General Staffing Company
GENRX LLC

7641 Highway 141
Saskatoon, Saskatchewan S7N 1M7

GENRX LLC's mission is to be the best staffing firm in our region. Our focus will be to secure clients who may require our services on an ongoing basis.

EXECUTIVE SUMMARY

Business Strategy

GENRX LLC is opening a new general staffing company in 2006. Our area of focus is to be the best staffing firm in our region.

To begin, GENRX LLC will have six full-time staff, including the owner and five support staff to handle payroll, scheduling, and clients.

GENRX LLC will focus on the business sectors listed below. Other business sectors will be added as GENRX LLC matures and revenue potential for new sectors is increased.

• General labor
• Secretarial
• Specialized labor
• Manual labor
• Hourly or one day at a time
• Drop-in labor force
• Accounting staff
• Human Resource staff
• Technical staff
• Equipment operators

MARKET ANALYSIS

Saskatoon, Saskatchewan is a small market with only 240,000 people living in the city and one million living in the Province. There is another city 200 miles to the south named Regina with a population of 200,000. GENRX LLC will have an office in both locations.

There are 30,000 businesses that operate in the Province that are registered with the Government. Our focus will be to offer these business clients temporary staff as they require. While GENRX LLC will only focus our markets in Saskatoon and Regina, requests from clients outside these two markets will be reviewed to see if there is potential to make profits on an ongoing basis.

Marketing & Demographic Data

All information and charts are provided by the Saskatchewan Economic Development Authority.

Competition

Our direct competitors in the market are Kelly Services, Labour Ready, Adecco, and Employment Network. Listed below are the areas where each one of these companies operate and the prices they charge.

Kelly Services

• Office & Administrative: $14-$18 per hour
• Customer Service: $11-$13 per hour
• Light Industrial: $12-$15 per hour
• Information Technology: $20-$36 per hour
• Scientific personnel: $25-$40 per hour

Labour Ready

• Construction: $14-$20 per hour
• Manufacturing: $12-$16 per hour
• Maintenance: $11-$14 per hour
• Farming: $14-$18 per hour
• Retail: $10-$12 per hour
• Transport: $16-$19 per hour
• Warehouse: $11-$13 per hour
• Hospitality: $10-$12 per hour
• Landscaping: $10-$12 per hour
• Horticulture: $10-$12 per hour

Adecco

• Temporary Staffing: $10-$12 per hour
• Payroll services: Rate quote on request
• Call centre: Rate quote on request
• Contract employment: Rate quote on request
• Permanent Staff Recruiting Service

Employment Network

• Construction: $13-$18 per hour
• Manufacturing: $15-$18 per hour
• Maintenance: $12-$13 per hour
• Farming: $11-$13 per hour
• Retail: $11-$13 per hour
• Transport: $13-$15 per hour
• Warehouse: $13-$14 per hour
• Hospitality: $11-$13 per hour
• Landscaping: $11-$14 per hour

Our Services & Pricing

• Construction: $10-$14 per hour
• Manufacturing: $10-$14 per hour
• Maintenance: $9.50—$11 per hour
• Farming: $11-$13 per hour
• Retail: $10-$11 per hour
• Transport: $14-$16 per hour
• Warehouse: $10-$12 per hour
• Hospitality: $10-$12 per hour
• Landscaping: $10-$12 per hour
• Horticulture: $10-$12 per hour

Growth Strategy

Our goal is to have a steady stream of staff to offer our clients. Our pricing strategy for the first 3 years is to make smaller margins for similar services that competitors offer. While doing this GENRX LLC will be able to win more contracts and build a steady revenue stream.

Our temporary staff will be paid above average wages and benefits. GENRX LLC will also go above the norm in the industry and offer medical and dental benefits to all temp staff who work 25 hours per week or more. While doing this will add to the bottom line cost of our company, it will help us achieve our long term goal of attracting top-of-the-line workers and therefore offering our clients the best talent.

Marketing our business will take the traditional approach. In addition, we will employ new marketing strategies to build and grow our business. GENRX LLC will place small ads in the yellow pages of both cities in which we operate. Additionally, we will place sustaining business-card-size ads in local newspapers.

Local Newspapers

Saskatoon Star Phoenix

• Annual Advertising budget of $7,000
• 35,000 paid circulation
• Daily newspaper
• MOPE Nadbank data reflects high business owner/manager readership

Regina Leader Post

• Annual Advertising budget of $5,000
• 31,000 paid circulation
• Daily newspaper

Prairie Dog Newspaper

• Annual Advertising budget of $4,000
• 25,000 paid circulation
• Weekly newspaper

Planet S

• Annual Advertising budget of $4,000

• 25,000 paid circulation
• Weekly newspaper

Radio Stations

• C95—Annual Advertising budget of $5,000
• CJME—Annual Advertising budget of $5,000

Building our new business will require spending on advertising and marketing. Over the course of the business start-up, however, we are confidant that going into years three and four, our advertising spending will be reduced because we will have built our number of clients and will not be required to continue to spend money to get awareness.

Business name recognition will be important to our business. We will use a variety of methods to get this awareness in addition to word of mouth and media events like charity sponsorships.

Charity sponsorships will be easy to find; all we need to do is offer free staffing in exchange for name coverage via the radio, newspaper or television. This will allow us to get more exposure for less than the cost of traditional advertising.

CUSTOMERS

Our focus will be to secure clients who may require our services on an ongoing basis. This will mean GENRX LLC will ask specific questions once a client calls our firm. These questions will gather key market research information that will help us identify the client's present needs and future needs. GENRX LLC will place all this information in the client's file for assessment.

List of Potential Sectors

• Manufacturing
• Retailing
• Construction
• Trucking (both long and short haul)
• Farming
• Office & Administrative
• Sales & Marketing

The industry norm is to charge a minimum of 25 percent for all work required to be done on the site by our staff. What this means is that if a client charged $10.00 per hour, then the worker gets $7.50 per hour and the staffing firm will get $2.50 per hour.

We do not feel this is fair for the worker or the client. Therefore, GENRX LLC will only charge 15 percent. This then will mean that for every $10.00 hour we charge a client, the staff person filling the position will make $8.50 per hour and $1.50 per hour will go to us.

This rate structure will also benefit the client, because we will be able to offer our clients the services of better staff than our competitors.

RISK FACTORS

There are risks in any business that starts from scratch, but having a solid business plan will be key to prepare for these risks.

One of our main risk factors is our competition. They are not likely to sit back and allow us to enter the market; in fact, we are confidant that they will match our pricing once it becomes apparent to them that they are losing business. Based on our review of the market, if we can win 5% of the market in the first year of business and then maintain it, we will be well positioned for future success.

We are very confidant that there is enough business for all of our competitors and us.

FINANCIAL ANALYSIS

Start-Up Expenses

Saskatoon Office

• Office Rental-$700 month
• Yellow pages-$250 month
• Telephone line & equipment-$400 month
• Internet-$75 month
• Office supplies-$1,000 (start up)
• Office supplies-$200 month
• Advertising-$5,000 (start up)
• Advertising-$500 month
• Office equipment—Computers, fax, copier, printers, etc-$5,000
• Desks, file cabinets etc.-$2,000
• Utilities-included in rent
• Parking-included in rent
• Leasehold improvements-included in rent
• First 3 months rent-free with 3 year lease
• Payroll and other software-$2,000

Regina Office

• Office Rental-$600 month
• Yellow pages-$250 month
• Telephone line & equipment-$400 month
• Internet-$75 month
• Office supplies-$1,000 (start up)
• Office supplies-$200 month
• Advertising-$4,000 (start up)
• Advertising-$400 month

• Office equipment—Computers, fax, copier, printers, etc.-$4,000
• Desks, file cabinets etc.-$1,500
• Utilities-included in rent
• Parking-included in rent
• Leasehold improvements-included in rent
• First 3 months rent-free with 3 year lease
• Payroll and other software-$1,000

We were able to negotiate with the landlord for three free months of rent per year we are in business. Our total start up expenses will amount to $31,500 (not including wages and salaries to our full time staff).

Our ongoing monthly expense will be $5,950 for both locations (not including wages).

Our wages for our full time staff will be expensed at the following rate:

• Manager owner—Monthly salary of $4,000
• 5 staff persons—$1,400 per month for each staff person and 5% of bookings for each client they sign to contracts.

Therefore our monthly staffing expense will be $11,000. Our total monthly company staff and office expense will be $16,950 per month.

Projected Income

We have determined that the in the first year we will set our goal to hire out an average of 30 staff per month for a total of 160 billable hours each at an average of $16.00 per hour.

Based on our estimates, we will average $11,520 per month in revenue. While this is less than our fixed costs, we have budgeted for the loss as a way to manage the risk.

Banking and Finance

Based on the required money to launch this business, the owner has invested $100,000 in cash.

Cash will be used to pay for all start-up expenses and monthly expenses as needed. Additionally this money will be used to secure an operating line of credit.

We have made an arrangement with the bank for an interest rate of five percent on the line of credit because we will maintain at least $50,000 in cash in the reserve.

The bank has also agreed to send us referrals if any of their business clients are in need of staff but cannot afford to hire full- or part-time staff by the traditional methods.

MANAGEMENT SUMMARY

Ben Worth—Owner/Manager

Ben has worked in the Human Resources sector for 20 years with four separate companies. These companies range from 40-employee firms all the way up to a 350-employee firm.

Over the course of the last seven years Ben started putting aside money for the business start-up because he always wanted to own his own company. His experience in the HR area has given Ben the ability to understand staffing needs and requirements. Furthermore, his direct experience with the general staffing companies in the area has given him a good understanding of our competitors as well the market in general.