Business Plan / Q&A
For Investors and Associates
I. Who are we:
Vision: SGS changes & reshapes the BPO Z industry and has developed a state-of-the-art cloud solution for clients. We create a “Virtual Workforce” fully integrated.
Mission: SGS reduces the cost of operations for clients while delivering a next generation premium managed services to the industry. We deliver customised solutions that are operated, controlled and managed by the client. No loss of control.
SGS ONE: we developed a state-of-the-art SAAS that facilitates our services as a front end to our BPO solutions and allows the clients who have nothing in place to manage the services and to integrate them into his organization. SGS ONE is also an excellent solution to sell into the market as a standalone SAAS and due to the unique open source platform as is it based on Odoo (www.odoo.com) it allows us to sell apps into this platform to the global market.
Quote: “SGS IS A VIRTUAL WORKFORCE SOLUTION”
Components: We merge BPO, RPO, IM & Digitalization into one client solution. We consult or clients to drive efficiency and effectiveness into the new solution.
- Range of Solutions: This section will illustrate the solutions as we have today. Below you see in the graphic the “Scope of Service” as well as the “Solutions of Services.
- Scope of Service: We focus on these departments as this allows us to contact any company and business regardless of their industry / vertical they operate in. Also in this departments is room for improvement and many tasks and department components to not require physical presence in the company itself. So a “Virtual Workforce” concept is an ideal fit for clients.
- Solution of Service: as we build tailormade solutions for the customer we are capable to implement the exact team and process he needs. So we build the solution by utilizing the below components to make this possible. We use the move of his current department process in migrating them to Zagreb by also taking into consideration to optimize the process. This way we consult the client and facilitate room for process optimization & efficiency in the solution. SGS ONE is designed as the binding glue only for those companies and departments that don’t have a system jet, or where the system they have is not anymore state of the art. So the client is willing with the migration of the team to consider the optimization also by looking at SGS ONE as a valuable additional optimization.
II. Company history:
Phase 0: [Past]:
As the founder of the company I invested during the Phase 0 a total amount of 250.000€. The money was invested over the past 2.5 years– from 2017 until 2019. We prepared the setup of the company. Legal, organizational, physical location, Implementation of first process and procedures. Writing the workbook and development book for SGS ONE. Finding suppliers and programming entities for programming. Implementing web site, social media, marketing and documentation of our services of SGS on the internet. Running for the time a test market for various solutions and subcomponents of solutions. The test market was across Continental Europe, GCC and Asia spanning various industries / verticals and over the entire time of Phase 0. Also, to try out in real life some services, the acceptance and ability to deliver and maintain with clients in order to work out the best setup for services, solutions and procedures. Implementing the legal setup and experience with local workforce and the procedures to get staff into the country from other regions.
Phase 1: [Present]:
This phase is to finetune the services, the process and procedures. Also to move away from more junior staff and students in phase 0 towards a senior team with departmental leaders that allow to move the company not into the serios part of growing the business and further develop the services. The phase was to invest into dedicated marketing resources and redesign the page and services. To move away from classical marketing and sales documentation to modern setup and tools. Implementing a MarCom approach long term with the ability to scale. Laying the ground work for an implementation of an Investor Program by moving the company from a legal setup from an LLC to a PLC frame.
The phased approach for investment was created to:
- 1st focus is to address & contact private individual investors for SGS. Focus group is senior seasoned executive from various industries with decade of management and P&L experience running operations and companies. Also to have those investors in the advisory board to utilize their know how, competence & expertise alongside with their business network.
- 2nd focus is on institutional investors and professional organizations such as AI [Angel Investors], Privat investors, capital investment consulting companies and VC’s. If those investors want to have a bigger investment and therefore higher share amount from the company that is possible. i.e. an investment organization or group of investors want to by 2 Mio. – 3 Mio. as a fist investment that is possible.
Phase 3: :
This phase is to grow and attract more & higher investment after the business has developed and accomplished the set business goals for the period.
- The money will be needed to grow the company, additional software solutions as outlined in the S/W development plan.
- To continue development of additional new APP’s as well as to continue the programming of the existing solutions by widening the feature range and services range.
- At this stage certain APP’s could be launched and further developed as standalone business that would need financing & programming, allowing to gain additional market share. Also, it could be used to increase the share capital and generate more shares at a lower purchase prices to initiate potential “Crowd Funding”. This of course would be decided as a potential plan by the existing shareholders in alignment with the advisory board.
1. What is/will be your core business? Recruiting people (services) or s/w (product)? Why?
The core business is a managed service to the target market that has no competition in current setup. It is a combination of providing people through the means of nearshoring that work dedicated and fully integrated into the client organisation. It is important to emphasize that those people are selected by the client himself and we provide these services in the 5 departments that represent 80% of the client’s corporate expenditure: HR, Operations, IT, Marketing, Sales.
In those areas, where the client does not have software in place, we provide SGS ONE which is the core element of managed service to the client to manage the very same resources that he uses from us. SGS ONE is a CRM/ERP system subscription based. The beauty of this it enriches the margin of the services we provide to our client and it can also be sold as a direct standalone solution on a target market B2B and B2C.
2. What is your overall Business Development Strategy?
- Direct Sales:
- Business to Business:
- Business to Customer:
- Channel Partner Strategy:
3. Which countries / industries / companies are you looking at? (segmentation strategy) – Why?
a. Industries: SGS does not try to develop a story specifically for industries / verticals, our setup is better. By having selected the 5 core departments we have a competitive advantage because it exists in every client company. So SGS focuses on Operations, Sales, Marketing, IT & Telecommunications and HR departments to provide our services.
b. Segmentation: By focusing on SME business, companies between 50-5.000 employees have a vital interest to optimize process and procedure as well as optimize costs. Given the size of these clients, they have not done any similar BPO, RPO or digitalization in the past decade as global multinationals have done. This is reflected in Web based Investor presentation.
c. Strategy: Our business focus is B2B and B2C. By developing an app specially developed for the recruitment market we open a totally new market segmentation for us, as a by-product of SGS ONE.
d. Additional potential: The mobile application will allow to sell this as a standalone product B2B and B2C and it will be an excellent marketing tool to drive recruitment agencies into using SGS ONE as this is backend needed for the app.
e. What if: We win in the next 3 years 5% of the market share with recruitment companies that will use this application to provide reporting to all levels of management and to select candidates in a swiping technology like Tinder or Badoo? ”Tinder for HR”
f. Countries: Zagreb is the selected SGS centre for nearshoring provided for EMEA. After an assessment between the Baltics, Poland, Check, Hungary, Bulgaria, Romania the clear winner is Croatia. Zagreb as the capital is an attractive workplace due to strategic geographical place, the airport has a direct connection to every major city in EMEA geographic area. Because it belongs to the EU, it is fully integrated into the EU. The additional benefit: it is not part of € Eurozone which allows us to deliver significant cost saving benefits for our clients. The second major benefit is the cultural understanding, the ability to support all European languages and to fly within 45 minutes to 2 hours from every European location to Zagreb. These are massive benefits compared to eg. India.
The global growth strategy is to implement an associate network worldwide with associates that are equity and revenue share partners. For the revenue generated by associates in different regions plus the teams they have built in those countries underneath them. Similar strategies like in the 80’s (Baker McKenzie.)
Midterm to Long term goal is to build strategic alliances on a global level.
IV. Which is the Total addressable market (TAM)? - €
✓ BPO: 300 billion € by 2020 with a 25-35% growth predicted by 2027 to exceed to significant 400 billion € range.
✓ RPO & IM 50+ Billion € in 2027
✓ CC: 300+ Billion € in 2026. The global management consulting services market is anticipated to grow the fastest in Europe, by 3-5% per year.
Sources: please find below listed some of the resources we used to build our case and to evaluate the market.
V. Which is the served available market (SAM)?
The focus market in the start phase is Europe and the UAE. As we can excellently provide within that territory being at the entrance of that geographic region, to facilitate benefits to all these clients. As the SAAS will grow in implementations with clients in the B2B & B2C market we can start to consider other geographic regions to cover such as ASIA with strategic alliance partners to deliver additional services through our application.
SGS ONE application is based on www.ODOO.com. The intention is to develop SGS ONE and its Apps within that framework for the benefit of having a model for our clients as well as later for the open source market, as additional SAAS and Subscription based solutions. Why? Our clients will get development and customisations for their BPO services that basically finance the development of future apps and solutions to enrich SGS ONE Apps, but also puts us into the position to sell these developments to the global community like developers do for the iPhone, SFDC and Microsoft etc. This market is not limited to any geography and opens the possibility to sell to any size of company our APPS and SGS ONE.
The first app we want to put out there as a development from and for SGS ONE is the application for the HR & Recruitment which also can be provided and sold to B2B & B2C.
VI. Which is the target market?
This is the plan for thedevelopment of the BPO Z Services. The development of selling various applications can go much quicker and enter markets much faster. This is also the development plan from the HQ central point of view. With the onboarding of Share Equity Partners who live in various regions we would be able to much quicker enter with local support and present in order to win clients in different geographic areas. Also, the development of strategic alliance partners and channel partners later for the development and sale of the SGS ONE SAAS platform will also help to accelerate the plan.
Curent Outlook Plan
|Year||Focus||Upside with Investment|
VII. Which customers do we have today?
VIII. Which is our revenue today?
Please see the financial report FY 2019 for last year numbers.
The Forecast for this year (2020) with 1.5 salespeople is 4 Million Euros in TCLRA [Total Contract Lifecycle revenue per Annum]. The plan is to ramp up the sales team to 11 ISAM plus Manager. Therefore, we need the investment as early as possible in order to build up more potential for this year and a solid pipeline for next year.
IX. Revenue target:
The current plan assumes that we have a minimum coming investment in this FY of 450.000€ in order to achieve our plan. An investment on the top would allow us to grow quicker and prepare this year more potential revenue in order to build up for next FY as the typical solutions sales takes from start to contracting with clients up to 6 months. The Min. Goal is with the minimum investment and the stretch goal with full investment of 850k€. That would put us on the stretch goal development curve.
|Min. Rev. goal||750k€||1.750k€||3.500k€||8.000|
X. Customer target:
The Target for the sales team is based on a revenue target per sales headcount. We expect an average BPO size to be min. 90k€ per year up to 250k€ per year. So, an account manager in the team would need to sign 3 to 9 client deals per year to reach the minimum achievement of his goal. As we grow and have successful sales, we will increase the goal significantly.
|Head Count||2 FTE||4 FTE||4 FTE||2 FTE|
1. Client Contracts Structure:
Our services are signed manages services contracts. So, we use the term TCLRA [Total Contract Lifecycle Revenue Annually]. That means a contract that is signed today runs for at least 1 Year. If not terminated it automatically extends for 1 year. Some client contracts in the future who are more complex or involve more departments might have a starting contract time of up to 3 yeas. Accordingly, if we sign midyear a contract it contributes to revenue to this year and to the entire next year.
2. Client Acquisition cost, GMV & Take Rate:
|Client Acquisition cost:||5.573 EUR/month|
Monthly Gross Merchandise Volume
As we are selling services, the measure for growth would be marketing costs allocation. Aim is to have 20.000 EUR per month, currently operating with 1.633 EUR for marketing costs per month
Take rate (%) – % of potential clients that sign up for a service
conservative 5% for 2020
XII. Recruiting People Business
1.What type of people profiles do you recruit?
As our solutions are built for the client’s departments, based on the client’s specifications we have all kinds of profiles we need to recruit and implement in the HQ. But all the profiles are usually people with university degree background or white-collar workers over engineers to generic technical to high tech profiles. The resources could come from all geographic regions with a focus on the once that have a short and easy process for legal employment based on immigration requirements.
2.What type of industries can you serve?
Engineering, Consultant, banking, pharma…As stated, we are not focusing on Vertical / Industries, we focus on those 5 departments that are usually representing up to 80% of the corporate expenditure. i.e. Operations, ITC, Sales, Marketing and HR as you can find these types of departments in every company regardless of their business or industry. Moreover, the issues for optimization in those departments are the same regardless of the vertical the client operates in.
3.In which countries do you get resources? Only Croatia?
We recruit from all regions of the globe with the focus of getting the resources firstly local, then regional, Europe, EMEA and at the last global. That is the priority. As a second rule of decision is, we focus on regions where working visas are available in a short time period depending on the searched skills of the client.e
4.What is your capacity in terms of resources? (without jeopardizing the quality of resources)
As we focus on companies between 50 FTE’s – 5000 FTE’s as our target market and in the 1st 2 years on companies in between 50 FTE’s and 2500 FTE’s we focus on departments who by size and scope can be implemented in Zagreb. It is important to emphasize that we ramp up the departments resources as the contract has been signed in an agreed ramp up phase. So, we don’t have to employ people upfront. Why? Our service is not a shared one but a dedicated service where the people are selected by the client. Core of our BPO Z solution portfolio. That is one of our key selling points to the target audience. So, as we focus on the right set of companies, we do not have a scalability issue. We would in the beginning not take on clients we could not handle.
5.How scalable is this business given the limited availability of resources?
Very Scalable. As we will sign up more and more clients with similar specifications, we will be able to start serving BPO solutions that become more and more common in the setup and faster in the delivery. It will also allow us to start providing shared services to the clients as well. Most of all, it will allow us to develop more and more applications on ODOO platform that we can also sell to the global market and develop mobile apps that will also facilitate to implement more services.
6.Which selection criteria do you use to recruit people?
As our BPO Z services are base and tailormade according to our client needs the specifications come from our client, who is also the party that does the selection of the resources/personnel. When the team is implemented it is managed and operated by the client virtually. Therefore, our customer satisfaction score will be high. Also, the rate of recommendation will be high for other departments of the client as we have a cross selling potential to at least 4 other departments given any starting department we are already in.
Customer referrals to another client should be very likely. After all: “Who would state something negative about his own manged and operated department”
7.What happens if your resources receive a complaint/they don’t perform and need to be released?
The client can change, alter and replace people in the same way he would operate any PIP [Personal Improvement Plan] in a company. He would select the new person and SGS would change the person in the department.
8.Are the employees in Croatia allowed to travel if required, or can they do only remote work?
Depending on their role and task in a client managed service / operation they can travel. Based on the requirements of the client for various purposes defined by the client. The cost of travel will be covered by the client.
XIII. Competitive Edge (both for s/w and services):
1. Who are your main competitors?
Depending on the scope of services it the competition could be any company that provides services in the BPO, RPO and IM area for example. So, Hays, Corn Ferry, Egon Zehnder, Alexander Mann’s Solutions, Manpower, ATOS, IBM, Siemens, Oracle, SFDC, SAP, and many more. But their focus are big accounts, larger than 5000+ FTE’s, as their overlay cost are so significant that they need a high volume of work and processing in order to be proficient and attractive for their client. Plus, all the services are only B2C not Business to B2B, whereas SGS provides both. Example for HR: RPO is usually used when there is a high demand and a lot of placements in only a view position. i.e. Global Company needs 1500 Account Managers in 30 countries per year on average or 500 Engineers in 20 countries. Same position multiple times. Our clients are the exact opposite. They might need 50 placements a year in 25 different positions / disciplines. Not a scalable business for major players.
2. How do you differentiate yourself?
We are very different from all our competitors as we have the following benefits & Added Value:
|Dedicated Resource||Not Available||Yes|
|Resources selected by Client||Not Available||Yes|
|Resources fully integrated||Partly||Yes|
|Virtual dedicated Workforce||No||Yes|
|Exchange of Staff by Client||No||Yes|
|SGS ONE (ERP-CRM)||No||Yes|
|Office Space for Client||No||Yes|
|App to Manage the Service||No||Yes|
|Easy & Fast reachability||No||Yes|
|Complex to Negotiate||Yes||No|
|Complex to implement||Yes||No|
3. Which is your competitive advantage?
We deliver a custom made, yet the standard way of a customized implementation for the client under his management, control, definition and coordination with selected staff and requirements defined and decided by the client. It is virtually his department but not on his payroll:
|Dedicated Resource||Not Available||Yes|
|Resource selected by Client||Not Available||Yes|
|Service full Managed by Client||Not Available||Yes|
|Virtual Dedicated Workforce||No||Yes|
|Exchange of Staff by Client||No||Yes|
|Working on Client Software||No||Yes|
1.How big is the team now?
The current core Team to manage this is 14 FTS’s direct on payroll and project remote accessible about 50 FTE’s off payroll, on a case by case bases. Team size is not so important as we ramp up in every project the staff for the project after the client signed the contract so now pre-investment cost in staff. That is exactly the benefit for the client and us. As the client selects the people he needs. If we sign a contract the ramp-up time is defined by the amount of dedicated resources he needs. So the ramp-up time can be anything from 2 months to 6 months. Business Support & MarCom -Team resources could be partly ordered / shared so 0.25 FTE – 1 FTE / dedicated person. All other services will be only full time resources.
Based on the above stated, Operations, IT & Telco, Sales, HR will all be dedicated resources. Therefore, we would only need to grow our internal team in HR for Executive Placement which is not a managed service. When we win clients for top positions placements, we do this with our resources. Currently there is no need to hire until we grow over 20 EP [Executive Placement] per year.
2. How do you recruit your team?
a) Client Requirements: General recruitment is done based on the requirements of the client and job description the client provides for the positions client would need.
b) Search Process: Sources are first local, regional and then global. i.e. SOS personal we would run the search from day one on a European & CEE level. Focus would be on location, language and competence for the client requirements. So, staff for the client can come from the region but also any other place.
c) Attractive location to work: We have chosen Croatia and Zagreb also because of its location being attractive for foreigners to live and work there as well as commuting to clients and home.
d) Search Methods: Active Sourcing, recommendations, Target List of competitors, Advertisement, Social Media etc.
3) Do you plan to expand your team this year?
a) What determines the growth of staff? The beauty of BPO Z [Business Process Optimization] emphasis an OPTIMIZATION that is delivering tailormade solutions starting first and foremost with the tailormade personnel. Our service is “NOT A SHARED SERVICE”, it is a DEDICATED SERVICE. Meaning we only recruit people for a client project after the client signed the agreement. Find the ramp up phase scheme represented in point VI / 1). The benefit is:
- the client selects the people of his “VIRTUAL WORKFORCE” that will be run & operated by him and integrated in his process and procedures
- No upfront cost to the company. Accordingly, with the implementation of the services we start making a profit.
- iii) Setup cost of the project is only upfront fee that allows to implement the tailor-made solutions / team which client wants and to fund the adaptation of process, procedures, HW, SW necessary to start the project and service.
- Signed Projects growth: Clients we have already signed can grow their division once the service is integrated and operational. We can use the implementations as reference points in clients for other departments to thing also about implementing solutions for their departments.
b) If yes, how many and which roles are you searching for? In the beginning we focus on clients that would have a need for project(s) starting with 1-9 FTE’s for a project. That will allow us to generate revenues already in the first month. As we grow bigger and have more project managers in place, we will win bigger projects with 10+ people for a project.
(1) DEKRA: The contract covers 1FTE IS, 1 FTE HR, ¼ FTE MarCom + ¼ FTE BST support. So over time they plan to grow the resources to 5 FTE’s over the next 12 months.
(2) LFoundry: R&R Contract to start. Plan is to migrate this into an RPO for HR, implement 1 FTE ISAM and 1 FTE MarCom as a managed service in the next 6 months.
(3) Factory 42: Is interested in 1 FTE SOS & ½ MarCom
(4) Veritas Deutschland GmbH: 1 FTE SOS & ½ FTE MarCom to start with and RPO potentially later. Upside is a joint alliance / partnership using their clients and our SW to sell this as a solution via them as a provider. See channel partner under III. 2. b)
XV. S/W Product:
1. Do you have a minimum viable product (MVP) already on the market?
Definition: A minimum viable product (MVP) is a concept from Lean Start-up that stresses the impact of learning in new product development. MVP as the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. This validated learning comes in the form of whether your customers will actually purchase your product. A key premise behind the idea of MVP is that you produce an actual product (which may be no more than a landing page, or a service with an appearance of automation, but which is fully manual behind the scenes) that you can offer to customers and observe their actual behaviour with the product or service. By seeing what people do with respect to a product is much more reliable than asking people what they would do.
2. SGS ONE:
This solution is already live and used for clients and we have already offered this to clients who will sign the service and start implementation and customization.
- i. Next developments are planned and based on market data and feedback. So the road map for this and next year is given.
- ii. HR APP: is under construction and development and is already in the testing phase for the Android system and will follow on IOS in the next 8 weeks.
- 1. Follow up developments for phase 2 and phase 3 are already defined as well as the development of the applicant application. As soon as funding is available.
3. We test the market and showcased this to clients, and we will continue to do so.
Also, when clients are running, we develop the implementation and further services and in the future we will use customer feedback calls to see what enhancements could be embedded in the service and S/W.
4. SGS ONE:
We have chosen www.odoo.com as the platform to develop our frontends for our services for the clients. We can quickly develop own applications and further implement them on a client by client bases. We are also able to use already available solutions in the market for SGS one to facilitate the client needs. This puts us in the unique positions to use the client revenue and projects to develop their own products to the benefits of our services and customers as well as selling them as full functioning plugins later in the market. Individual development financed by the client and with the client input for market-oriented SW and Solutions.
5. HR APP:
A platform that is in addition to our platform and the HR service later to be developed for candidates. Benefit is towards our own S/W as well as the ability to sell this as a standalone product, that can be connected to any major HR management S/W platform in the market.
2. What is the main value proposition of your product?
1. Front End:
SGS ONE enables the client to manage, coordinate and handle reporting processes for the people client implemented in SGS. Many SME clients don’t have processes or procedures in place and we welcome the opportunity of advising them with optimization and digitalization in order to grow efficiency.
SGS ONE enables the clients. Our platform is open source. Meaning there are many suppliers and vendors with solutions and products that the client can choose from for his company. We enable the client with this platform and not looking them in like other platforms or solutions.
3. Third Party Plug ins:
This allows us to implement BPO people solutions even if we don’t have our own front end to manage that. i.e. Today we don’t have case handling tool. So, if a client wants to build a team in Zagreb for 1st & 2nd level support, he can choose an Odoo component as the front end and accordingly we deliver the team in Zagreb.
Each new client allows us to optimize existing tools and also finances us which leads to the development of new tools.
5. Service & Operations:
The platform allows us to build a channel system to sell also hosting, operations, development and service to clients. Operated by Channel partners with a revenue stream to the partner and to us.
3. What is the unique selling point of your product?
Any special technology embedded e.g. AI/ML etc.
1. Synergy & Fusing:
We combine cost reduction through nearshoring “Virtual Workforce” with a front end to manage the department while driving:
- Process & Performance
- Cost Reduction
- Controlled & Managed by the client
is the platform as a base for our solution. Well established in the market, in the magic quadrant of Gardner evaluation.
3. Plug Inns:
an enormous range of plugins available that allow us to create and developed many services from Zagreb for our clients whether we have already develop our self a plugin or not.
4. Feature Ritch:
Ability to deliver a feature rich solution with quick implementation. Ensuring we get regular inputs from clients.
Having the client we also generate revenue on development, adaptation and implementation into the existing platform and environment for the client.
6. What is the product roadmap in the period 2020-2022?
7. Who set up the roadmap?
Management Team, client feedback & client requests for development and in the future also input from Advisory Board will be required.
8. Who is responsible for product development?
Business Support Team is responsible for the development. Currently we source from the market to the best conditions and when business reaches a certain volume, we will develop an in-house R&D team for the company. In the beginning, in the start-up phase, we need to stay lean and cost efficient. SGS defines the road map of development and the source code belongs to SGS.
9. How do you set up the roadmap? Customer feedback?
- Internal: Ideas from the management team and the team members. What would drive efficiency and effectiveness in a managed service for the client.
- Clients: Proactively asking clients how to further develop the system by looking at their requirements and input what they would believe is beneficial to have. To manage the process and outcome. Also, by enriching the transparency and ability to manage and control. The approach will be done in 2-fold:
- Proactive: Suggesting new features and getting feedback. Using certain clients in the future also for testing and input. So basically, user input and user feedback.
- Reactive: Getting requests for development and features from clients in adaptation and development of their services. Using those requests to see if certain features would be beneficial for every client and user to maximise business outcomes.
Candidates: For the applications that are developed for the candidates as an end user we will ask for feedback and idea input on the applications and candidates directly. Also input from the clients and recruiters regarding their experience and requests they have received from the users.
Advisory Board: Investors are invited as members of the advisory board that have expertise and experience for S/W development. We need the board for all kinds of additional ideas in the future and also to avoid potential mistakes.
S/W & App’s: We monitor the market and look for ideas of what maybe is an enrichment for our system, processes and procedures.
Service: We look at features by continuously exploring what is the service team that the client wants that would help to make these processes more efficient and effective. Always by looking at the bigger picture in order to reach scalability in all clients.
XVI. P&L, Break-even and ROI:
By the revision of financial data, it can be seen historical as well as forecasted data for the period 2020-2023. Accordingly, as plan of team growth and revenue is achieved, further development expenses have been estimated. Historical financial data can be supported by financial reports FY 2017-2019.
|P&L (‘000 EUR)|
|NUMBER OF Employees||6||6||8||15||20||40||60|
|SALES FORECAST (TCLAR)||–||–||–||750||1.750||3.500||8.000|
|EBITDA MARGIN (%)||5,29||(3,05)||(136,05)||10,00||40,00||64,00||78,18|
|Dividend per share||31,50||54,00||81,00|
By signing new client contracts and reached greater TCLRA amount [Total Contract Lifecycle revenue per Annum], positive EBITDA and therefore profit will be achieved. As EBITDA margin is rising with increasing revenues, SGS will achieve Break-even point and further business development. By obtaining business stability and business profit, from 2021 onwards, dividends are planned to be calculated and assigned to investors.
XVII. Issues like COVID-19:
is likely to impact the economy worldwide: the corona virus is an issue for most of the companies and a lot of markets. So, we are not taking this issue likely or easy. We have asked clients, executives, done our own market study and evaluation of the current situation in order to decide how to move forward.
Who is our target market / client:
SGS focuses on the SME, Small & Medium Enterprises, business companies from 50 FTE’s – 5000 FTE’s. Those companies are now, due to the corona situation, looking more than ever to drive cost saving and efficiency. The policy of those companies changed in the last 2 decades. From the view where only a selected people were allowed occasionally to work from the home office. Company culture of the target market is to be present in the office, more so when the companies are in privately held environments.
The Corona Shut Down:
Our target market clients where forced, for a month now, to have all their staff to work from home. Surprisingly, the Management of the companies have realized that this works fine, and that people are working on average more and remain productive on the same level. So Corona is a very big show case and opportunity for a “Virtual Workforce & Virtual Team” for clients under their control as our service is designed to be. As the impact on corona will continue for quite some time effecting the work of clients and of staff in the future the showcase will continue to go on.
Economic Impact on the target market: Clients will focus on recovering as quickly as possible back to normality. This will be very difficult, if the recovery plan is just to go back as it was like before, with existing personnel. Companies will look for any opportunity to recover losses, cutting costs dramatically by laying off staff, but the work needs to be done. So their willingness to look for alternatives will increase vastly. Not only the study of the change in our target market from last year by EY has shown a significant trend, but Corona is just accelerating the issue much more dramatic for us. It is the best “SHOWCASE” for our services and solutions.
Sales: in this fiscal year we currently run the sales team with two full time FTE’s Juniors. The average introduction calls and meetings we have with clients has changed during the corona time dramatically. Compared to the time before the corona pandemic we have now on average 3 [three] times more calls and meetings than we had before. All executives are open to listen to alternative ideas especially around cost cutting, driving efficiency and ROI. They are all willing to move from an introduction call to a meeting phase and we follow up with offerings. By this, we are preparing the clients with alternatives when they want to ramp up their operations and business after the shutdown. Many companies have put people into short working, part time working and laying them off. Based on that, the pressure on the leadership teams is very immanent and they are all considering alternatives more and faster than they did before the crisis. We could catch a lot more opportunities this year if we could grow the sales team by 10 seniors asap. But without investment that will not be possible.
Strategy: Finding the necessary investment asap to grow the sales team and the marketing budget to inform clients about the alternative we offer to discuss right now with the momentum in the market the ability for clients to quickly move forward while saving cost dramatically and quickly being able to implement small teams and solutions as they need it. Also, to help them to provide them with a migration strategy. Mostly it takes some time and effort for clients to reduce staff and it usually involves the working council and or unions. But now clients, due to the corona pandemic situation, have the economic and business reasons to shut down departments or procedures operated internally due to significant economic reasons. Moreover, in order to have clients who will decide using our solutions we need to quickly address as many clients as possible in the next 12 – 18 months. For that reason, our aim is to get as many investments and clients in order to realize our scalable solutions development and plans.