Free Factoring Company Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
purposes only. If you are interested in purchasing the completed editable MS Word
and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
It should be noted that there is no special software required to use these
templates. All business plans come in Microsoft Word and Microsoft Excel format.
Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $550,000 for the development of a factoring company while showcasing the expected financials and operations over the next three years. Factoring Company, Inc. (“the Company”) is a New York based corporation that will provide financing based on accounts receivables to companies within the target market. The Company was founded by John Doe.
1.1 Products and Services
The Factoring Company will make advances to businesses that carry extensive accounts receivables from businesses within the target market. On each invoice, the business will provide financing equal to 90% of the total amount of the invoice. The business will earn substantial fees for providing this financing to businesses that carry extensive accounts receivables. The Factoring Company, from time to time, will make divestitures of these investments as they become profitable and will produce tax friendly returns. Management is currently working with an attorney to determine the most appropriate structure of the factoring company. The third section of the business plan will further describe the services offered by the Factoring Company.
1.2 The Financing
Mr. Doe will make a $550,000 investment into the business. Primarily the financing will be used for the following: • Financing for the first six months of operation. • Financing for the investments to be made by the Factoring Company, Again, an attorney has been retained in order to make sure that the structure of the Factoring Company is appropriate.
1.3 Mission Statement
The Factoring Company’s mission is to provide ongoing returns for the aggregated portfolios of accounts receivables held by the business.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the finance industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns effectively target both investors that want higher than average returns on their investments as well as companies that carry an extensive amount of accounts receivables.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Factoring Company, Inc. The business is registered as a for profit company in the State of New York.
2.2 Required Funds
At this time, the Factoring Company requires $550,000 of investment funds funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
This will be discussed during negotiations.
2.4 Management Equity
This will be discussed during negotiations.
2.5 Exit Strategy
This will be discussed during negotiations.
3.0 Products and Services
Below is a description of the services offered by the Factoring Company Company.
3.1 Factoring Operations
As stated in the executive summary, the Factoring Company will focus heavily on acquiring discounted accounts receivable portfolios with the intent to generate substantial returns on investment as other businesses pay their invoices directly to the Factoring Company. On each investment, the business will generate annualized returns of nearly 100% as invoices will be held for approximately 30 days to 60 days depending on the credit quality of the individual business that has received an invoice from one of the Company’s corporate customers. The business will enact strong credit protocols to ensure that defaults on invoices are kept to an absolute minimum.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the financial intermediation and factoring industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is moderate. The meltdown of the sub prime mortgage market coupled with increasing gas prices has led many people to believe that the US is on the cusp of a double dip economic recession. However, the Factoring Company will be able to remain profitable and cash flow positive given the very high return on investment that comes from managing and servicing a portfolio of accounts receivables.
4.2 Industry Analysis
According to the US Economic Census, there are approximately 1,500 companies that are actively engaged in the purchase, collection, and sale of accounts receivables as it relates to Factoring Financing. Each year, these firms generate more than $32 billion of revenues while providing jobs for approximately 35,000 people. Annual payrolls in each of the last five years have exceeded $2 billion. This is a mature industry, and the future expected growth rate is expected to equal that of the general economy. Due to the continually changing nature of SEC regulations, Factoring Companies that accept third party investments from investors may need to alter their structures as many scandals lately have tightened regulations regarding aggregated funding pools that invest in accounts receivables portfolios.
4.3 Customer Profile
Management anticipates that the clients of Factoring Company, Inc. will be small to medium sized businesses within the Company’s targeted market. Below is a profile of individuals that are expected to become clients of Factoring Company: • Operates a business that is within 50 miles of the Company’s location. • Has $5,000 to $50,000 of receivables to divest with the business. • EBITDA in excess of $50,000+
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
The Factoring Company to develop a marketing campaign that will attract both investors and potential clients to the brand name of the firm. Below is an overview of these marketing strategies.
5.1 Marketing Objectives
• Establish relationships with referring business advisories within the targeted market.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the Factoring Company to easily target small and medium sized businesses within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public. The Company will also use an internet based strategy. This is very important as many people seeking local services, such as factoring companies and specialized financing companies, now the Internet to conduct their preliminary searches. Mr. Doe will register the practice with online portals so that potential customers can easily reach the business. The Company will also develop its own online website showcasing the Company’s financing capabilities, the Factoring Company’s location, hours of operation, and accepted accounts receivables that can be financed by the business. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the accounts receivables financing services that the Company is selling.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• The Factoring Company will have an annual revenue growth rate of 16% per year.
• The business will generate annual returns of approximately 10% compounded in unrealized gains.
• The Founder will invest $550,000 of equity funds.
7.2 Sensitivity Analysis
As the Factoring Company will have many investments in accounts receivables portfolios, economic risks will be spread out among a number of businesses. As such, any type of economic recession will not have an impact on the Company’s profitability or cash flow.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis