that operate on a national/global scale have the additional challenge of producing brochures, flyers and other collateral to distributed locations. Many of these organizations struggle with managing multiple suppliers, obsolete inventory due to product changes, inconsistent pricing and quality. Were a Full Service Printer AlphaGraphics brings you a full-service approach to creating marketing and sales materials, from design to print and fulfilment. We also provide strategic sourcing approach that will enable you to consolidate national or global requirements into a unified approach to managing all of your business to business sales and marketing support needs. * Well make sure your brochures, flyers and sell sheets can complement each other and reflect the look you need and the message you want to convey. * Next, well transform your words and ideas into effective marketing and sales pieces that get results. * Then, well recommend more ways than ever before to showcase your companys products and services to help you close the sale. * Well assist you in determining how to implement online access, control and storage of all of your brand-building and sales support information. * Well build your online systems from our proven platform and train your employees in how to easily order what they need to support their sales efforts. Well help you monitor your production needs to reduce your inventory levels and improve quality. Page 2 of 24 AlphaGraphics Leeds UK001 [1] Printing Industry Research Association: Trends in corporate Print Buying, 2003