the plan for XYZ design studio

Kelvin Theseira Singapore. March 28, 2007 1.0 Executive Summary

1.1 Objectives and Goals 1.2 Mission 1.3 Key to Success 2.0 Company Summary 2.1 Company Ownership 2.2 Company Start-up Plan 2.3 Company Locations and Facilities 3.0 Products and Services 3.2 Competitive Comparison 3.3 Future Products and Services 4.0 Market Analysis Summary 4.1 Market Needs 4.2 Market Trends 4.3 Market Growth 4.4 Industry Analysis 4.4.1 Industry Participants 4.4.2 Main Competitors 5.0 Marketing Strategy 5.1 Positioning Statements 5.2 Pricing Strategy 5.3 Promotion Strategy 5.4 Marketing Programs 5.5 Sales Strategy 5.5.1 Sales Forecast 5.5.2 Sales Programs 6.0 Management Summary 6.1 Organizational Structure 6.2 Management Team 7.0 Financial Plan 7.1 Important Assumptions 7.2 Key Financial Indicators 7.3 Break-even Analysis 7.4 Projected Profit and Loss 7.5 Projected Cash Flow 7.6 Projected Balance Sheet 7.7 Business Ratios 7.8 Long-term Plan

1.0 EXECUTIVE SUMARRY XYZ design studio will a company incorporated in Singapore, owned and operated by VHQ Post Singapore and targeted to be an enterprise by November 2007. XYZ plans to seek appropriate office space in Singapore, close to VHQ Post. The following business plan acts as a guide for the setting up, operating and managing of this new entity which will provide a host of new services to the advertising industry. XYZ will be a new company that will be based in Singapore. Its core service offering will be to design and produce motion graphics for full motion electronic media as well as expand its design services into other mediums that include print, interactive, packaging and interior design. The main services that will be provided include : Identity Design (Broadcast, Corporate, Internet & Print applications) Network/Channel Launch and redesign Title Design and Animation Program, News, Sports and Entertainment Packaging Commercial and Image Campaigns Program Promotion and logo design

With this core service offering, XYZ believes that it will provide for a more integrated advertising and promotion solutions as well as services and products that compete on value base platform rather than pricing strategy.

1.1 Objective and Goals To provide a written guide for starting and managing this design studio; a strategic framework for developing a comprehensive tactical marketing plan, with the intended audience being VHQ Singapore. This plan is not intended to obtain financing from any outside sources. A profit orientated plan base on the core service offerings that will be scalable at a manageable rate. To grow the business at a rate that is both challenging and manageable, leading the market with innovation and adaptability. To have the design studio set up, production services available and running by NOV 2007. To launce the grand opening of XYZ Design Studio with a regional talent search contest and build an Internationally awarded design firm by year end 2008. Developing a market- driven organization and create a quality-centered organisational culture. Building Value in the company by investing in people and providing for inspirational working environment. To generate sufficient profit to finance future growth and to provide the resources needed to achieve other future objectives of the company determined by its owner.

1.2 Mission To provide XYZ core service offering solutions and reliable technical assistance to small and medium enterprises within the advertising industry, with the intention of helping these SMES set themselves apart from the competition through innovative design and production services across a range of media, leveraging with an uncommon facility for strategic brand marketing. Mission Statement :to make this world a beautiful place through design, by cultivating and advancing broader exploration and creativity in full-motion electronic media

1.3 Key to Success Marketing, Networking, Responsiveness, Quality, and Generating Repeat Customers will be a key focus for XYZ success. The initial primary service offered will be based on an hourly rate for technical aid with a view towards a retainer based contract for longer term projects for a profit based growth. Establishment of a one stop shop thus creating a more efficient and costeffective solution for SMES with a cohesive and coherent message for their business. Investing in quality staff as well as developing staff to achieve objectives and goals, through workshops and award shows - A non- traditional marketing plan.

3.0 PRODUCTS AND SERVICES To design motion graphics for all forms of digital media To provide production support to execute these designs. To extend our design services to other area of advertising namely, - Communications ~ print, illustration, interactive. - Packaging design - Environment ~ urban design, interior design. - Cross-disciplinary ~ a combination of different design, disciplines, where setting new ground is the norm.

3.1 Competitive Comparison Strengths - Affiliation to VHQ. - High quality work and experience - One Stop Creativity center - work directly with the design/creative team. - A new type of creative services (a combination of advertising services, design firm and production house) Weaknesses - Lack of market presence new set up.. - Offering too many design disciplines agencies and clients will not know how to view XYZ. Opportunities - A growing market as clients see the importance of building services and products that compete on value rather than price. - To expand and develop into different design fields - To extend our product design into a retail business - start-up cost of actual business is manageable, making it seem like an easy business to set-up and establish. Threats - competition from established players in the market. - price comparison XYZ may be seen to be too expensive

3.2 Future Products and Services Develop content for electronic media for both traditional and nontraditional (mobile TV, web content, event screens, television stations) Develop new marketing tools (www.serious.com) Developing products for retail

4.0 MARKET ANALYSIS SUMMARY More interactive and affordable products in the design industry has created a very competitive market place. To stand out from the crowd, XYZ would have to rely strongly on creative solution it provides as well as the way it strategically manages and markets the company. ZXY believes that this strategic approach will help set a differential pace in this competitive market. Its core service offerings will help businesses connect strongly with their customers by anticipating their real needs. That in turn will give the target client the ability to set themselves apart in increasingly tough national and international markets. Using its products and services to generate new ideas into reality will allow clients to set the pace in their markets and create new opportunities rather than just responding to the competition. The local market for this business, while not new, is wide open for new and expanding consulting firms. An initial financial analysis of the viability of this venture shows outstanding promise and results. Several sources note that the computer consulting business is easy to start, requires little up-front capital, and has the potential to be quite lucrative in today's high tech world. The Asian Federation of Advertising Associations (AFAA) expects Asian advertising expenditure (adex) to grow 10% this year. As Asia is currently the dynamic leader in economic growth globally, the advertising industry in the region is quite active and promising compared with other parts of the world. In the past Japan, South Korea, Hong Kong and Malaysia used to be leaders in the advertising industry. Today, India and China are leading the market. The co-operation of players in the advertising industry, especially in the areas of technology and creativity, would help Asia continue to lead in this economic growth. Below the line or unconventional media market such as promotions through sports events, advertising via the new electronic media, including mobile equipment and the Internet, is rapidly expanding across Asia. In Singapore, advertisers jostling for a slice of the consumer spending pie spent a total $1.94 billion on advertisements last year, reversing a decline in adspend the year before. Big brands from Sony and Nokia to Kentucky Fried Chicken and Tiger Beer were out in force last year, increasing their advertising budgets across most media, the latest figures from Nielsen Media Research showed. Total adspend in Singapore rose 4 per cent last year, compared with an 8.3 per cent drop in 2005. The increase in adspend is in line with the buoyant Singapore economy, which grew 7.9 per cent last year.

This year, Singapore's advertising industry should continue to grow as the outlook for the local economy continues to be favorable. Nielsen's annual survey of the local advertising industry found that eight of the top 10 advertiser categories increased their spending last year. Television & newspapers took a 39 per cent share of the advertising market, as spending on television and newspaper ads rose 5.5 per cent and 3.3 per cent respectively. Adspend for magazines, posters and bus/taxi-tops also rose last year, but spending on radio and cinema ads declined. For the television industry, ads for alcoholic beverages and electrical household appliances saw the biggest growth last year, Nielsen found. 2006 has been a field day for TV in terms of beer advertising, with major campaigns airing around the World Cup months last year. Tiger and Carlsberg, for instance, more than doubled their adspend for all media last year to $10.4 million and $10.1 million respectively. 2.3 Company Location and Facilities Singapore offers many benefits to the company: A close association with the parent company, VHQ Singapore Singapore is the regional hub-of-choice for many global brands. Voted the most IP-protective country in Asia by the Political and Economic Research Consultancy for the last two years, Singapore is well-poised to aid companies in protecting, managing and commercializing their assets in Asia. Through the designSingapore, the government is constantly pushing for Singapore to become the design hub of Asia, creating a conducive environment to develop design based new business. With an encouraging push from the government, numerous design schools have also sprung up creating a thriving creative talent pool.

4.2 Market Trends With more interactive and affordable products, the trend in post production and design is geared to return of power into the hands of the creative. As the market gets filled with more generic products one way to set it apart is design. Clients again are looking to further extend the experience of their products in other forms in different media.

4.4 Industry Analysis There are 5600 design companies in Singapore. (but none offer full motion graphics design with production services) There is an average of 22 employees in design companies There is an average of 6 designers per design company Design companies average SIN $2.3M in revenue per annum Design companies forecast an annual growth of 25% over the next three years (data from Singapore Council survey done in 2005)

Institutions offering design degrees courses in Singapore (creating a ever growing talent pool) are : National University of Singapore Nanyang Technological University LASALLE-SIA Collage of Arts Nanyang Academy of fine arts Raffles Design Institute

The Competition within Singapore design market is substantial, but limited to a few specific players that are clearly identified. 4.4.1 Industry Players 1. Blackmagic Design - Specializing in commercials, high definition documentaries, television series, feature film finishing and DI, Blackmagic Design has earned a reputation for working in creative partnership with their clients. Blackmagic Design's Singapore Post Production Company is part of the world leading post production equipment manufacturer, Blackmagic Design Inc. http://www.blackmagic-design.com/production/company 2. pHUNK Studios establish now for 13 years and extensive range of work from motion graphics on MTV to exhibition spaces in design festivals in Tokyo. Will be holding two exhibitions, April in an art exhibition in Cologne and July a solo exhibition in Taiwan http://www.phunkstudio.com 3. Asylum A design firm and retail space located at Ann Siang Hill. A nine member outfit. Work on a range of prominent projects including the interiors of alfresco bar Loof, work for Microsoft and Nike. http://theasylum.com.sg

4. Infinite Frame Works was founded in 1997. Today, its a creative workshop comprising of a full fledged hi- Definition (HD) post-production set-up specializing in TVCs Feature Films, long Form Editing and broadcast design. It also consist of a concept development team focusing on content development for TV and Film. http://www.frameworks.com.sg/ http://www.frameworks-content.com 5. Twisted Post 6. APV 7. In Jakarta

5.0 MARKETING STRATEGY Four main promotion strategies: - networking and referrals through VHQ - web based promotion - traditional media advertising - non-traditional promotions. Working with VHQ and building a volume of outstanding work through existing contacts and customers. To be constantly featured in trade magazines through a long running pubic relations campaign keeping brand awareness high. Participating in regional and local design events and awards show to build reputation. Tie up with a regional TV station or publication to create a media event to look for young up and coming designers.

5.2 - Value Proposition The value proposition offered by XYZ is quite simple: a one-stop shop means a more efficient and cost-effective solution for clients and a cohesive and coherent advertising message for our clients product.

5.3 Competitive Edge XYZ will build on VHQS relationships with current and potential clients. In essence, XYZ has already overcome the barriers to entry in the motion graphics field and for starters the services offered by XYZ will be a value added service offered by VHQ to its existing clients. 5.4 Marketing Plans XYZ design studio will focus on the following to establish and grow the business: For the first year XYZ will maintain a selective strategy as it establishes it self. It will work with VHQs existing clients and build a new set of clients through networking in the Advertising Industry. Through its selective strategy, XYZ Design Studios will ensure an article a month in relevant media placements, keeping brand awareness high by identifying possible PR angles or opportunities to showcase its self. Examples of public relations excises would include participation in Award programs, regional and local design conferences and even articles of the office design in architecture and interior design magazines. After year one , XYZ will run a regional talent search, tying up with a regional stations or publications for a grand opening campaign. As the company grows from strength to strength XYZ will continue this PR program and use it to strengthen its marketing efforts.

6.1 Organization Structure

6.2 Management Team

7.0 Financial Plan

Startup Sumarry Requirements Start-up Expenses Legal Publications/membership Office equipment Computer workstations Software Consultants/ Business plan Insurance Website development/hosting Website Management Expensed Equipment Interior Designer Rent & deposits Stationery Utilities Deposits Other Total Start-up Expenses Start-up Assets Needed Cash Balance on Starting Date Other Current Assets Total Current Assets Long-term Assets Total Assets Total Requirements $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Funding Investment VHQ POST Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Current Liabilities Long-term Liabilities Total Liabilities Loss at Start-up Total Capital Total Capital and Liabilities $ $ $ $ $ $ $ ($) $ $

Resource Requirements: Communications 3 x General Office PC for all day to day communication

SGD 1500 2000/ per excluding software Telephones A full PABX telephone system (old system) or a VoIP Phone system. SGD ???? Facsimile No need for a Fax machine as we are trying to keep to a paperless organization as possible. Computers/ Graphic Workstations 4 x Mac laptop for Office & design work and all presentations outside the office. SGD 4000/per excluding software 1 x Xserver link on a full network of the office. 4 x Production work stations 3 x Mac + 1 x PC, SGD 6000 8000/per excluding software Workstation software - Adobe Creative suite - Macromedia Director - Final Cut Studio - Shake