ACME Consulting Investor Opinion

Group: Olga Bogitova Elena Grebenkova Ekaterina Karpova Elena Khvaleva Anastasiia Kliuchereva Leonardo Nevicati Valeria Rastorgueva Dario Viscardi Darya Vlasova

Business plan structure disadvantages

No clear structure  Executive summary section must include Management subsection. For a start-up company especially it is important to represent its founder, his professional background and achievements, ability to manage the company  Figures are not supported by factual information. For example, optimistic sales forecast of 200% growth in 3 years  Excessive information, repetitions create confusion


Marketing plan gaps

 

Target market is difficult to be reached (Apple, HP, IBM, Microsoft...). It is not clear what particular advantages the company has to compete on the market. The most significant competition is no consulting at all controversial statement meaning if there is a necessity of such consulting, when the biggest high-tech companies deal with this issue for ages and have their special base, department, knowledge and people for it Acme positions as a reliable alternative to the in-house consulting. But how it comes together with pricing strategy? 5000$ for the project consulting is it an alternative to the in-house? It is risky to concentrate on a worldwide area: US, Europe and Latin America especially concerning the fact, that dealing with US and European clients must be based on absolutely different strategies, which ACME was supposed to justify. Promotion methods (brochures, mailings) suggested do not seem to be very effective. Advertising expenses planned are very high 6% to 4% comparing to industry profile 1.2%.

Financial plan weaknesses

 

No investment ratios: IRR, NPV, ROI and pay-back If we count ROI=18%, accumulated annual profit for venture capital projects should be at least 30-40% Acme is going to accumulate 180.000$ of debt by the third year. The cumulated cash flow is going to be 360.000$. Is not it a too large debt burden for a start-up company? Net cash flow for the 1st year equals only $14000. Net worth will be equal 141.000$ by the end of the 3d year which is not a lot considering initial investment of 50.000$

Investors' decision
Taking into consideration all the factors mentioned above we decided to reject the project. We may consider a project on the condition that the business plan is modified.