Free Online Auction Website 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!
- All plans are updated for 2013!
1.0 Executive Summary
The purpose of this business plan is to raise $150,000 for the development of an online auction website that will provide a platform for people to post advertisements for products that they would like to sell via auction. This business plan will also showcase the expected financials and operations over the next three years. The Online Auction Website, Inc. (“the Company”) is a New York based corporation that will sell advertising space while generating revenues through auction sales via its online platform (www.mysite.com) to users. The Company was founded by John Doe.
1.1 Products and Services
Online Auction Website, Inc. is developing an expansive Internet sales portal that will bring consumers and merchants together in one internet setting. The business will provide its merchant user clients with a platform from which they can advertise and sell products. The business will receive a 5% commission for each dollar of revenue generated by the business. The business will generate revenues from static and dynamic advertisements that generate revenues on a per 1000 impressions basis while concurrently earning other income from affiliate partner revenues. The third section of the business plan will further describe the services offered by the Online Auction Website.
1.2 The Financing
Mr. Doe is seeking to raise $150,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following: • Development of the Company’s online auction website platform. • Financing for the first six months of operation. • Capital to purchase servers, computers, and related technology Mr. Doe will contribute $25,000 to the venture.
1.3 Mission Statement
The Online Auction Website’s mission is to become the recognized leader in its targeted market as a platform where people can post products for sale online.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the online and Internet 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 that will effectively target individuals within the Company’s demographic.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Online Auction Website, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Online Auction Website requires $150,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Online Auction Website, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Online Auction Website. Based on historical numbers, the business could fetch a sales premium of up to 10 times earnings.
3.0 Products and Services
Below is a description of the benefits (to both users and advertisers) offered by the Online Auction Website.
3.1 Benefits of the Online Auction Website
Below is a brief summary of benefits offered to the end user of the Online Auction Website (www.mysite.com): The Online Auction website will provide its merchant users with a plethora of back office product marketing support so that the business can earn is commission from sales. The business will offer its merchant clients the ability to: • Be listed on the Online Auction Website online search engine, which will charge merchants on a per click basis. Each merchant will have the option to determine which categories they want to advertise. • Provide registered customers with weekly specials for products, which will add a significant amount of revenue to a merchant’s bottom line. • Users will be able to have a price-comparison tool that will find them the best deals for each product offered throughout the website. • Merchants can also take part in the Company’s virtual mall, which will allow users to directly purchase merchandise from the Online Auction website. • For users, a global directory of affiliated merchants will be provided in the Site Map.
3.2 Advertising Revenues
The revenues will come from the sale of advertising space to businesses. At the onset of operations the business will develop a relationship with Google AdSense so that the business can immediately generate revenue. Each time a visiting user clicks on one of the advertisements for the business, the Company receives a payment from Google. These ads will be tastefully placed throughout the Online Auction Website’s platform. The Company also intends to develop its own internal advertising programs that will feature static advertisements within the website. These advertisements will be sold directly to advertisers rather than through a third party system, like Google AdSense. In the future, the Online Auction Website will also seek to develop product affiliation and corporate sponsorship relationships which would further the Company’s visibility and revenue streams.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the online advertising and e-commerce 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 in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue for a significant period of time, at which point the economy will begin a prolonged recovery period.
4.2 Industry Analysis
According to PriceWaterhouseCoopers 2009 report on aggregate internet marketing budget statistics, it is anticipated that internet marketing expenditures in the US will reach $70 billion dollars per year by 2010. Currently, internet marketing is a $50 billion dollar per year industry. Approximately 80% of this revenue is from keyword search advertising with the rest of the revenue generated from rich media, banners, classifieds, sponsorships, referrals, and email advertisements. This industry is expected to continue to grow as the numbers of businesses increase. The growth rate of the industry over the last five years has been well over 40% per year with this trend expecting to continue and then level off over the next five years. Online retailers are expected to generate $115 billion dollars this year. The United States Economic Census indicates that over the next five years, 60% of the businesses in the United States will have an internet presence. In early 2010, industry reports estimate that 210 million people will have access to the internet with approximately 65% of these people having direct high speed internet access.
4.3 Customer Profile
The Online Auction Website’s average client will be a young middle to upper middle class male of female that has a broadband internet connection. Common traits among end users will include: • Annual household income exceeding $50,000 • Between the ages of 18 and 40 • Has high speed internet access • Is familiar with the concept and operations of online auction websites.
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 Online Auction Website intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Online Auction Website.
5.1 Marketing Objectives
• Develop promotional giveaways that will draw users to the website via viral marketing methods.
• Establish relationships with advertisers that are targeting a computer savvy younger demographic.
• Develop an expansive online presence through the use of pay per click marketing and search engine optimization.
5.2 Marketing Strategies
Mr. Doe intends to use a high impact marketing campaign that will generate a substantial amount of traffic to www.mysite.com. These strategies include the use of search engine optimization and pay per click marketing. The Company’s web development firm will place large amounts of linking text on the Company’s website. For instance, when a person does a Google search for online auction websites, the Company will appear on the first page of the search. This strategy is technically complicated, and the Online Auction Website will use a search engine optimization firm to develop the Company’s visibility on a non-paid basis. Management expects that a SEO firm will place large amounts of linking data and text specific keywords into the business’s website, which will allow the Company to appear more frequently among search engines. A majority of web portal and search engine companies use very complicated algorithms to determine a website’s relevance in relation to a specific keyword. SEO firms place text and tags on the website to increase the rank of a specific website. Additionally, the Online Auction Website will use several pay methods for increasing the Company’s visibility. This strategy is expensive, but the results can be phenomenal if this marketing strategy is properly executed. These advertisements appear along the border and side of a website, and each time a person clicks on the website, a small fee ranging from fifty cents to one dollar is charged to the Company’s account. This strategy will be used until the Company gains momentum.
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 Online Auction Website will have an annual revenue growth rate of 31% per year.
• The Owner will acquire $150,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
In the event of a severe economic decline, the demand for specialty online based advertising and auction may decrease significantly, which may cause the advertising/auction revenue generated by the business to level off or decline. However, the high margins associated with the Online Auction Website will ensure that the business will be able to remain profitable and cash flow positive at all times.
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