Business Plan for a Forex Trading Company

This assignment requires a thorough analysis of a business plan for a hypothetical forex trading company. Students must examine the proposed company's market analysis, including economic indicators, competitor landscape, and target customer profile. The financial projections, such as revenue streams, cost structure, and profit margins, need to be critically evaluated. Furthermore, students should assess the competitive advantages of the forex trading company and identify potential risks and challenges.

Running Head: Business Entrepreneur
Business Entrepreneur
Currency consulting firm

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Contents
Introduction......................................................................................................................................1
Services offered...............................................................................................................................1
Currency consultation..................................................................................................................1
Research reports...........................................................................................................................2
Live Screen..................................................................................................................................2
Business model Canvas...................................................................................................................2
Customer Segments......................................................................................................................2
Value proposition.........................................................................................................................3
Customer relationships.................................................................................................................3
Channels.......................................................................................................................................4
Key activities................................................................................................................................5
Key resources...............................................................................................................................6
Key partners.................................................................................................................................7
Revenue Structure........................................................................................................................7
Fixed Fee......................................................................................................................................7
Profit Sharing...............................................................................................................................7
Cost structure...............................................................................................................................7
Minimum Viable product.............................................................................................................8
Feasibility analysis...........................................................................................................................8

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Market Feasibility........................................................................................................................8
Technical Feasibility....................................................................................................................8
Human Feasibility........................................................................................................................9
Financial Feasibility.....................................................................................................................9
References:....................................................................................................................................10

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Introduction
Entrepreneurship, in simple words, is the process that involves establishing a new business. The
person who establishes this new business is known as an entrepreneur. The subject of
Entrepreneurship is tremendously wide. To the deep end of logic, Entrepreneurship defines a
style of thinking and it is predominantly an attitude which involves finding solutions to problems
and thus generating value (Business News Daily, 2017). Entrepreneurship is absolutely vital for
every national and international economy as it provides a platform for innovation and that
provides base to growth. Which is why various governments are encouraging and expansively
working to provide support and propagate businesses by offering grants, aids and subsidies.
My new business idea involves the institution of a ‘currency consultation’ firm. Given the
economic scenario at the moment, we have noticed that there are enormous fluctuations in the
currency market specifically in the Australian Dollar - US dollar pair. Over a span of last three
years alone, the domestic currency has faced a low of 0.6861 and a high of 1.0608 (XE, 2017).
No doubt, such sharp movements of the currency will not pose an impact directly on people, but
there are numerous businesses including but not limited to exports and imports where such
fluctuations tend to have a major influence (ABC News, 2015). The main target of the currency
consulting firm is to provide assistance to clients for tracing, inspecting, governing, working at
reducing the impact as well as taking due benefit of these fluctuations.
Services offered
Currency consultation
This is the primary service offered by the firm where in the clients will be advised on a daily
basis upon their trade orders. They will be given a daily update on the currency movements and
how they can protect themselves against unwanted risk. The detailed analysis would be done on
the basis of fundamentals and technical. Fundamental analysis refers to scrutinizing the
economic data of countries and gaining an understanding of its influence over the currency. The
data which is collected includes GDP growth rate, inflation rate, interest rate fluctuation,
unemployment rate and meeting minutes of the Reserve bank of Australia. (Forex Factory,
2017). On the other hand technical analysis includes the study of historic fluctuations in the

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currency, applying formulae and mathematically predicting the upcoming trends. This can be
accomplished by the use of Reuters’ and Bloomberg terminals. They are the most effective tools
of financial analysis (Financial Times, 2017)
Research reports
This is a secondary service which requires the firm to send daily updates to clients via reports.
This also helps in eliminating any kind of miscommunication when advises are given on the
phone.
Live Screen
Most of the importers and exporters look at live rates from leading news channels and websites,
however, they offer a lagged rate and banks do not accept this rate. This is why we will be
providing our clients with a Reuter or Bloomberg linked live screen installed on their personal
computers. This will help them negotiate with the bank.
Business model Canvas
Proposed by Alexander Osterwalder, Business model canvas is a strategic management tool
designed specifically to help new startups formulate and organize their plans and get a clear
picture of their venture. It provides convenience of business planning and organizing and assists
in defining a complicated business in nine simple components (Forbes, 2012).
Customer Segments
Customer segments essentially involves the market of specific customers targeted by the firm or
Target market. Phillip Kotler defines target market as a set of well-defined set of customers
whose needs the organization plans to satisfy (Creighton University, 2002). Customer segments
predominantly targeted by the company would include businesses importing to Australia. At
large, Australian imports include gold, wheat, petroleum, iron ore and coal. Businesses that are
exporting from Australia to other parts of the world products including but not limited to natural
gas, agricultural products, minerals and wool will also for a part of primary target market.
Geographically, the business will commence operations in the heart of the country, Sydney. This

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would be an advantage given the city is home for a sundry number of export and import
businesses. However clienteles would be targeted throughout the country.
Value proposition
Value proposition refers to the ways in which any organization creates tangible on intangible
value for its clients. The currency consulting firm aims to achieve three targets
1. Increase awareness of the currency markets: Currency fluctuations majorly affect
importers and exporters of our country. Yet little is done to gain knowledge due to the
complexity of the subject. This firm predominantly aims to increase awareness amongst
clients about currency markets, factors that influence currency movements and how can
businesses remain protected from them. This awareness will eventually help them predict
near future fluctuations in the currency and hence will be in a better position to mitigate
any risks arising from them.
2. Reduce risks faced by clients due to currency fluctuations: The barometer of trade in
Australia is consistently rising and the forecast looking upwards for the same (Reuters,
2017). This is demonstrated by the facts and figures showing that Australia has exported
AUD 31.05bn and has imported AUD 30.66bn worth of goods and services in July this
year (Trading Economic, 2017). The currency fluctuations often lead to losses faced by
our exporters and importers as they find it difficult to predict currency movements. Our
firm aims to reduce these risks so the clients can be better equipped to hedge their trade
transactions.
3. Increase in profit margins: Like every other consultancy, the measurable goal of our firm
would be to increase profit margins of our clients by guiding them in the most
appropriate manner about how they can hedge their currency. This is the only tangible
value proposition offered by the firm and hence is the most important. Once clients are
aware about how the currency market functions and what the factors behind these daily
fluctuations are, they can make better decisions and hence reduce the risks associated
with them therefore leading to increased profits.

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Customer relationships
Customer relationships are an important aspect of any business. They pave way for loyal
customers and increase organizational efficiency. There are following ways in which the firm
will ensure long term and healthy customer relations.
1. Monthly review meetings: Regular review meetings with customers help them stay
connected to the organization. These meetings ensure that customer feedbacks and
improvisation plans are followed through and any grievances from the clients can be
efficiently addressed.
2. Regular telephonic feedbacks: Meetings can be conducted monthly but besides that
telephonic conversations help in relationship building with clients. Wishing them on their
birthdays/anniversaries etc. will also add a personalized touch and further assist in client
retention.
3. Daily advisory: As a part of the services offered by the company, daily advisory must be
provided to clients about the currency markets, their overview, analysis and forecast.
4. Daily reports: Everyday reports will be sent to clients. These reports will contain detailed
analysis of currency markets along with charts and fundamental details. This is also done
to avoid any miscommunication on the phone.
5. Customer relationship management team: There will be a dedicated team who will work
on enhancing customer relations with all the clients. They will ensure that they can be
reached all the time and any issues faced by the client will be addressed by them. They
will also make sure that clients are wished on special occasions like their birthdays,
anniversaries, New Year and Christmas etc.
Channels
Channels are mediums that connect the organization to its clients. We will be reaching out to
clients by the following means:
1. Events: A lot of events are conducted regularly by various export and import associations
like Export council of Australia, Australian exporters association, Food and beverage
importers association of Australia. These events are attended by all renowned exporters

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and importers of the country and hence will provide us with a perfect platform to market
our services.
2. Referrals: Referrals are an efficient way of getting more clients on board. They are
basically friends, associates or acquaintances of our clients. If the client is happy with our
services, they may refer other exporters and importers to associate with us (Berman,
2016). Certain referral bonuses can also be offered as this way existing clients will also
work at introducing new prospects to the organization.
3. Cold calling: There will be a dedicated presales team whose job would be to cold call all
the exporters and importers in the country, tell them about our organization and fix
meetings with them. They is the more traditional channel of reaching out to clients.
4. Marketing and PR activities: Television ads and sponsoring events of import-export
associations will help to spread awareness about our services. There will be a marketing
and PR team who will ensure that the firm is well branded.
5. One on one meetings: Once the presales team does cold calling, one on one meetings will
be conducted with clients across the country with an aim to market our services, get them
on board and also enhance our knowledge about the industry news.
Key activities
1. CRM: customer relationship management is an important aspect of maintaining healthy
and fruitful relationships with customers once they are on board. Their aim is an
increased level of customer retention. And bridging the gap between client and
organizations (Mithas, 2013).
2. Research: Research team is the basis on which a currency consulting firm can function.
Our product is our detailed knowledge on the currency markets and this can be
accomplished on with the help of a very eminent and competent research team. The
research team will formulate the company’s outlook on the currency and hence they are
the backbone of the organization.
3. Market analysis: Market analysis would be done by each and every person in the
organization. Everyday a meeting would be conducted where members from all the teams
would come together and discuss their viewpoints on the currency market. Based on a

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combined analysis, the organization will form one view, which will then be
communicated to the clients.
4. Selling: Like every other organization, services needs to be sold and that requires a
dedicated sales team who will reach out to potential clients and help to bring them on
board. They are driven by revenue generation targets.
5. Marketing and PR: Marketing and PR are activities revolving around spreading
awareness about the organization and its services to a wider audience (Nath, 2014). This
assists in building a brand name for the firm and ensures that the goodwill of the
organization sustains.
6. Customer profiling: This is a fairly new concept and helps organizations segment their
market and define their target customers. This includes creating a portrait of customers,
understanding their needs and goals and eventually serving them based on these outlines
(Varela, 2014).
7. Pre-sale service: Often organizations make the mistake of reaching out to prospective
clients without enough knowledge about them. Pre-sales activities involve gathering
information about the clients, making a customized presentation for them and assisting
sales team with any other information that they might require (Agnihotri, 2017).
8. After sale service: Once the client comes on board, it is imperative that services promised
are efficiently delivered. Over promising leads to dissatisfied clients and higher client
attrition.
Key resources
1. Human resource: Like every other organization, humans are key resources of the firm.
This includes every member of the organization. Every business must make sure their
employees are satisfied, motivated and fairly compensated (Kramar, 2014).
2. Bloomberg or Reuter’s terminal: As discussed above, the firm requires a Bloomberg or a
Reuter’s terminal in order to get the exact exchange rate which is accepted by the banks.
This terminal is useful in receiving live news, helps in getting charts and previous data of
the currency dating back to over 100 years and hence is an extremely important research
tool.

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3. Library of research reports: As mentioned before, research forms the backbone of this
organization and hence it is crucial that from the first day, all the reports released by the
firm are accumulated together as they will be a major resource of the firm.
4. Data team: Data team will fetch data about exporters and importers around the country
and their details. This data can also be a very useful resource for the firm in the years to
come.
Key partners
1. Head of sales who will have a sales team reporting to him and will take complete
responsibility in ensuring revenue generation for the company.
2. Head of consulting will lead the research and analytics team and will take complete
responsibility for appropriate view of the market and correct forecast of the currency
market.
Revenue Structure
The firm offers niche services and therefore the customers targeted would comprise of export or
import businesses earning a turnover greater than AUD 20 million. Many firms make immense
mistakes in pricing their products because they fail to consider that a similar pricing strategy
cannot work well for every client (Forbes, 2015). Hence the firm is equipped to offer two
separate business models to clients and they can select the one they prefer.
Fixed Fee: As the name suggests, services offered will be charged as a fixed consultation fee per
annum. This will be varied for every client and will be decided based on their annual trade
turnover. Payment structure will include two parts. One part of the remuneration will be paid in
advance whereas the second part will be paid after 6 months of regular service. The advance fee
model will help the firm cover costs for client acquisitions. One advantage of this model is that it
establishes an element of trust in the clients specifically when they are provided with an option to
make half the payment later.
Profit Sharing: Just as the name suggests, this model provides clients with an option to share the
profits earned six monthly, monthly or quarterly. The payment cycle will depend on the business
cycles of the client. This facility is provided to the clients because the time duration between

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receiving an order by the client and actual delivery of the goods can vary between one to six
months (Inc., 2010). Appropriate systems would be in place to track when and exactly how much
have clients earned from the expert advices offered by the firm. In addition, an updated portfolio
management sheet shall be provided to all the clients.
Cost structure
There are four kinds of costs involved with the formulation of this firm as given below. They are
self-explanatory.
1. Employee salaries
2. Land and building expense
3. Bloomberg Reuters terminal
4. Marketing and PR costs
Minimum Viable product
Minimum viable product is the most basic product or service offered by any organization. It is a
no frills product and defines the least that organization can offer (Blank, 2013). Research reports
and daily advisory to all clients is the minimum viable product offered by the firm.
Feasibility analysis
Feasibility analysis is gaining an understanding of how successfully can any project be
completed. This is predominantly determined by four important factors (The Balance, 2017).
Market Feasibility
Upon analysis of market feasibility of a currency consulting firm, it has been noted that the
market offers a brilliant opportunity for the formulation of this firm. The major competition
include brokers who are not solely focused on providing consultancy to clients. Also the high
density of exporters and importers in the Australian subcontinent provides us with a large market
to sell our services.

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Technical Feasibility
Technically, the service is simple to understand and does not require a lot of resources. Clients
will be communicated over the phone. Bloomberg and Reuter terminals will require experts who
can perform technical and fundamental analysis using them. These experts will be hired from
best universities and firms and will be given due training.
Human Feasibility
Human resource will be hired from tier 1 universities across the country with exceptional
relevant experience. There are various universities which are now offering courses on capital
markets and hence this feasibility aspect can also be achieved.
Financial Feasibility
Like every other business, initial capital will be raised with the help of families and friends of the
key partners. Bank loans can be applied for and angel investors will be approached for funding
purposes.

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References:
ABC News, 2015, ‘Falling dollar, rising fortune’
http://www.abc.net.au/news/2015-08-05/jericho-a-falling-dollar,-a-rising-fortune/6673074,
viewed on 3 October, 2017.
Agnihotri, R., Trainor, K. J., Itani, O. S., & Rodriguez, M. 2017. Examining the role of sales-
based CRM technology and social media use on post-sale service behaviors in India. Journal of
Business Research, 81, 144-154.
Berman, B. 2016. Referral marketing: Harnessing the power of your customers. Business
Horizons, 59(1), 19-28.
Blank, S. 2013. Why the lean start-up changes everything. Harvard business review, 91(5), 63-
72.
Business News Daily, 2017, ‘What is entrepreneurship’,
http://www.businessnewsdaily.com/2642-entrepreneurship.html, viewed on 3 October, 2017.
Financial Times, 2017, ‘Bloomberg suffers rare drop’, https://www.ft.com/content/6b547cb8-
1396-11e7-80f4-13e067d5072c, viewed on 3 October, 2017.
Forbes, 2012, ‘Business model canvas’,
https://www.forbes.com/sites/tedgreenwald/2012/01/31/business-model-canvas-a-simple-tool-
for-designing-innovative-business-models/#5f0a29bf16a7, viewed on 3 October, 2017.
Forbes, 2015, ‘The biggest mistake you can make while pricing services’,
https://www.forbes.com/sites/ianaltman/2015/12/22/the-biggest-mistake-you-can-make-pricing-
services/#d5ca15da38a8, viewed on 3 October, 2017.
Forex Factory, 2017, ‘Economic calendar’, https://www.forexfactory.com/calendar.php, viewed
on viewed on 3 October, 2017.
Inc., 2010, ‘How to build a profit sharing model’, https://www.inc.com/guides/2010/04/profit-
sharing-plan.html, viewed on 3 October, 2017.

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Kotler, P, 2011, https://people.creighton.edu/~shu02225/nps_c_04.html, viewed on 3 October,
2017.
Kramar, R. 2014. Beyond strategic human resource management: is sustainable human resource
management the next approach?. The International Journal of Human Resource
Management, 25(8), 1069-1089.
Mithas, S., Krishnan, M. S., & Fornell, C. 2013, May. Why do customer relationship
management applications affect customer satisfaction? American Marketing Association.
Nath, P., & Bell, M. 2016. A study of the structural integration of the marketing and PR
functions in the C-suite. Journal of Marketing Communications, 22(6), 626-652.
Reuters, 2017, ‘Australia’s central bank holds fire as economy on the rebound’,
http://www.reuters.com/article/us-australia-economy-currentaccount/australias-central-bank-
holds-fire-as-economy-on-the-rebound-idUSKCN1BG07D?il=0, viewed on 3 October, 2017.
The Balance, 2017, ‘Feasibility study’, https://www.thebalance.com/what-is-a-feasibility-study-
3514853, viewed on 3 October, 2017.
Trading Economics, 2017, ‘Australian Exports’, https://tradingeconomics.com/australia/exports,
viewed on 20 September, 2017.
Trading Economics, 2017, ‘Australian Imports’, https://tradingeconomics.com/australia/imports,
viewed on 20 September, 2017.
Varela, P., & Ares, G. (Eds.). 2014. Novel techniques in sensory characterization and consumer
profiling. CRC Press.
XE, 2017, ‘AUD to USD Chart’, http://www.xe.com/currencycharts/?
from=AUD&to=USD&view=5Y, viewed on 3 October, 2017.