Business Plan Term Project - KNH Advertising Agency

Running head: BUSINESS PLAN TERM PROJECT
BUSINESS PLAN TERM PROJECT
KNH ADVERTISING AGENCY
Address:
Phone Number:
Name Of The Lead Entrepreneur:
Contact Number Of the Lead Entrepreneur:

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Table of Contents
1.0 Executive Summary...................................................................................................................3
2.0 Industry Analysis.......................................................................................................................3
2.1 Industry Size, Growth Rate and Sales Projections................................................................3
2.2 Industry Structure..................................................................................................................4
2.3 Nature of Participants............................................................................................................5
2.4 Key Success Factors..............................................................................................................5
2.4.1 Novelty of the Business Idea..........................................................................................5
2.4.2 Timing.............................................................................................................................6
2.4.3 Entrepreneurs..................................................................................................................6
2.5 Industry Trends......................................................................................................................6
2.6 Long-term Prospects..............................................................................................................7
3.0 Company Description................................................................................................................7
3.1 Company History...................................................................................................................7
3.2 Mission Statement.................................................................................................................9
3.3 Services..................................................................................................................................9
3.4 Current Status........................................................................................................................9
3.5 Legal Status and Ownership..................................................................................................9
3.6 Key Partnership...................................................................................................................10
4.0 Market Analysis.......................................................................................................................10
4.1 Marketing Segmentation and Target Market Selection.......................................................10
4.2 Buyer Behavior....................................................................................................................10
4.3 Competition Analysis..........................................................................................................11
4.4 Estimates of Annual Sales and Market Share......................................................................13
5.0 Economics of the Business......................................................................................................14
5.1 Revenue Drivers and Profit Margin.....................................................................................14
5.2 Fixed and Variable Costs.....................................................................................................14
5.3 Operating Leverage and its Implications.............................................................................14
5.4 Start-up Costs.......................................................................................................................14
6.0 Marketing Plan.........................................................................................................................15
6.1 Overall Marketing Strategy.................................................................................................15
6.2 Marketing Mix.....................................................................................................................17
6.3 Sales Process........................................................................................................................18

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6.4 Sales Tactics........................................................................................................................19
7.0 Design and Development Plan.................................................................................................20
7.1 Development Status and Tasks............................................................................................20
7.2 Challenges and Risks...........................................................................................................20
7.3 Projected Development Costs..............................................................................................21
7.4 Proprietary Issues.................................................................................................................21
8.0 Operations Plan........................................................................................................................21
8.1 General Approach to Operations.........................................................................................21
8.2 Service Production...............................................................................................................22
8.3 Business Location................................................................................................................22
8.4 Facilities and Equipment.....................................................................................................23
9.0 Management Team and Company...........................................................................................23
9.1 Management Team..............................................................................................................23
9.2 Board of Directors...............................................................................................................24
9.3 Board of Advisers................................................................................................................24
9.4 Company Structure..............................................................................................................25
10.0 Overall Schedule....................................................................................................................27
11.0 Growth Plan...........................................................................................................................29
11.1 Internal Growth Strategies.................................................................................................29
11.2 External Growth Strategies................................................................................................29
11.3 Projected Exit Strategies....................................................................................................29
12.0 Financial Projections.............................................................................................................29
12.1 Sources and uses of fund statement..................................................................................29
12.2 Pro Forma Income Statement............................................................................................30
12.3 Pro Forma Balance Sheet...................................................................................................30
12.4 Pro Forma Cash Flows.......................................................................................................31
12.5 Ratio Analysis....................................................................................................................32

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1.0 Executive Summary
The purpose of this paper is to create a business plan for the venture KNH Advertising
Agency which would be established in Eastern Province, Khobar, Alolyaa District, Saudi Arabia
and offer marketing solutions or advertisement services to the different new start-ups and also
the existing business corporations of the concerned nation. The paper firstly undertakes an
industry analysis and this reveals the fact there are only a handful of advertisement agencies
which offer marketing solutions or advertisement services to the corporations or to the new start-
ups within Saudi Arabia. Furthermore, the entrepreneurs, Khalid Alameer, Namad Alshetawi and
Naif Alsfayan, consider the novelty of the business idea, its timing and also their skill sets as the
three most important critical success factors which are likely to affect the success of the venture.
Along with these aspects, the paper also highlights the services which would be offered by the
venture, its structure (functional structure), the Board of Directors (Khalid Alameer, Namad
Alshetawi and Naif Alsfayan) and other important details regarding the venture. In addition to
these, the paper also sheds light on the marketing strategy that the venture will use (digital
marketing strategies), its target market (new start-up business ventures and also the existing
business ventures of Saudi Arabia), the product, price, promotion and the place strategies that the
ventures needs to use and the important details related to marketing.
The paper also undertakes a discussion of the sales process and the sales tactics that
needs to be used by the venture for the purpose of enhancing its sales. More importantly, the
results of the competition analysis reveals the fact that because of the novelty of the business
idea used by the venture it is not likely to face any significant amount of business competition
with Saudi Arabia. Along with these, the paper also outlines the revenue drivers, profit share,
fixed and variable cost and the other important details of the break even calculation.
Furthermore, the paper also provides a brief overview of the management and the operations
plan that would be followed by the venture for achievement of its business goal, that is, to
become the largest and the most profitable marketing solution provider within the nation of
Saudi Arabia. Lastly, the paper also undertakes financial analysis and concludes by
recommending the growth strategies like product diversification, franchising and others that the
concerned venture needs to follow in future to accelerate the pace of its growth or development.
2.0 Industry Analysis
2.1 Industry Size, Growth Rate and Sales Projections
The number of entrepreneurial start-up business ventures established in the year 2018 in
the nation of Saudi Arabia showed an increase of 31% in comparison to the year 2017. This is
likely to boost the national economy of Saudi Arabia by more than $67 million and this account
for around 9% of the entire revenue generated by the business sector of the concerned nation.
More importantly, unlike the other nations of the world wherein it is seen that the different
entrepreneurial business ventures are the resultant effect of the investments made by the foreign
sponsors or the business corporations within the nation of Saudi Arabia it is seen that these
ventures are established through the initiatives of the local entrepreneurs of the concerned nation.
As a matter of fact, it is seen that Saudi Arabia had emerged as one of the most important
hotspots of entrepreneurial business venture establishment on the score of the thriving nature of
the national economy of the concerned nation.

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The national economy of Saudi Arabia in the year 2019 showed a growth rate of 2.4%
while generating revenue of more than $ 78,652.18 crores. This high growth rate of the national
economy of Saudi Arabia is an important factor which had substantially influenced the different
entrepreneurs of the concerned nation to establish their entrepreneurial business ventures in the
concerned nation. However, the important issue arises since it is seen that there are not many
business corporations within the spectrum of the nation under discussion here which offer
marketing services to these entrepreneurial business ventures. Marketing is one of the core
business processes of the business ventures and the success attained by the entrepreneurial
business ventures is substantially reliant on the effectiveness or for that matter the efficiency of
the marketing strategies which are being used by them. The usage of effective marketing or for
that matter promotional strategies helps the entrepreneurial business ventures to adequately
promote or advertise the services or the products offered by them and also cascade the required
information regarding their venture to the target market on which they focus upon.
However, in the absence of any corporation within the nation of Saudi Arabia offering
marketing services to the different entrepreneurial business ventures it is seen that these ventures
have failed to attain the desired growth level. Thus, it is likely that the entrepreneurial business
venture KNH Advertising Agency on the score of the advertising and marketing services that it
intends to offer to the new entrepreneurial business ventures have the entire market to itself
because of the absence of other corporations which offer similar services. More importantly,
apart from the new entrepreneurial business ventures KNH Advertising Agency would also focus
on the existing business corporations of Saudi Arabia and offer them the required advertising and
marketing services to accelerate the pace of their growth. In the light of these aspects, it can be
said that KNH Advertising Agency is likely to have a high growth rate in business sector of
Saudi Arabia in the absence of any strong competitors and also on the basis of the novelty of the
business services that it intends to offer provided it is being able to maintain high standards of
quality. Furthermore, it is seen that the venture under discussion here would be able to capitalize
on atleast 10% of these start-ups and the existing corporations of Saudi Arabia within the very
first year of its business.
2.2 Industry Structure
Industry structure refers to the size or for that matter the number of competitors which are
there within a particular industry. The size of the competitors rather than the number of
competitors is a better way of analyzing industry structure since it might happen that despite the
presence of a large number of competitors the actual competition within a particular industry
might be less because of the small size or the nature of the business operations of these
competitors and vice versa. More importantly, in the present times it is seen that the industry
structure is being primarily defined in terms of perfect competition and imperfect competition.
Furthermore, the imperfect industry structure is further subdivided into three distinctive
categories, namely, monopoly, oligopoly and monopolistic competition. In the particular context
of the entrepreneurial business venture KNH Advertising Agency it can be said that the industry
in which the concerned venture intends to operate has very few corporations which offer the kind
or for that matter the nature of services that the venture intends to offer to its clients. Thus, it can
be said that the entrepreneurial business venture would be able to enjoy monopoly within the
industry of its operation provided it focusing effectively on the quality of services which are
being offered and also take the help of adequate business strategy for facilitating its growth.

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2.3 Nature of Participants
As mentioned there are very few corporations within the nation of Saudi Arabia which
offer marketing or advertising services to the new start-up business ventures or the existing ones
within the concerned nation. Some of the most important ones in this relation are New Step
Media, sendian creations, 6W Agency, Maze, Blue Brand and others. However, at the same time
it is seen that these corporations primarily focus on the different existing business corporations of
the nation under discussion here and the marketing or the advertisement services offered by them
do not extent to the entrepreneurial business ventures of the concerned nation. Furthermore, the
marketing as well as the advertisement services offered by these corporations of the nation of
Saudi Arabia are very conservation in nature and the majority of these corporations recommend
the usage of the traditional marketing strategies to their clients. As a matter of fact, it is seen that
even when these corporations formulate or for that matter design digital marketing campaigns to
their business clients they lack of effective usage of the concepts of innovation, creativity and
other important attributes which makes a marketing or advertisement grab the attention of the
customers. Thus, in order to overcome the competition that KNH Advertising Agency is likely to
face from these corporations, it would take the help of the concepts of innovation and design
thinking for creating different kinds of digital marketing campaigns or more precisely social
media marketing campaigns for its clients which will enable them to influence the buying
behavior of their consumers. In addition to this, the venture rather than merely focusing on the
existing business corporations of Saudi Arabia would also focus on the new start-up ventures of
the concerned nation as well.
2.4 Key Success Factors
Key success factors are those factors which the corporations are required to have so as to
achieve the goals or for that matter the objectives of their business and thus it becomes important
for the corporations to devote the required amount of attention to them for the achievement of
their business goals or objectives. Key success factors becomes even more important from the
perspective of the different entrepreneurial business ventures since they have the opportunity to
attain the required amount of success despite the competition within the industry in which they
operate by focusing effectively on the success factors. In the particular context of the start-up
venture KNH Advertising Agency the three most important success factors which are likely to
influence the success of the concerned venture are listed below-
2.4.1 Novelty of the Business Idea
The success or the failure of the different entrepreneurial business ventures substantially
depends on the nature or for that matter the kind of business idea on the basis of which the
concerned venture had been established. The entrepreneurs are required to select the kind of
business ideas which are not only innovative or novel in nature but also formulated by taking
into consideration the demand for the same in the business market. In the particular context of
KNH Advertising Agency, it can be said that it is true that the business idea selected by the
entrepreneurs is not a completely innovative or for that matter a novel one however the business
idea when analyzed from the perspective of the nation of Saudi Arabia becomes a completely
innovative or a novel one. This can be explained on the basis of the fact that there are very
business corporations in the nation of Saudi Arabia which are presently offering marketing or
advertisement services to the existing corporations of the concerned nation and even lesser
number of corporations that offer these services to the start-up business ventures of the nation. In
the light of these aspects it can be said that the novelty of the business idea on the basis of which

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KNH Advertising Agency would be established is an important critical success factor which is
likely to influence the success of the concerned venture in the nation of Saudi Arabia.
2.4.2 Timing
The timing of the establishment of a business venture is an important factor which
substantially influences the success or the failure of the same. This enables the entrepreneurs to
effectively capitalize on the different emerging trends on the basis of which they have
established their venture when they are in demand. For instance, within the nation of Saudi
Arabia it is seen that the number of entrepreneurial business ventures which are being established
had increased exponentially and also the different existing corporations of the concerned nation
are also trying to expand their business operations globally. This in turn had made the marketing
or the advertisement services offered by KNH Advertising Agency an imperative one from the
perspective of these corporations and thus it can be said that the present time is the most suitable
one for the establishment of the venture under discussion here. This is likely to help the
corporation to effectively capitalize on the high demand for marketing and advertisement
services within the business sector of Saudi Arabia and thereby would enable KNH Advertising
Agency to attain the desired success within the concerned nation.
2.4.3 Entrepreneurs
The effectiveness or for that matter the efficiency of the entrepreneurs is an important
factor which directly contributes towards the success or the failure of the entrepreneurial
business ventures. The different entrepreneurial trails, their knowledge and skill sets are
important since they help in the identification of the most profitable business ideas, the
formulation of the management plan, operations plan, the marketing plan and other important
attributes of the venture. These aspects are important since they substantially influence the
success attained by the venture. In the particular context of the venture KNH Advertising
Agency, it is seen that three entrepreneurs who have decided to come establish the concerned
venture had the required skill set as well as knowledge or qualification which in turn had not
only helped them to identify the novel business idea on the basis of which the concerned venture
had been established but also effectively design the different business processes of the venture as
well. As a matter of fact, all the three entrepreneurs, Khalid Alameer, Namad Alshetawi and Naif
Alsfayan, hold degrees in human resource management and the knowledge that they acquired
during the degree courses are likely to help them to adequately manage the new venture. These
are likely to enhance the efficiency of the concerned venture and also help it to attain the
required success as well.
2.5 Industry Trends
It is seen that only 3% of the entrepreneurial business ventures which are being
established within the nation of Saudi Arabia every year are being able to sustain themselves and
the rest of the 97% of the start-ups fail to attain the required success or for that matter to sustain
themselves. One of the most important factors which directly contribute towards the failure of
the different entrepreneurial business ventures can be attributed to the ineffectiveness of the
marketing strategies used by them for the promotion of the services or the products offered by
them. As a matter of fact, within the business sector of Saudi Arabia it is seen that there are very
few corporations which offer digital marketing or social media marketing services to the existing
corporations or the new start-up ventures and even the corporations themselves do not ardently
focus on the aspect of marketing or advertisement. This in turn had resulted in the failure of the

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different corporations within the concerned nation. However, presently an interesting trend seen
within the business sector of Saudi Arabia can be attributed to the fact that the different
corporations in the face of the large number of corporations that had failed are increasing
focusing on the aspect of marketing or promoting the services or the products offered by them.
This in turn had substantially enhanced the demand for these services within the Saudi Arabia
and it is precisely this particular trend that the start-up venture under discussion here intends to
capitalize upon.
2.6 Long-term Prospects
The entrepreneurs are required to select the kind of business ideas which rather than
being profitable at the present moment would also be profitable in the future as well. This aspect
of the business idea identification is important since it helps the entrepreneurs to ensure the long-
term growth or for that matter the development of their business venture. The entrepreneurs for
the selection of the business idea on the basis of which KNH Advertising Agency would be
established had taken this particular aspect of business idea selection into consideration. For
instance, marketing is one of the most important business functions that almost all the business
corporations had to use for the adequate promotion or for that matter the advertisement of the
products or the services offered by them.
More importantly, the business sector of the nation of Saudi Arabia had shown signs of
extensive growth which is likely to continue in the future as well and also the number of
entrepreneurial business ventures that are being established within the concerned nation had
increased exponentially. It is very obviously that these corporations would have to take the help
of marketing or advertisement agencies which would help them with the marketing or the
advertisement of the products or the services and in the absence of any effective corporations
within the concerned nation offering the same they would have to use the services offered by
KNH Advertising Agency. This in turn ensures the future growth or the long-term growth of the
entrepreneurial business venture under discussion here.
3.0 Company Description
3.1 Company History
The name of the entrepreneurial business venture which the entrepreneurs, Khalid
Alameer, Namad Alshetawi and Naif Alsfayan, intend to establish is “KNH Advertising
Agency” and the logo of the venture is highlighted by the below given figure-