MC Kimmorley & Felias

Chartered Accountants

Business Expansion Plan

Suite 201, 20 Dale St.,

Brookevale NSW 2100 Australia

Prepared By: Arnold Felias

Table of Contents

1. Service Expansion Overview..............................................2

2. Current Services.................................................................3
3. New Services......................................................................4
4. Market Analysis..................................................................5
5. Marketing Strategy............................................................8
6. Business Structure and Management................................3
7. Finances and Financial Projections...................................3
8. Action Plan.........................................................................4

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1. SERVICE EXPANSION OVERVIEW
Business Background
MC Kimmorley & Felias (MCKF) is a small-sized firm of chartered
accountants based in the Northern Beaches suburb of Brookvale. The
company offers accounting, taxation, superannuation, financial business
advisory and support services to a wide range of small businesses and
individuals.
MCKF provides a cost-effective, high value solution to meet all its clients’
financial needs in today’s rapidly changing business environment. This is
achievedis achieved by working in partnership with its clients in order to
deliver timely, individual advice on how to improve business and personal
wealth.
Integrated Offering (Accounting Services + Management Consulting)
Being financial advisers, MCKF is privy to their clients business and
competitive challenges of their clientsthat they face. Majority of the
challenges revolve around process inefficiencies and out-dated systems
resulting in average and less than competitive products and services.
Given the need of its clients for help in solving their business problems,
MCKF was inspired to develop an integrated service offering by combining
traditional Accounting Services with an enhanced service of Management
Consulting to cover Business Process Evaluation, Project
Management and Information/Automation Systems Analysis.
Management Consulting is an independent professional advisory service
assisting organizations to achieve organizational purposes and objectives
by solving management and business problems, identifying and seizing
new opportunities, enhancing learning, and implementing changes.
MCKF shall leverage on the integrated service offering to expand its
footprint in the small business segment whichsegment, which have
approximately 650,000 businesses in New South Wales.
Capability Creation and Marketing Direction
MCKF shall create the consulting capability by hiring 1 experienced
Management Consultant with specialization in process and systems
improvements preferably with Lean Six Sigma expertise.

2. CURRENT SERVICES
I. Accounting, Superannuation and Taxation Services (Current)

 Liaising with clients and providing financial information and advice;

 Reviewing the company's systems and analysing risk;
 performing tests to check financial information and systems;

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  Advising clients on tax planning and tax issues associated with
activities such as business acquisitions and mergers;
 Maintaining accounting records and preparing accounts and
management information;
 Advising clients on business transactions, such as mergers and
acquisitions;
 Advising clients on areas of business improvement, or dealing with
insolvency;
 Preparing financial statements, including monthly and annual accounts;
 Preparing financial management reports, including financial planning
and forecasting;
 Advising on tax and treasury issues;

II. Financial Audits (Current)

 Plans financial audits by understanding organization objectives,

structure, policies, processes, internal controls, and external
regulations; identifying risk areas; preparing audit scope and objectives;
preparing audit programs;
 Assesses compliance with financial regulations and controls by
executing audit program steps; testing general ledger, account
balances, balance sheets, income statements, and related financial
statements; examining and analyzinganalysing records, reports,
operating practices, and documentation;
 Assesses risks and internal controls by identifying areas of non-
compliance; evaluating manual and automated financial processes;
identifying process weaknesses and inefficiencies and operational
issue;
 Verifies assets and liabilities by comparing and analyzinganalysing
items and collateral to documentation;
 Completes audit work papers and memoranda by documenting audit
tests and findings;
 Communicates audit progress and findings by providing information in
status meetings; highlighting unresolved issues; reviewing working
papers; preparing final audit reports.
 Improves protection by recommending changes in management
monitoring, assessment, and motivational practices, in the internal
control structure, and in operating processes; identifying root causes;
 Supports external auditors by coordinating information requirements;

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3. NEW SERVICES

I. Business Process Analysis and Information System Analysis

 Helping businesses identify process and automation opportunities and

problem areas with the objective of creating realistic and sustainable
recommendations for action.
 Work closely with clients and the business to identify and analyse core
business processes and workflows using the Six Sigma methodology;
 Facilitating Six Sigma workshops with SME's and users;
 Documentation of process and work flows;
 Development of clear and detailed process maps and business
requirements;
 Identifying issues and risks;
 Analysis of current Information Technology systems and applications;
 Formulating improvement recommendations and actions;

II. Project Management / Change Management

Helping businesses implement solutions in a cost-effective way by

determining the requirements of a project or program, and
communicating them clearly to all stakeholders, facilitators and
partners.

 Assisting with the business case;

 Planning and monitoring;
 Eliciting requirements;
 Requirements organization;
 Translating and simplifying requirements;
 Requirements management and communication;
 Requirements analysis;

4. Market Analysis for New Services

I. Target Customer

MCKF will focus on small businesses whichbusinesses, which

make up majority of Australian business and account for
almost half of employment in Australia. Approximately
650,000 small businesses are located in New South Wales
representing 33% of small businesses in Australia1.

1
Australian small business KEY STATISTICS, 2011

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 Target companies in NSW would have been in operations for
more than 1-2 years and would feel the need to drastically
improve their operational efficiency through reduce costs,
improved customer services, enhanced quality of current
product lines and services, and a more rapid introduction
new products and services to improve their competiveness.

In the first year, nearly one-third of all small business

start- ups failed on the average. The proportion of failure
rates then declined for each subsequent year but the
cumulative failure rates are high – 62% after 3 years and
74% after five years.

The major causes of small business failure are:are a lack of

management skills; insufficient finance; and often a failure
to take advantage of assistance programs.2

Table 1

II. Market – Management Consulting Industry

Management Consulting is aan $8 billion industry in Australia

and it is expected to have an annual growth rate of 2.7% from
2014 to 2019. The business consulting industry is driven by
large multinational companies like Accenture, Deloitte, KPMG,
PwC, etc. which offer their packaged services to companies of
different sizes and industries. The industry is centred on the
major commercial cities of Melbourne and Sydney, mainly
due to the greater access to clients in those areas. The need
for face-to-face communication to develop client
relationships, and the heavy concentration of large
businesses headquartered in those cities, makes them
natural destinations for consulting firms. As such, New South
Wales has 37.7% of industry establishments, above its
33.7% share of Australia's population. Likewise, Victoria has
28.2% of establishments for 25.0% of the national
population3.

Table 2 : Summary of Global Consultancy Firms in Sydney

2
http://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/key/
SmallBusinessinNSW:Statisticalsnapshotandrecentdevelopments
3
http://www.ibisworld.com.au/

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 Categorized by Service Type with Customer Type Served 4
(sourceSource : In-house research)
Sum Sum Sum of
Sum of
Row Labels of of Specialty
Medium
Large Small Consulting
Analytics 5 1 0 5
CRM 1 0 0 1
Engineering 2 0 0 2
Environment 1 0 0 1
Finance 8 0 0 8
Healthcare 2 0 0 2
HR 4 1 0 4
IT 13 2 0 13
Marketing 4 1 0 4
Mining 1 0 0 1
Multi 33 2 0 0
Outsourcing 1 0 0 1
Recruitment 4 3 0 4
Grand Total 79 10 0 46
Note : Small Businesses = 1-19 employees
Medium Businesses = 20-200 employees
Large Businesses = 200+ employees
Specialty Consulting  focused on one functional area

Approximately 41% of global consultancy firms have multiple

services offered with the rest being specialized in their
services offered. For specialized consulting firms, Finance, IT,
Analytics and HR would comprise 65% of the services offered
with IT having the largest share.

Numerous smaller firms and individual business consultants

prosper in the market niches that bigger players consider
unprofitable to enter. Most of the large consulting firms carry
too much corporate overhead whichoverhead, which makes
them very expensive for most small businesses. This can be
seen in table 2 where none of the big players service small
businesses.

III. Competitors – Small Business Segment

Smaller firms and individual business consultants typically

offer many of the services that MCKF offer to the same small
business market segment. Players in this market niche tend
to be fragmented and rely primarily on personal networking
and social media marketing.

IV. SWOT Analysis

4
http://www.consultingcase101.com/forum/Thread-List-of-consulting-firms-in-Sydney-Australia?
pid=40099#pid40099

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 Positive Negative
Internal Strengths Weaknesses
Existing base of Accounting Clients Limited consultancy experience beyond Accounting
Accounting Consultancy Experience Limited Six Sigma experience
Office and facilities already available Limited automation consultancy experience
Located in Sydney which have large number of
small businesses
Lower prices
Leadership 'hands on' approach
Personal networking available.
Working knowledge of Social Media Marketing
External Opportunities Threats
Underserved small business segment Large consulting to cover SMEs
Large consulting do no serve small business Low availability of high level Six Sigma Consultants
Techonology (ie. Internet, smartphones, etc) can with automation experience in the market
be used cost effectively now for small business
improvement
Government focus on small business success
Small business failure rate of 33% after 1 year
Small business failure rate of 64% after 3 years

SWOT analysis would shows substantial opportunities for MCKF

to offer an integrated Accounting and Management Consultancy
as a unique selling proposition to its current client and to
potential clients targeting on small businesses given the high
business failure rate within the segment. Furthermore, MCKF
strengths being located in NSW, Accounting consultancy
experience, existing network of clients, and knowledge of Social
Marketing all provide a good foundation for the expansion.

5. Marketing Strategy
MCKF will offer the integrated service offerings to its existing small
business clients.

MCKF will then offer the integrated services to the market segment of
small businesses through business contacts, referrals from existing
clients, local marketing, productand product launch plans with SMC
associations and Internet marketing efforts.

Segmentation

Customers for the integrated service is initially segmented based on

employee size (see Table 2) and then segmented based on location
where bulk of the companies are located in NSW. MCKF shall focus on
the underserved segment of small businesses within the high
densityhigh-density market of NSW.

Targeting

MCKF shall focus on the underserved segment of small businesses

within the high densityhigh-density market of NSW.

Positioning

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MCKF shall position to be a high quality, low cost, no frills Management
Consultancy provider for small businesses. We shall position to fix
business pain through analysis and proven methods and tools of Six
Sigma.

Tag line:

“Heal your Business….”

Feeling any pain in your business?
Call your Six Sigma Business Doctors now!

6. Business Structure and Management

<C/O ARNOLD>

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7. Current Finances

<Financial Reports 2012-2014>

Market Salary Rate

As seen from the current financials, MCKF has the ability to support the
wages to hire a business management consultant in order to expand
its current services.

As no Australian citizen or permanent resident currently exists in an

equivalent position in the same location, the market salary rate was
determined by sourcing government statistical data and reputable
industry remuneration surveys.

Source Occupation Salary Rate

(p/a)
Job Outlook (Aust Management and Organisation
Govt) Analysts - Management
Consultant 78,780
Payscale Australia Management Consultant 60,000
Business Process / Management
Consultant 79,000
Open Universities Business Analyst 60,000
(career summary)
Robert Walters – Business Analyst – CA/CPA 55,000 –
Recruitment 85,000
Specialist

This extensive research has provided the empirical data to determine

the salary offered. In addition, the nominee’s credentials were
addressed. The employer considered:
- Australian qualifications as a CA/CPA have not yet been obtained
- skills and experience: possesses transferrable skills in all aspects
of the position offered, however, application of these skills in
past work experience were in isolation. The nominee would
therefore be in a career entry position since the application of
his skills are required in the one role;
- potential growth, commitment to the role and capacity of the
business.

The employer therefore agrees to offer a reasonable base salary of

$XX,000 per annum (plus superannuation). The employer declares
that this salary would also be offered to an Australian citizen or
permanent resident if one had qualified.

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8. New Service Profit and Loss Projections

Investment of $30,000 shall cover the negative profit and loss

position of the new service consultancy unit during the first 4
months.

Revenues will come from hourly billing for services assumed to be

$200 per hour. Business Consultant utilization will start at 25% in
the 1 st to 3 rd month of operations and will continue to increase to

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75% in the 9the to 12 th month of operations. Maximum utilization is
assumed to be at 75% with 25% spent on non-billable admin
hours.

The new service will start to have a positive P&L on the 5 th month
and will end the first 12 months with a net income of $99,700.

Table 5 : Consultant Salary and Billing Rates

Billing X 4
Consultant Payroll Cost and Billing Price Cost
of Cost
Yearly $ 100,000
Monthly $ 8,333
Daily $ 397
Hourly $ 50 $ 200.00

Table 6 : Profit and Loss Summary

Month Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
Income
Total Sales 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Less Total Disc/Comm 0 0 0 0 0 0 0 0 0 0 0 0

Total Net Income 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Less Total Cost of Gooods Sold 0 0 0 0 0 0 0 0 0 0 0 0

Gross Profit 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Expenses
General & Administrative 100 100 100 100 100 100 100 100 100 100 100 100
Marketing & Promotional 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Operating Expenses 200 200 200 300 300 300 400 400 400 400 400 400
Motor Vehicle Expenses 400 400 400 400 400 400 400 400 400 400 400 400
Website Expenses 0 0 0 0 0 0 0 0 0 0 0 0
Total Employment Expenses 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333
Occupancy Costs 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Other Expenses 0 0 0 0 0 0 0 0 0 0 0 0

Total Expenses 11,733 11,333 11,333 11,433 11,433 11,433 11,533 11,533 11,533 11,533 11,533 11,533

Monthly Net Profit / (Loss) -2,933 -2,533 -2,533 6,167 6,167 6,167 14,867 14,867 14,867 14,867 14,867 14,867
Total Year to Date Net
Profit / (Loss) -2,933 -5,467 -8,000 -1,833 4,333 10,500 25,367 40,233 55,100 69,967 84,833 99,700

Table 7 : Detailed Profit and Loss

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Assumptions
Billing X 4
Consultant Payroll Cost and Billing Price Cost
of Cost
Yearly $ 100,000
Monthly $ 8,333
Daily $ 397
Hourly $ 50 $ 200.00

Month Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
Projected Billed Hours (1 Consultant) out of 176 hours 44 44 44 88 88 88 132 132 132 132 132 132
Projected Consulting Contracts - Consultant Utilization % 0.25 0.25 0.25 0.5 0.5 0.5 0.75 0.75 0.75 0.75 0.75 0.75

Month Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
Income
Sales
Consulting 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Total Sales 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Gross Profit 8,800 8,800 8,800 17,600 17,600 17,600 26,400 26,400 26,400 26,400 26,400 26,400

Expenses
General & Administrative
Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100
Total General & Administrative 100 100 100 100 100 100 100 100 100 100 100 100

Marketing & Promotional

Internet Marketing 500 500 500 500 500 500 500 500 500 500 500 500
Client Presentations 500 500 500 500 500 500 500 500 500 500 500 500
Promotion - Other 200 200 200 200 200 200 200 200 200 200 200 200
Etc.
Total Marketing & Promotional 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200

Operating Expenses
Newspapers & magazines
Parking/Taxis/Tolls 50 50 50 100 100 100 150 150 150 150 150 150
Entertainment/Meals 50 50 50 100 100 100 150 150 150 150 150 150
Cleaning & cleaning products 100 100 100 100 100 100 100 100 100 100 100 100
Total Operating Expenses 200 200 200 300 300 300 400 400 400 400 400 400

Motor Vehicle Expenses

Fuel 400 400 400 400 400 400 400 400 400 400 400 400
Total Motor Vehicle Expenses 400 400 400 400 400 400 400 400 400 400 400 400

Employment Expenses
Permanent
Salaries/Wages/Superannuation 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333
Other - Employee Benefits 0 0 0 0 0 0 0 0 0 0 0 0
Recruitment costs
Total Perm. Employment Expenses 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333

Total Employment Expenses 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333

Occupancy Costs
Electricity/Gas 100 100 100 100 100 100 100 100 100 100 100 100
Telephones 100 100 100 100 100 100 100 100 100 100 100 100
Rent 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300
Total Occupancy Costs 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500

Total Expenses 11,733 11,333 11,333 11,433 11,433 11,433 11,533 11,533 11,533 11,533 11,533 11,533

Month Net Profit / (Loss) -2,933 -2,533 -2,533 6,167 6,167 6,167 14,867 14,867 14,867 14,867 14,867 14,867

Total Year to Date Net Profit / (Loss) -2,933 -5,467 -8,000 -1,833 4,333 10,500 25,367 40,233 55,100 69,967 84,833 99,700

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8. Action Plan
Key Objectives Task By Whom By When
Hire permanent Consultant Arnold 1-Oct-14
Advertise in Seek/Job Sites to
generate pool of Fixed Term Conille 15-Oct-14
Recruitment
Consultants
Ongoing Interviews Arnold / Conille Ongoing
Training and Orientation Arnold / Conille 5-Oct-14
Creation of Marketing and Sales
Kara 15-Oct-14
Collaterals. (ie Brochures)
Shorlist prospects from current
Arnold 1-Oct-14
Marketing / Sales Clients
Shorlist of prospects for outbound
Conille 10-Oct-14
sales calls.
Updating Website Jimbo 1-Oct-14
Facilities Prepare office for Consultants Conille 30-Sep-14
Consult with lawyer Arnold 1-Sep-14
Legal
Finalise contracts Arnold 15-Sep-14

Finance Financial Projections and Objectives Arnold 15-Jul-14

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