UAE Freelancer House’s Business Plan

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Executive Summary

Freelancer House is a business idea that needs to be implemented in the city of Dubai. The United Arab Emirates’ business community is embracing the concept of outsourcing human capital instead of having numerous employees hired on a permanent basis. Under this context, it becomes necessary for these companies to have reliable platforms where they can get qualified individuals to fill various vacancies or to help in undertaking given projects. Freelancer House will be an online-based firm that will bring together job seekers and companies. The firm will charge both job seekers and companies some fee. It will also boost its income by allowing companies to advertise in its website.

Industry, Target Customer, and Competitor Analysis

The freelance industry in the United Arab Emirates has experienced massive growth over the years due to emergence of freelance companies such as Elance o-Desk. The number of companies offering freelance services is still relatively few because the concept of freelancing is yet to become popular in the country. However, many firms are now finding it easy and relatively cheap to hire employees who work as freelancers instead of having permanent employees. According to Shelton, freelancing has become very popular in the Western countries, and it is spreading very fast to the other parts of the world (78). This industry has three primary groups of target customers.

The first group of target customers has the companies looking for people to work for them. Companies are willing to pay the freelance company some fee for enabling them to get highly qualified workforce who can undertake various complex tasks. The second group of target customers has the employees themselves. They are always expected to pay some commission every time they are successfully linked to a company that needs their services. The third group of target customers has the advertisers. In 2007 alone, companies in the United Arab Emirates spent over $ 1.3 billion on advertisement (Covello and Hazelgren 56). Companies in this industry have a share of this advertisement money because firms will be using their websites to advertise their products.

Currently, the main competitor in this market is o-Desk and Nabbesh which have been able to attract a considerable market share in this region. These two firms have also developed trust with job seekers, companies looking for employees, and advertisers. Other top freelance companies which have just made an entry into this industry include Toptal, Freelancer, Craiglist, Guru, and Freelance Writing Gigs (McKeever 85). Currently, the industry rivalry rate is relatively low. However, this may change in a near future due to entrance of many other freelance companies into the local market.

Company Description

Freelancer House is a new company that is yet to start its operations. The firm will be based in United Arab Emirates’ city of Dubai. The primary objective of the firm will be to successfully link professionals in various fields with companies that need their services. The project is still at the idea stage, so it has no history other than the development of the idea. Once the first starts operation, ownership may change as the entrepreneur will be looking for investors to partner with as a way of expanding operations.

So far the biggest achievement has been the development of the idea to make it practical and implementable. The competence of this firm is networking. The entrepreneur intends to use the networking skills to link job seekers and companies in a business context. Freelancer House will primarily be offering services. To the companies, they are offered highly skilled and dedicated personnel. To the job seekers, this firm will be offering them projects that will earn them attractive income. To the advertisers, this firm will be offering them an opportunity to reach out to a wide range of people across the world.

The economic state of the industry is projected to grow considerably in the near future. More companies in Dubai and the country at large are finding it more convenient to use freelancers instead of having permanent employees. This means that money flowing into this industry is poised to increase. Currently, the plan is to run the firm as a sole proprietorship. In case the entrepreneur finds investors willing to be part of this project, then the entrepreneur will sell to them a percentage of the shares of this firm, creating co-ownership.

Service Plan

According to a research by Pinson, the United Arab Emirates has some of the best and well equipped colleges in the region that have been producing highly competent graduates for the last few years (41). However, these highly skilled graduates have faced a major problem of getting the job of their dreams. The country has also experienced influx of talented individuals coming from other countries to look for jobs in cities such as Dubai. Many companies are redesigning their human resource systems. Outsourcing is increasingly becoming popular among the local firms.

The services of this firm are designed to meet these needs. Freelancer House will offer job seekers and companies a platform where they can interact and develop business relationship. The marketing manager will look for available job opportunities from various companies in Dubai and post them in its website. Potential employees interested in the advertised positions will contact the HR director at Freelancer House so that they can be linked with the employer. This firm will also be offering advertisement services to companies within Dubai.

Marketing Plan

The services that will be offered by Freelancer House will be of great benefit to the users. To the job seekers, they will no longer have to make numerous job applications as they used to do before. All they need to do is to visit the website and view available job opportunities whose requirements match their qualifications. To the employers, it may no longer be necessary for them to spend a lot of resources advertising vacancies in the newspapers or other media platforms. All they need to do is to contact this firm and state the qualifications they need. The market that exists is both organizational and consumer based. The companies are organizational clients, while job seekers fall under consumer market.

Freelancer House will be getting into an industry that has well established players. Firms such as o-Desk have been in this business for a very long time hence they understand what it takes to achieve success. This new company will, therefore, have to employ effective marketing strategies to enable it gain competitive edge over its market rivals. This firm will offer superior benefits to its clients compared with what other competitors offer in the market. It will also use advertisements on mass and social media to promote its brand awareness in the market. The entrepreneur also intends to promote relationship marketing as a way of gaining popularity in the market.

Operations and Development Plan

According to Abrams, operating in the service industry is relatively different from operating in the commodities market (63). Freelancer House is getting into an industry that is relatively new in the United Arab Emirates. A firm that links employers and employees is a business concept that needs to be clearly defined in order to determine how the products will be delivered and how profits will be made. Unlike in other industries where the supply chain from the supplier to the firm and finally to the consumers is clear, in this case some of the suppliers double up as the consumers. The marketing manager will be primarily involved with looking for job opportunities in the city of Dubai.

Human resource manager on the other hand, will be responsible for vetting the applicants to select the most qualified candidates for various positions available in various firms (Lee 78). In this case, the companies hiring the new employees presented to them by Freelancer House will the suppliers and consumers at the same time. They will be supplying job opportunities needed by the job seekers enrolled by this firm. They will also be consuming the services provided for by the firm. Once the company has been provided with the right workforce, it will be required to pay Freelancer House 2% of the cost of the project the employee will undertake within the first one month. The employee will also be expected to pay Freelancer House 10 AED for registration on a yearly basis. Advertisers will be charged a certain fee for using this firm’s website to reach out to the intended audience. The fee will vary based on the space covered and the frequency of the advert on this firm’s website.

Management Team

In order to achieve success, this firm will need an effective management team that will be capable of overcoming challenges expected in the market when this firm will start its operations. The management team will be responsible for various tasks, including sourcing for job opportunities, scrutinizing the employees to determine their suitability for various positions, managing the finances of the firm, and planning for the expansion programs. The figure below shows the firm’s planned form of organization.

At the top of the management structure will be the chief executive officer. He will have a team of three directors in charge of marketing, human resource, and finance. These top managers will work closely with the legal advisor of the firm who will be a part time employee of the firm.

Critical Risks

For every investment venture, Stutely says that it is always imperative to identify critical risks that an investor may encounter (45). This helps in planning how such risks can either be eliminated or their impact minimized. Failure to be paid by the clients is one of the main risks that this firm may face once it starts its operations. The operations of the firm will heavily rely on the payments made by the clients. However, some may decide not to pay. If the numbers of those who fail to pay are high, then operations of the firm may be unsustainable.

There is also another risk of hiring unqualified individuals who lack the skills needed by the employer. Some unscrupulous individuals have learnt how to forge documents to get jobs. In case they fail to deliver the expected quality of work, then the employer may lose trust with this firm. There is also the risk of failing to get the needed employee at the right time. Some of the employers may need to fill a given vacancy urgently and may rely on this firm to help it get employees within the shortest time possible. However, it may not be very easy to reach out to some of these potential employees within the required time.

Offering

This project will be initiated with a small investment, given that most of the operations will be done online. The investor will need to contribute AED 950,000 into this project. The investment will be spent very wisely. The chief executive officer and his three executives will need 4 laptops that will cost AED 11,996. Another AED 4,500 will be needed to develop an interactive website that will enable this firm to communicate with all its clients. Given that this is a new firm, the executives will earn an average of AED 12,000 per month per individual. The cost of salaries for all the employees is estimated to be AED 960,000. The rent for the office and other related costs will be AED 25,000. Other miscellaneous expenses are estimated to be AED 20,000.

Exit Strategy

It is important to be realistic when developing a business plan. It is important to appreciate that sometimes it may be necessary to make an exit as a strategy that will protect the firm from continued loss. In this business, the intention is to continue operations for the first six months irrespective of the rates of profitability. In the seventh month, this business should be self sustaining even if it does not provide the expected profits. It should be able to support all its operations without needing any support from the investor. If this is not achieved, then the firm will exit from the market.

Financial Plan

Freelancer House is yet to make an entry into the market, so its financials will be primarily based on assumptions. The main financial assumption is that this firm will achieve financial freedom within its first six months of operation. It will also be assumed that the sales of the firm will increase consistently while the cost of production will be manageable. Another major assumption is that tax rates will not change significantly during the five year period.

Table 1: Five Year Pro-Forma Income Statement

Freelancer House Corporation
	Five Year Pro Forma Income Statement
	2016	2017	2018	2019	2020
Sales	1,265,000	1,454,750	1,672,962.50	1,923,906.88	2,212,492.91
Cost of Goods Sold	460,700	552,805	635,725.75	731,064.61	840,747.30
Operating Income	764,300	901,945	1,037,236.75	1,192,822.28	1,371,745.60
Expenses
Administrative	253,000	290,950	334,592.50	364,781.38	442,496.58
Marketing	316,250	363,887	418,240.63	480,976.72	553,123.23
Total expenses	569,250	654,637	752,833.13	865,758.09	995,621.81
Earnings before tax	215,050	247,307	284,403.63	327,064.17	376,123.78
Taxes	77,418	89,030	102,385.31	117,743.10	135,404.57
Net income	137,632	158,276	182,018.32	209,321.07	240,719.23

Based on the financial assumptions, it is expected that the pro forma statement for Freelancer House will be as shown in the table above for the next five years starting from 2016.

Works Cited

Abrams, Rhonda. The Successful Business Plan: Secrets & Strategies. Palo Alto: The Planning Shop, 2003. Print.

Covello, Joseph, and Brian Hazelgren. The Complete Book of Business Plans: Simple Steps to Writing Powerful Business Plans. Naperville: Sourcebooks, 2012. Print.

Lee, Jennifer. The Right-Brain Business Plan: A Creative, Visual Map for Success. Novato: New World Library, 2011. Print.

McKeever, Mike. How to Write a Business Plan. Hoboken: John Wiley & Sons , 2015. Print.

Pinson, Linda. Anatomy of a Business Plan: A Step-by-Step Guide to Building the Business and Securing Your Company’s Future. Tustin: Out of Your Mind & into the Marketplace, 2008. Print.

Shelton, Hal. The Secrets to Writing a Successful Business Plan: A Pro Shares a Step-by-Step Guide to Creating a Plan That Gets Results. , 2013. Print.

Stutely, Richard. The Definitive Business Plan: The Fast-Track to Intelligent Business Planning for Executives and Entrepreneurs. Harlow: Financial Times Prentice Hall, 2001. Print.

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