‘ABC Graphics Company’ is a home-based desktop publishing company, which started its journey to offer creative and innovative products; however, the initiator of this firm has higher proficiency in graphic designing. The estimated start-up capital is $70000, among this fund, principal’s equity is $10000, and borrowed capital is $60000; however, the key initial costs include for the purchasing equipment and fixtures, adverting and so on.
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Net income will be approximately $12176 (9%), $30664 (18%) and $43628 (22%) for the fiscal year 2015, 2016 and 2017 accordingly; this home-based DTP will reach break-even point within first three months from the starting business. Projected sales estimated at $138586, $173234 and $199218 for the next three years and total assets estimated at $66902, $94042 and $130474 for this period.
‘ABC Graphics Company’ is proposed desktop company publishing; the founder of this company has higher proficiency regarding the fundamentals of desktop publishing and aimed to establish a home-based business organization by in-house resources.
However, this company would be located in Brooklyn, in the New York City at a quality office spaced and should offer high technology-based new products and services in the desktop publishing market segment including effective design, logos design, promotional brochure, calendars, business cards, newsletters, typeface and fonts and so on addressing needs of the customers.
In addition, the company would offer web graphics for websites, electronic publishing, redesign the existing web pages with a better looks, converting conventional graphics to web graphics with color awareness modifying the digital photographs with professional looks by using Microsoft Publisher and all other high end desktop publishing software that would ultimately bring customer’s satisfaction and generate strong customer base.
The ABC Graphics company that is in the concluding stages of planning and has settled to go for grand opening on June 15, 2014 and start campaign regarding the opening through electronic and print media keeping into attention to the local universities, small and medium-sized business like travels and tours and those who are interested in desktop publishing.
As an industry, desktop publishing is a faster-growing domain where large numbers of small and medium printing service seekers and independent operators are shifting to the desktop publishing leaving costly traditional publishing and the ABC Graphics has planned to offer very economical price for high-quality product and services in the industry with the mission and vision as follows:
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ABC Graphics has aimed to offer less time-consuming high-tech publishing for online and hard-copy printing in the local and international market as an alternative to the traditional publishers for both small and large orders, initially the company is home-based small company, but aimed to turn into a giant in the desktop publishing in the US market and globally.
The Industry, Target Customers, and Competitors Analysis
Key characteristics of the industry (different segments, and the niche)
For the last two decades following the exploration, IBM personal computer and introduction, the Internet has brought revolution in the Desktop Publishing Industry, the door of digital contents as a foundation of the economic dynasty and shifted the printing and publication in a new dimension.
According to the report of Robert (2011), the Desktop Publishing Industry has turned into an industry of 5 billion dollars in the US market where about thirty thousand people had employed, and furthermore 20 thousand people are self-employed here with a medium salary range at $36,600.
The DTP Industry was started its journey top its next generation with various digital disorder experience, the new web-based platforms that give the printing and publication industry with a greater opportunity to divert the previous economic gains from the digital dynasty of DTP, but the migration from the analog to digital publishing necessitates some technical know-how.
The individualized printing needs that were a daydream for most of the individual research fellows, writers, and authors who were delighted to have a publication, but don’t drive to implementing them thinking the higher cost of traditional printing press where the individuals enjoy greater control over their works and their style and presentation with highly finished graphics.
All over the globe, the requirement for cost-effective printing and publication has been rising dramatically for the last two decades, at the same time, demand for creative printing; graphic design has tremendously flourished due to the development of different customized software for desktop publishing.
A large number of desktop publishing companies have been working in Brooklyn, New York with a new appeal in the market for both the quality of work and cost-effective solution, the entrepreneur of the ABC Graphics company, has aimed to offer 20% off for the target customers in the hometown.
The company sets its primary target market at Brooklyn, New York while customers of this area both individual and corporate level would be addressed as target customers for desktop publishing, although there are huge such business entries at Brooklyn including the individuals, businesses, and corporate customer.
The ABC Graphics company would provide further attention to the customer segment of restaurant menus, regular upgrades of food industry, wedding programs, special events of cubs and bears, funeral programs, fund-raising campaign, report and assignment printing for students of various universities, eye-catching advertising, sports organizers and banners, promotional billboard sponsors as its potential customer’s segment.
At Brooklyn, New York, there are many desktop publishing companies, Digital Graphics, Touchstone Publisher, Millennium Printers, and St George Graphics, MSS Graphics Laboratories are the major competitor in the market and could influence the market entry of the ABC Graphics. Most of the competitors have several outlets in the New York City and some of them have national network all over the USA and have retail outlets in every state; so, the ABC Graphics company has to be strategic planning to get the entry in such competitive market.
As a new entry in the quickly expanding market, there are some other alternatives to the ABC Graphics to follow as an entry strategy, but eager to offer a great discounted price for the superior quality of work.
Most of the competitors of this area have regular advertising in the print and electronic media, and it would not be wise for ABC Graphics to go for competition with such competitors who engaged advertising for every dollar wage, but the company would go for point-to-point sales drive with sample works, rate chart and business card.
From such sales drive, the ABC Graphics company would generate a steady sale order and would deliver through courier after finishing the tasks. Door-to-door sales drive, face-to-face interaction with the targeted customers, showing sample works to them, attending their telephone calls, personal visits and timely delivery of orders with the excellence of quality and competitive price is the basic strategic opening for ABC Graphics Company.
The initiator of ABC Graphics Company has vast knowledge and experience in graphic designing, which will help the company to minimize business risk and develop a customer base in New York City; in addition, it is one of the fastest-growing industries, for this reason, it will be easy to arrange capital.
The Marketing Plan
Graphic arts sector became popular and got acceptance to the large customer group on creative traditional printings; on the other hand, the interest of the people had increased due to the introduction of powerful software like “Macintosh.” However, the management of this company will recruit creative operators and graphic designers who are able to create extraordinary printings for the customers using new software; moreover, the aim of this strategy is to ask reasonable prices for the impressive printings.
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Identifying and attracting customers, selling approach, type of salesforce
Marketing strategy of this desktop publishing company will be different for different target customers considering their specification, for example, food chains demonstrate specialized markets with specific needs for which the creative designers will concentrate on the requirement of the clients. In addition, it will offer a wide range of products and services for wide target market; it will attract the students by advertising in campus newspapers, and it will offer services to the businessmen by advertising in business Journal.
Sales Promotion and Advertising Strategy
The owner will spend only $6000 for the advertising purpose, as she will operate a small business in this industry; however, it will spend $2000 within the first two months to attract target customers in Brooklyn, New York.
At the same time, the owner will follow modern advertising policies, for example, social media strategy as it is a cheap and easy process to reach target customers; in addition, she will focus on personal sales calls, face-to-face communication, writing a regular column in tabloid-sized newspaper, distribution of samples and many other strategies.
Credit and Pricing Policie
This desktop publishing company will use competitive pricing policy, and the price will be determined after conducting a market survey to assess the pricing policies of the local competitors; however, the owner will offer lucrative discounts and credit facilities to the multiple customers and other target customers, such as students. The owner of the ABC Graphics company estimates that it will be able to make a profit for several reasons, for instance, the total costs will be minimal, and the market situation will be favorable and so on.
Product and Services
The aim of this company is to design product and service line in order to reduce the high cost of traditional printing; however, the production system was complicated before the adoption of the advanced technology since more than three companies need to give effort jointly to get final products for which it was difficult to make a profit.
After introducing different typesetting and page layout software and laser printers, desktop publishing becomes an essential part of document production, which also reduced production costs, time, and efforts; at present, this is a well-established industry all over the world for this reason this company will design product and service to minimize the efforts of the customers.
The products and services will be simple, but creative and highly appealing style; the main products include design funeral programs, flyers (sale at an upscale art gallery), brochures, wedding programs, business cards, banners; however, other products include in the following table:
|Business Plans with creative writing||Newsletters|
|Church Bulletins||Restaurant Menus|
|Dissertation and thesis writing||Resume writing|
|Direct Mail Pieces||Term Papers|
Table 1: Short product list. Source: Self-generated
The ABC Graphics Company has already considered that the desktop publishing products and services are purchased and consumed by way of word-to-mouth basis while the past experience of order pursuing, and timely delivery, good relationship, a distance of the customer from the sales outlet are the major consideration by the potential customers.
The major outlets of the potential customers are situated in central Brooklyn, managers of the mid-level companies, major chamber of commerce, and business associations are surrounded by office premises of ABC Graphics Company and would distribute its final products to the customers door-to-door by the sales team who would visit the customers on the time of delivery.
To ensure time worthy distribution, the company would also use courier services as well as online distribution for digital and web-enable products (Longnecker, Petty, Palich & Hoy, 2012).
The following figure shows that most of the customer will take for a long-time to decision-making regarding purchase from this firm; however, the following table gives more details in this concern:
The Management Team:
Monica has passed Masters Degree in Graphic Design, and she is going to start this home-based desktop publishing firm; she has already established a small business firm, and she would like to be successful businessman using the creative and innovative business idea and creation.
She will operate this business as a Chief Executive Officer and Manager; so, handle all phases of the day-to-day business functions, such as, making personal sales calls and developing public relations; however, she will work at least seven hours per day to develop this company.
The owner will recruit a manager in order to perform routine functions; new manager must have wide knowledge in business administration and experience in graphic design; however, new manager will be responsible for all phases of the day-to-day activities including share administrative and sales responsibility with the CEO, develop and manage prospective markets, prepare and insert display and so on.
However, manager will also be responsible for discussing with customers regarding services of this firm along with their requirements, and function to promote sales in the local market, communicate with the community and engage in promoting the sales activities; in addition, he will check and compose graphic layouts, proofread papers, control employees, and design advertisement policies and many other functions.
Plans for Recruiting and Training Employees
The owner will control the main operating system of the business, but she will recruit a number of employees in the salary range of $6 to $7 per hour to produce different types of products; however, the employees will get a bonus for the quality performance and positive feedback from the customers, and other purposes.
Furthermore, the manager will train the new staff and part-time employees to develop their efficiency level of graphic design, provide information about customer behavior, Keep current with DTP advances, and other routine activities; however, the training period will be flexible as most of the employees will be students of the graphic design and they have initial knowledge in this field.
The Operations Plan
Location Plan (operating facilities: location, space, and equipment)
The proposed ABC Graphics Company would be located at central Brooklyn, New York with an office space of 500 meters and the office would be well-equipped will all desktop publishing equipment, such as, heavy-duty printer with necessary computer stations, high regulation scanners, coppers, along with software like Microsoft Publisher, and Adobe InDesign would be ready for production.
Manufacturing, quality control, inventory control, supply, and purchasing
For manufacturing and quality control from the same location, there would also be various software equipped with a high regulation digital camera, picture format converters, and 3G enablers’ communication port for digital delivery of web-enable products such as digital distribution of electronic journal and newsletter, teacher’s student report delivery.
There would also be automated software for billing, accounting, inventory management, supply chain management, and to administer the purchasing procedures, including other background services for traditional printing presses would be delivered from this location.
Hours of Operation
In this creative and challenging sector, the employees have to prepare to work more time than other jobs since the nature of the business particularly production process is different; however, working hours will be depended on the number of projects in hand, external and internal factors, effectiveness of the equipment and powerful software, and many other circumstances.
|1||Equipment and Fixtures||$30000|
|2||Advertising and Promotion||$6000|
|3||Deposits and initial start-up costs||$10000|
Table 1: Important Assumption. Source: Self-generated
|Equipment||Brand||Model / Capacity||Costs|
|2 Hard Drive||Xographics||300 MG/New||$4000|
|Paper Cutter||Martin-Yale||1 HP/New||$2400|
|2 Laser Writer Printers||Apple||Int/New||$10000|
|2 Scanner||Microtek||MSD 300Z/New||$3700|
Table 2: Equipment and Fixtures Costs. Source: Self-generated
Sources of Financing
|1||Principal’s Equity||$ 10000|
|2||Borrowed Capital (from Bank or another investor)||$ 60000|
Table 2: sources of financing. Source: Self-generated
Pro forma Financial Statements for Three Years
Pro forma Income Statement for the next three years
|ABC Graphics Company |
Projected Balance Sheet for three years
|2015 ($)||2016 ($)||2017 ($)|
|Sale of Printing||138586||173234||199218|
|General & Administrative||75828||80,000||84400|
|Net Income Before Taxes and Interest||21798||55428||61586|
|Net Income or Loss||12176||30664||43628|
Table 3: Projected Income Statement. Source: Self-generated
Pro forma Balance Sheet for the next three years
|2015 ($)||2016 ($)||2017 ($)|
|Cash and Equivalents||31188||60848||99802|
|Receivables from Sales||6786||8482||9756|
|Total Current Assets||41188||72612||113330|
|Equipment & Machinery||30000||30000||30000|
|Less accumulated depreciation||4286||8572||12858|
|Net Fixed Assets||25714||21428||17142|
|Income Tax Payable||4058||10222||14542|
|Short Term Notes||0||0||0|
|Total Current Liabilities||6462||12676||17364|
|Long Term Liabilities||38262||28526||16640|
|Notes Payable, Bank||0||0||0|
|Total Long Term Liabilities||38262||28526||16640|
|Total Stockholder’s Equity||22176||52840||96468|
|Total Liabilities & |
Table 4: Projected Balance Sheet. Source: Self-generated
Pro forma Cash Flow Statement
|Month 1 ($)||Month 2 ($)||Month 3 ($)||Month 4 ($)||Month 5 ($)||Month 6 ($)||Month 7 ($)||Month 8 ($)||Month 9 ($)||Month 10 ($)||Month 11 ($)||Month 12 ($)|
|Beginning Cash Balance||10000||4110||3056||6380||6098||6234||16806||17778||19042||20608||22482||24672|
|Cash Receipts from Sales||4400||8866||9354||9868||10410||10984||11472||11878||12290||12720||13164||13626|
|Total Cash Available||14400||12976||12410||16248||16510||17218||28280||29652||31332||33326||35646||38298|
|General & Administrative||750||772||796||820||848||880||914||950||992||1036||1084||1138|
|Total Cash Disbursements||7016||8534||8640||8752||8872||9000||9134||9240||9352||9470||9594||9726|
|Net Cash from Operations||7384||4442||3770||7496||7638||8218||19144||20412||21980||23858||26052||28572|
|Proceeds of Loans|
|National Bank, Fixtures & Equip||30000|
|National Bank, Operating Line||00||2,000||2,000||5,000|
|Net Cash Balance||$ 4110||3056||6380||6098||6234||16806||17778||19042||20608||22482||24672||27188|
Table 5: Projected Cash Flow Statement of the ABC Graphics for 12 months. Source: Self-generated
The break-even point indicates the level of a business operation where it operates without loss or profit, while a business firm generates sales revenue less than the break-even point, it would evidence loss, on the contrary, while it generates sales revenue more than the break-even, the company would make a profit and would rise while moves upper to the right direction.
For ABC Graphics Company at the first month of operation, it generates US$ 8800 while the company has to evidence an expense of US$ 9544. As a result, the company has resulted in a loss in the first month. In the second month, the company also evidenced sales revenue of $ 9284 but faced an expense of $ 9,652, but the third month the company evidenced to reach the break-even point, the following figure illustrates more details of break-even analysis:
|Debt to Equity Ratio||2||0.80||0.40|
|Return on Investment||54.89%||58.1%||45.21%|
Table 6: Ratio Analysis for the ABC Graphics. Source: Self-generated
From the current ratio and quick ratio, it can be said that the liquidity position of this DTP will be stable position; at the same time, reduction of debt to equity ratio indicates that it can experience financial growth with minimal growth.
Longnecker, J. G. Petty, W. J. Palich, L. & Hoy, F. (2012). Small Business Management Launching & Growing Entrepreneurial Ventures. London: Thomson South-Western.
Robert, W. (2011). Starting a Desktop Publishing Business. Web.