SBCOM - Professional-Business-Plan
SBCOM - Professional-Business-Plan
SBCOM - Professional-Business-Plan
Confidentiality
This document is only to be issued following the receipt of the Non Disclosure
Agreement (NDA). This document may not be disclosed to any third party without
the prior written authorisation by “SBCOM” Limited. This document may only be
disclosed to your officers and professional advisers on condition that they too
agree to be bound by the terms of the NDA.
Potential acquirers, investors or lenders must conduct their own reviews and
satisfy themselves in terms of the Business and its prospects for the future. The
Directors accept no liability for any loss or damage whatsoever which may occur as
a result of reliance on the information in this document.
Questions and requests for further information regarding the Business should be
made in strictest confidence to:
URSU BORIS
Managing
Director
“SBCOM” Limited
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“SBCOM” Limited – Business Plan
“SBCOM”LTD
Business Plan
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“SBCOM” Limited – Business Plan
A. EXECUTIVE SUMMARY
“SBCOM” Limited is a construction of commercial buildings company with a focus on high
levels of projects customer support based in High Wycombe, England. It is managed by its
one founding directors and has an annual turnover of just under £1mil, a customer base of
around 100 customers and a team of 1 employees. It is growing its revenue slightly above
the industry average and exceeds industry best practice KPIs
The Construction market in the UK is set to grow by 11.5% CAGR over the next 5 years from a
base of £746m in 2008. This growth being driven to by factors that fit well with the economic
climate
– cost reduction, increased efficiency, scalability and flexibility. In addition, the Construction
market is populated with a wide range of similar product offerings often only differentiated by
relatively small technical variables. Being competitive in this market relies on adding value by
additional or peripheral services such as high level of consultation, design, maintenance,
installation.
The opportunity for “SBCOM” lies in providing value-added services that deliver cost
reduction, increased efficiency, scalability and flexibility.
“SBCOM” has a product range to compete with the best providers with ready-to-go server
systems through to highly complex solutions. It is the leading supplier of Skanska in the UK
and is a Construction Partner. In addition “SBCOM” already positions itself in the market as a
providing significant added value through its service levels. It provides a superior level of
hand-holding and installation support that differentiates itself from other construction
providers.
“SBCOM” is well positioned to convert this opportunity into significant growth with its existing
product range and high service levels but has identified a need to increase its market visibility.
It has therefore created a plan to develop its sales and marketing structure which will
capitalise on this opportunity and double its revenue over the next three years. Core to this
plan is investment in three target growth areas with low cost of sale that provide low risk and
potential high return. This will increase its currently low visibility with its customers and in the
market place, develop new sales channels and increase large customer sales.
With 75% of revenue currently generated through solid and predictable monthly recurring
business, and cash providing 4x cover of its monthly overheads the company is in a stable
financial position. It is able to support its growth plans with its current borrowing and need to
anticipate further loan.
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“SBCOM” Limited – Business Plan
B) BACKGROUND
“SBCOM” Limited is a middle tier construction company based in High Wycombe, England, with an
annual turnover of £780k in the full year to April 2023. It was established 10 years ago to provide
consultation, design, maintenance, installation services
The Company has a client base of around 100 small, medium and large businesses
operating both internationally and in the UK that include Skanska, Mace Group, Kier
Group PLC, Balfour Beatty PLC.
Clients are served by agency staff who provide a 24/7 managed service environment
and a range of expertise that includes Linux, MySQL Server, Cisco & Jupiter
Networks, HP and Dell storage, IIS and Apache Servers, SAP, PHP, Ajax and .NET.
The Company is run by Managing Director Ursu Boris, who has over 20 years of Construction
industry experience, who has guided the growth of the company as Financial and Administrative
Director.
To date the company has been funded by a mixture of loan and equity finance secured by
the current directors of the company.
The company is in a stable financial position with good recurring business but has yet to reach
its full market potential. With the experience of the current directors and operations team and
the recruitment of experiences sales and marketing personnel it has developed a growth plan
that will see its revenue double over the next three years to around £3 mil.
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“SBCOM” Limited – Business Plan
“SBCOM” positions itself in the market as a providing significant added value through its
service levels. It does not aim to compete on price with its larger competitors but instead
provides a superior level of hand-holding and management support that differentiates itself
from other construction providers. It is from this added value that it gains a sustainable
competitive advantage over other mid-size and large competitors.
“SBCOM”s customer list numbers over 200 made up of a mix of small, medium and large
businesses operating internationally as well as within the UK. Existing construction contracts
are split between 3 large very profitable customers that will account for around 25% of sales
in 2020/21 and medium and small customers that will account for the remaining 75% of
sales.
85% of Sales revenue is generated predominantly from core installation services and fees
collected by monthly invoicing. Other services design for the remaining 15% of sales are
invoiced upon delivery on standard 30-day terms also.
75% of sales are currently generated through solid and predictable recurring repeat business.
The remaining 25% of sales is generated through new business sales. The “ SBCOM” web- site,
which has recently been re-designed to focus on core business offerings and ready-to-go
solutions, acts as a sales channel and generates around 15% of new business annually. New
business sales from existing customer referrals account for the remaining 10% of sales. Where
new proposals for larger customers are required the Managing Director is responsible for the
sales process and for developing client proposals.
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“SBCOM” Limited – Business Plan
At present “SBCOM” does not have any protectable intellectual property, trademarks or
exclusive agreements in place.
Of the Global market the Banking, Financial Services & Insurance (BFSI) sector was the
biggest spender on construction services with $4,758.9 million or 21.9 percent of the
market in 2007. Manufacturing and services sectors spent $3,960.4 million and $2,261.2
million, accounting for 18.2 percent and 10.4 percent of the total market, respectively.
1
Exchange Rate used : £1 = $1.78607
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“SBCOM” Limited – Business Plan
Some basic distinctions can be drawn between companies by a review of their work on web-
sites. Whilst other companies use similar format to deliver the services the market focus
may vary. At a product level one such distinction is between consumer and business
services. Within the business services sector a further one is between non-managed and
managed services.
Despite these distinctions it is often the case that mid-size and large companies compete
across these categories. Mid-size and small companies therefore may often find themselves
competing with larger companies able to secure significant economies of scale. Being
competitive may therefore relies on adding value by additional or peripheral services such
as consultancy and high levels of installation service.
Over the past few years the construction market has seen consolidation and it is anticipated that
this will continue.
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“SBCOM” Limited – Business Plan
Market Growth
According to TechNavio, the global market for construction services3 is forecast to grow from
$21,746.0 million in 2017 to $31,294.0 million in 2020, growing at a CAGR of 12.9 percent
over the forecast period.
The EMEA market is estimated to reach $9,357.1 million in 2020, growing at a CAGR of 11.5
percent.4 The UK can realistically expect to grow in line with this and grow to around $1,850m
by 2020
For the largest five vertical markets there are a number of common drivers – cost
reduction, efficiency, scalability and flexibility.
Cost reduction is being sought by migrating customers to low-cost channels like e-services or
CRM, offering pay-as-you-go functionality, reducing up front expenditure/investment and
lower training costs.
The benefits of increasing efficiency through management projects are seen as reducing
the wastage of time, expense and business disruption, improved resilience, availability of
expert staff, fast implementation, and lower maintenance.
Scalability and flexibility benefits are seen as stemming from the choice of different
designs and architectures, instant upgrades, accessibility anywhere any time, reduced
incremental costs of new solutions, and ease of installation.
Technically focused solutions such as Virtual Private construction also provide clear
opportunities for cost reduction, Scalability and Flexibility and have a very good future market
potential.
A detailed breakdown of the vertical sector drivers and potential matching of hosted services
to meet that demand is at Appendix A.
3
Technavio Insights – Hosting Services Technology Report – July 2008
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“SBCOM” Limited – Business Plan
“SBCOM” has assumed a CAGR growth rate of 10% in the UK construction market over the
next 5 years which is below that suggested by the latest industry research (2008 5) of 11.5%.
It has also written in a cumulative attrition rate into its revenue estimates through to early
2020 equivalent to about 1.25% (one and one quarter percent) of forecasted revenue. In
addition it has accounted for bad debts at 0.5% (one half of one percent) of total forecasted
sales revenue.
Market opportunities highlighted above coincide substantially with the potential impact on the
market of a downturn – price sensitivity and the seeking for alternative and flexible solutions
that allow customers to scale up and down as required. The downturn therefore go to
emphasise these opportunities and is likely to increase competitiveness in these areas. With
this in mind the provision of additional value to existing and potential customers through low-
cost/no-cost services such as cost management packages, disaster recovery and off-site back
up will help to improve competitive positioning.
5
Technavio Insights – Hosting Services Technology Report – July 2008
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With its limited sales capacity the company has seen limited growth in 2019/20 as a result of
the focus by the Managing Director on acquisition negotiations. As such the company has a
limited new business pipeline. However, “SBCOM” has significant potential to increase revenue
by actively marketing its services.
The company has taken steps to overcome the previous limitations of its structure by
recruiting extra sales and marketing resource. “SBCOM” has engaged a marketing consultant
who will provide weekly input into the development and implementation of “SBCOM’’s new
marketing strategy. In addition, is in the process of appointing an experienced Interim Sales
Manager to develop Direct Sales and build a clear sales pipeline for the business. The sales
Manager will be supported by the Managing Director. This position will be recruited as a full-
time permanent position within the next 24 months.
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“SBCOM” Limited – Business Plan
To address the wide range of product offerings and companies in the sector a number of
“20” installation rankings are maintained. These try to cut through the complexity and
frequently changing market offerings to provide a hierarchy of providers in various product
areas as well as a simple ranking of top providers. This goes some way to giving the
inexperienced buyer a reference point in this fast changing market.
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“SBCOM” Limited – Business Plan
Total
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“SBCOM” Limited – Business Plan
G) COMPETITION
The Construction market is populated with a wide range of similar product offerings that are
often only differentiated by relatively small technical variables. In this sense “SBCOM competes
with a broad range of construction providers for its core services.
“SBCOM” adds most value to its customers through installation expertise and support. It is this
– rather than price - on which it bases its service differentiation.
a) Financial Data
An overview of the financial Data for UK Internet Service Providers 6 shows “SBCOM” growing
its turnover in line with the industry average in 2019 and 2020 and slightly above the
industry average in 2021.
“SBCOM” shows a better than industry average gross and operating profit. However, despite
the fact that the industry averages exclude unusually high or low figures (i.e. plus or minus
two standard deviations from the mean) they include multinational companies with a diverse
product set (e.g. BT). Therefore care must be taken in viewing this as anything other than a
general indicator.
Results seem to indicate the ability of construction solution providers to maintain margins
within the market whilst scaling up.
b) Web-based data
On a simple Google search for the “SBCOM” product range it is clear that large, medium and
small companies (including resellers) provide competition fore “ SBCOM”. It is also clear that
from a simple price comparison “SBCOM” pricing is comparatively high for similar generic
offerings based on its higher service levels.
Perhaps because of the similar technological structure of construction companies, and the
struggle to differentiate, the definition of a product may vary substantially from one provider
to another. For example, whilst a installation product can be compared at a top level the
number of variables in server specification and service that delivers this type of product allows
companies to differentiate their offer.
6
Best Practice - Calculated using the data for companies that are both financially strong and have been
consistently profitable over previous years. Irregardless of size some companies are quite simply better
managed or better placed to take advantage of industry changes than others so these averages show the
potential for firms within this sector.
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“SBCOM” Limited – Business Plan
However, at the supply end of the construction market where “ SBCOM” has established itself,
higher management expertise and investment in a secure construction infrastructure and
customer acquisition would be necessary. With these taken into account a total investment
in the order of £2m-£4m would meet the requirements of a mid-sized construction company
like “SBCOM”. Speed to market for a new company in this area would be in the region of 12-
16 months. Thus, company wishing to go further by establishing its own data centre the cost
of market entry would be further increased and the timescale limited by constraint of power
availability.
Customer Retention
Whilst there is a relatively low cost of switching for customers in financial terms the “hassle”
factor of switching from one provider to another can be significant in preventing a change of
supplier. Interruption of email, exchange and sales related services resulting in business
interruption at some level can provide a significant deterrent.
Competitive Threat
Whilst there is a constant competitive threat in a market that is fluid and changing the forecast
growth in the market would seem to indicate that “SBCOM” is well positioned to defend its position
and capitalise on this growth potential. It seems more likely that any “threat” to the business will
come from a competitor within the construction services market which wishes to gain “SBCOM”s
high value customers or alternatively a company with an emerging application, product or
technology who wishes to secure a launch platform and route to market.
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I) FINANCIAL INFORMATION
The directors have given personal guarantees by way of deed of priority over their
private residence in favour of the company’s bankers in order to provide loan security.
Shareholding
Shareholding
Shareholder Share ClassShares
%
Ursu
Boris
By virtue of their owning 100% of the ordinary share capital, Boris control the company jointly.
No approved or unapproved share option scheme is in place.
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Appendix A – Vertical Sector Growth Drivers
Manufacturing Cost reduction, fees based on a specific functionality and Enterprise Resource
capacity to use depending on individual requirements Planning (ERP)
Higher business value benefits, faster and at reduced costs
than a purchased solution Manufacturing Execution
Reducing the wastage of time, expense and business Systems (MES)
disruption associated with in-house applications
No upfront expenditure on licenses, maintenance contracts Supply Chain Management
and new staff (SCM)
Scalability
Availability of industry-specific functionality that best meets
a company’s needs
Availability of expert staff to address issues
Advantage of security and risk-mitigation capabilities
Services Pay only for the functions used (Pay-As-You-Go) Constructions solutions
Reduced training Costs - using the internet as
Access to the latest technology without installation an application platform
Investment
Increase efficiency and cost savings
Access to applications for a fraction of the cost
Quick implementation process and lower maintenance
responsibilities
Instantaneous upgrades based on necessity for software
products
Unprecedented reach and flexibility to access from anywhere,
anytime
Government Choice of different design and architectures Reduce the e-governance solutions
incremental cost for implementation of new
solutions as well as the time needed for design and development
Improved cost efficiencies for improved ROI
Provides a lower-cost option that eliminates traditional
investment, setup, and maintenance hurdles
Designed to meet the requirements, budgets and needs of
individual agency or a large organization
Scalability & Flexibility
Availability on a monthly subscription fee basis
Access securely anytime, anywhere, from any computer with
internet access
Lower total cost of ownership
Communications Projects to offer services that drive subscriber growth and Web-based back-office
profitability to meet the challenge of creating new revenue applications such as billing,
opportunities mediation, rating and
Tailored, industry-specific solutions to solve business subscriber management
challenges
Cost effective solutions, with managed servers and updates Web-based client-facing
projects platform to offer advanced services applications such as call
Complexity in upgrading legacy systems centre and customer
Ease of switching - Facility to switch solutions easily relationship applications
Efficient back up and security (CRM)
Anytime, anywhere accessibility