M+K Agency Business Plan

8/13/2019 M+K Agency Business Plan

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M + KAgency

WILLIAMSBURG

IDEAS TO INNOVATION


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Creativity is an advertisingagencys most valuable asset,

because it is the rarest.- Jef. I Richards


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TABLE OF CONTENTSExecutive Summary 3M+K Agency 5Recruitment

CultureCompany 7

VisionExecutive TeamBoard of Advisors

Target Market 9CustomersNew Business Pitch Process

M+K Agency Services 10Social MediaPrint and Branding DesignPublic Relations

Pricing 11Opportunities Threats 12

CompetitionGrowth Expansion 13

Worst CaseExit StrategyTerms of Agreement 14

Appendix 15Income StatementAssumptions


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Executive SummaryM+K LLC. is an advertising agency built to offer creative solutions for businesses

in the Greater Williamsburg area. Currently the opportunities for College of

William & Mary students to pursue advertising opportunities alongsidecoursework is practically nonexistent. M+K is the answer to this problem.

Founded by a previous W&M Marketing graduate, M+K will function as an Ideas

University. Students will gain real-world experience with account management,

strategic planning or copywriting and art direction. Workshops, networking

functions, guest lectures, and scholarships will be offered to immerse students

for a semester in the advertising trade.

The culture created at M+K is integral to the companys objectives. Students willbe drawn to the atmosphere of team collaboration, total transparency, and

rewards for innovation. Through an exclusive agreement with W&M, M+K will

implement advertising campaigns for local businesses. Students will go through

the process of new business pitching, creating a campaign, and measuring its

reach. The W&M brand, with a marketing program that is ranked #1 nationwide,

will elevate M+Ks position in the market.

M+Ks main sell for its clients is its expertise in social media marketing and

management. The agency workers are all up-to-date on the latest trends offeringa solution to businesses that have trouble with changes in the social sphere.

The market of agencies is fragmented with small consultants who perform

multiple functions or specialize in one niche. M+K will maintain a competitive

edge by offering businesses the option of a short-term commitment and a team

of workers who are replaced each semester to offer a continuous source of new

ideas.

M+K is seeking a loan investment of $220,000 at 10% in order to build workshops

and training programs for the students, create scholarship rewards, and fund new

business pitching through the start-up phase. The full principal will be repaid in

the seventh year of operations.

M+K is providing new opportunities for education advancement for students,

adding further integrity to the W&M Academic Program, and providing local


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businesses with a source of new ideas. Just an idea at first that will soon innovate

advertising in Williamsburg.

Sincerely,

Meghana Indurti

Meghana Indurti

Chief Executive Officer of M+K Agency


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M+K AgencyM+K is an advertising agency fueled by the creative students individually chosen

from The College of William and Mary. It, at first, exists on a virtual space where

freelancers can collaborate together using chat and e-mail programs. M+K offers

marketing services for local clients in the Williamsburg area seeking help withbranding, social media, public relations, and print advertising. After producing

several ideas for a business, instead of wasting the unused ideas, M+K will

recycle and sell them with customization to other businesses.

M+K also functions as an Ideas University for students to gain first-hand

experience with the business of advertising. A group of freelancers are

contracted to work on an account for a semester where they are faced with real-

world client problems. M+K will maintain a lean model by only having two full-

time employees, the two founders, and subcontracting the students.

RecruitmentThe students are hired as freelancers through a competitive application system

that looks at relevant experience, GPA, and courses taken. Diversity of staff is

important and therefore students with skills in Business, Statistics, Art, English,

and other fields of study will be encouraged to apply. Additional elements are

based on the department. Account assistants will need to demonstrate a sales

pitch, strategy hires should have a good knowledge of excel and research

methods, and creatives will submit a portfolio of written works or art.

Depending on the account, there will be 1-2 hires in each of the three

aforementioned departments per account. Juniors and seniors will have

preference but competitive sophomores will also be considered. They will

collaborate together and report back time sheets and progress reports on a bi-

monthly basis or per request by the two founders. They will be billed by an hourly

basis negotiated in the contract. For certain projects, a flat fee option will be

available.

Account executives are responsible for new business searches, pitching, and

communicating with the client throughout the contract. Strategy workers will

focus on understanding the market research, consolidating audience insights,

and creating a marketing plan strategy to execute. Creatives will be responsible

for writing copy, creating graphic designs, editing media, and coming up with

ideas for the new business pitches.


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CultureSince an agency is run by ideas, maintaining a creative atmosphere is important.

Despite the lack of a physical office at first, M+K will engage in routine meetings

and conference calls that embed the company philosophy into the freelancers.Ideas University will remain the core of the culture and the following programs

will be implemented so that the best talent will keep coming back semester after

semester.

Newsletter: Once a week, the two followers will send an e-newsletter withfunny observations about the ad business, recent advertising, and community

events. Contributions can be suggested by anyone on the team.

Rewards: Scholarships and stipends will regularly be awarded to at least threestudents to pursue advertising career prospects and contests across the country.

Workshops and Lectures: Alumni of this program, W&M professors, andother distinguished personnel will be invited to hold conferences and labs

regarding the different fields of advertising and marketing. Key workshops in new

technology or business techniques will be important to stay competitive.

Total Transparency: Frequent virtual and in-person meetings will occur bi-monthly where all the freelancers currently signed on will be in the clear

regarding the agencys outlook and their roles. Updates about individual projects

to other teammates, new business prospects, upcoming training plans, and

managements outlook on financials will create an open air.

Betterment of Society: An important aspect of joining M+K and IdeasUniversity is the non-profit aspect of it. All of the freelancers will choose to

work together for a non-profit or cause of their choice, on or off-campus, and

help with promotion and planning for it. Freelancers are welcome to create their

own initiative or support an existing one. A budget will be provided for each

team. Ideally this creates a collaborative air where connections and learning is

possible from students working on other accounts.


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VisionTo function as a continuously changing agency

of creative students that produces innovative

ideas that solve problems.

Executive TeamChief Executive OfficerMeghana Indurti is a BBA Marketing and Entrepreneurship

graduate of the College of William & Mary. After receiving

her degree, she worked for Leo Burnett as a copywriter andeventually progressed to become the Associate Creative

Director. Meghana is passionate about higher education

and has spent the past few years guest lecturing the

business department at the University of Chicago.

Chief Operations OfficerKennedy Daniela Madriz graduated with degree in BA

Advertising and Finance from the University of North

Carolina, Chapel Hill. She has had her artwork displayed in 4different art galleries in Guatemala City. After spending

several years as an Art Director at Bartle Bogle Hegarty, NY,

she transferred to Leo Burnett to become Creative Director. Daniela has spent

the last couple of years financing and running her own boutique agency in New

York, Madriz Productions.


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Board of AdvisorsRick Spatz Spatz began his 30-year career in advertising with Leo

Burnett, moved to DAarcy, Madiusm and Benton & Bowleswhere he worked with several international accounts. He

worked on strategy and account services for agency clients

such as Proctor & Gamble, Mars Inc, Nestle, Roche,

Cadbury, and Heinz. Currently Rick is the director of the

Executive Partners program at the College of William & Mary where he works

with the entrepreneurship center and the MBA Marketing students.

Richard AshAsh is a professor of Entrepreneurship and executivedirector of the Entrepreneurship center at the College of

William & Mary. Ash previously founded Dilon Technologies,

Inc., a medical device company. He has also contributed to

the success of several venture capital firms. He is an

acclaimed professor for both undergraduate and MBA

students at the College where he has won multiple awards.

Louise Pritchard She is currently the founder and co-owner of Patton

Pritchard Consulting, an advertising agency in theWilliamsburg area. Previously she was Senior Sales Manager

for FORTUNE magazine and was the Director of Marketing

for Holiday Inn Worldwide. She has served as the Director of

Marketing for a childrens hospital for two years. She is a part of the Executive

Partners program at W&M.

Sean FitzpatrickFitzpatrick served a Chief Creative Officer for JWT

advertising agency, Vice President of McCann-EricksonWorld Group, Creative Director of Bing Crosby Productions

and Columbia Pictures. He has won more than 300

international creative awards for his advertising campaigns.

He is a member of The Wall Street Journals Creative Legends Series and has

judged the Cannes International Advertising Film Festival. Currently he is an

adjunct lecturer and Executive Partner at W&M.


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Michael LuchsHe is a professor of Marketing Research at W&M. He is

spearheading the Design Studio concentration and lecture

series at the college. He has acclaimed published researchespecially in the area of sustainability. He has worked as a

consultant for PwC where he worked to improve product

development and marketing performance. He served as a senior Vice President

of Marketing for Labtec Inc. and as a Product Manager for Black & Decker.

Matt MattoxMattox is Vice President and Group Planner for the Martin

Agency in Richmond, Virginia. He is also an adjunct

professor at Virginia Commonwealth University. Hisexpertise is in serving as the conduit between the corporate

goals and the agency creative staff.

Target MarketCustomersThe customers lie in the local Williamsburg and Hampton Roads community. This

area currently holds a variety of small businesses varying from dining services,

education start-ups, entertainment venues, financial services and banks, non-

profits, medical center, and other personal services.

Most of these businesses have a relationship with several local agencies that are

specialized in a particular skill or topic. Prospective clients need a team of

consultants better equipped with social media and brand channel management.

Although clients have social media handles, they are in need of more engaging

and consistent posts.

New Business Pitch ProcessM+K holds a portfolio built through promotional work with College of William

and Marys student clubs and events. Additionally, using connections from the

executive partners, professors, and alumni of the college, cold calls and e-mails

will be necessary to start attracting clients.


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M+K will emphasize three points in the pitch process: relationship with W&M,

continuous employee turnover, and low-cost business model. Having a board of

advisors with professors and executive partners will allow internal promotion of

the agency from business, art, research, and other related classes.

A new set of students each year means an employee source that is updated with

the latest skillset in technology and tools. Agencies typically have a high turnover

rate. M+K has a built-in source for new ideas every year. Finally, with the agency

existing on a virtual space at first and a contractual system with only two full-time

employers, there is a constant supply of talent and only a short-term

commitment required.

M+K Agency ServicesMarketing campaigns will be tailored for the client focused on reaching a set ofbrand objectives that the client and freelance team will outline prior to the

implementation. The process will begin with conducting in-depth research that

will identify the brands strengths and weaknesses, competition, target audience

trends, and external environment so that a clear positioning can be identified.

M+K takes what people already love about a brand and then expands the

clientele. Once the client narrows down the options of creatives on storyboard,

implementation will go according to schedule.

Defined M+K Approach:1. Identify the clients need2. Identify brand strengths in partnership with a 3rdparty research agency3. Identify M+Ks strategy based off of client goals and brand audit4. Brief the creative team5. Creative team synthesizes research to come up with a core idea6. Implement the strategy through different channels (social, print, etc.)7. Measure interaction between brand and consumer to focus energy on

different aspects of the strategy

8. Shelve rejected ideas for other brands to considerSocial MediaNew media is old media overnight. Innovations are constant and cause

disruptions in strategic planning and outlook. Where there is disruption, there is

opportunity.


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The competitive edge of M+K lies with social media management. Students

recruited each semester are currently millennials. They have grown up with social

media and understand best how to use it. Students will manage social channels

for accounts, including Facebook, Twitter, Instagram, YouTube, Tumblr, Vine,Yelp and other necessary tools. Original engagement posts, photos, videos, and

graphics will be provided consistently according to the marketing plan.

Additionally an analysis of reach and social interactions will be given at the end

of each month.

Mobile marketing is gaining more popularity and therefore, development of

apps and targeted outreach will be explored for client projects.

Print and Branding DesignOriginal photography and design of magazine, and newspaper ads can be

requested. For new start-ups and events, branding, logo design, and/or design

of menus and catalogs are offered. Website design and development is a

popular service for older small businesses looking to reach new audiences.

Public RelationsConsumers increasingly demand a dialogue with brands they like. Services

include press releases, analysis of audience insights, connection of brands and

products with others to create sponsorship opportunities, and community

outreach. From the web to local newspapers, the brand will be represented

according to an approved PR strategy.

PricingTwo founders make $95 per hour and pay the difference to the contractors;100 hours per month per account.

All of the following prices are per account.

Freelance Account Executive - $20 per hour; 20-25 hours per month New Business prospect research New Business pitches Client meetings and monthly reports Community outreachFreelance Strategic Planner - $30 per hour; 25-30 hours per month Coordinating with 3rdparty research agencies


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Conducting focus groups and market research Industry audits Measurement of ongoing campaigns Brand management

Freelance Copywriter and Art Director - $40 per hour; 35-40 hoursper month Coming up with creative storyboards for marketing campaigns Putting together a brand position Designing art and copy for the campaign Design and editing of photography and video Writing press releases and necessary blog posts Social channel management

Opportunities ThreatsForbes.com consistently ranks Virginia the Best State for Business. The Greater

Williamsburg area has one of the lowest combined state and local tax rates in the

nation. The business cost of Workers compensation and Unemployment

insurance is the lowest in the nation. Williamsburg is characterized by small

businesses with 35% having fewer than 50 employees. Since the spring of 2013,

there have been 40 new established and private start-up firms.

Sourcing talent directly from W&M will help establish M+K quickly as The

College is the #1 employer in the Williamsburg area. W&M stands in the centerof the Williamsburg economy with consulting experience that students have

done for Williamsburg businesses for other classes. There is already a positive

relationship between W&M and the local market.

The majority of small businesses are adding social media into their Integrated

Marketing Communications mix. Offering a cost-effective approach and

reputable student body will capitalize on this trend.

CompetitionThe competitive landscape is fragmented with many agencies and consultingcompanies that even specialize in one skill or area. Very few of them offer more

than basic graphic design and printing services. However, the current companies

do have a strong relationship and contract with their clients that will make it more

difficult for M+K to interfere.


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Growth ExpansionM+K is in negotiations with The College of William & Mary and is currently

awaiting a finalized agreement. W&M agrees to encourage strong student

applicants to the program if M+K promises to exclusively hire from the College

and promote the partnership. The core goals and values of W&M align withthose of M+K, especially with the Ideas University segment. M+K will provide

W&M students with real-world opportunities and experience. The program will

draw nationwide attention.

Under the terms of agreement, W&M will agree to disseminate application

information and provide professors in relevant departments with the ability to

recommend strong candidates. W&M will also provide an opportunity to rent

conference rooms for client meetings and pitches and team meetings.

Additionally, the school will provide valuable consulting and networkingopportunities for M+K. The connections W&M currently has with local businesses

will give M+K a strong starting point to set up meetings.

In the second year of operations, M+K hopes to purchase a sales office where

the two founders can work and provide space for other teams to collaborate.

M+K will increase cost of Ideas University by spending more for computers,

scholarships and grants, and workshops and training programs for students.

Worst CaseIf M+K cannot afford to put more investment into Ideas University, the sell to

W&M will be weak. Even at worst case scenario, M+K will operate at a profit. At

worst case scenario, only two accounts will be won and a total of six students will

be hired per semester. While a positive net income still exists, this is very risky for

an agency because there is no guarantee that the accounts will sign on for the

next term. Hours will either have to be cut or be wasted at low utility.

Exit StrategyM+K has requested a $220,000 loan from investors, with the agreement thatannual interest payments in the amount of 10% will be made beginning in the fall

of 2014. M+K is prepared to repay the principal amount of $220,000 in the

seventh year of operations.


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TERMS OF AGREEMENT Required Investment: $220,000 Loan repayment beginning year 1 with an interest of 10% Principal to be repaid in the 7thyear of operations


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APPENDIX : AssumptionsFinancials:

The business opens September of 2014 Business works on a tri-semester basis. September-December makes up

the Fall Semester. January-April makes up the Spring Semester. May-

August makes up the Summer Semester.

The user raised $80,000 from family and friends help. M+K assumed that an hourly rate of $95 would be paid based on a

competitor pricing.

M+K assumes that a total of 100 hours will be negotiated in a contract permonth, giving about 1200 hours a year of service per account.

The number of accounts is assumed to be increasing by a constant growthrate (1 new account per year). Given the loss of an account, a new account

must be found to replace it to maintain this strategy. Account management, Strategy planning, and Creative team pay ratios

are derived and rounded evenly from U.S. National Average Salary for

those positions.

All financials are based on hourly rate calculations and no flat fee contractswere included.

The Business Personal Property tax rate is 3.4% in Williamsburg A Business License must be renewed each year at 35% of the gross

income

Sales and Use Tax is necessary for advertising services in the state ofVirginia. The Virginia and the additional Hampton Roads tax make it an

estimate of 6%.

A fee is undifferentiated based on service offered. For example, socialmedia channel management or logo design will both be offered at the

same hourly rate.

SG&A expenses include workshop funding, networking alumni outreach,and funds for scholarships for students.

Adobe Software costs $70 per month and other computer equipment isincluded in Software & Equipment Expense

Liability expense was derived from comparable quotes in Williamsburg Average basic health insurance and benefits is $90 per month Average cost for contract and lawyer consultation is $75 per hour Rent expense is added in the third year of operations based on $1500 for

1500 square feet office space and utilities.


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Documents

M+K Agency Business Plan