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Business Plan for REALITY CABLE NETWORK LIMITED World Trade Centre, 2nd Floor Independence Avenue P.O. Box TA 658 Taifa-Accra, Ghana Tel: +233540722475 Fax: +233571962378 E-mail: rcn@execs.com

Written and submitted by Selassie Nyadzi Director of Corporate Affairs Paul T. Patrick Director of Finance Herbert Tombia Director of Administration


Confidentiality Agreement The undersigned reader acknowledges that the information provided by Reality Cable Network Limited (RCN) in this business plan is confidential. Therefore, reader agrees not to disclose it without the express written permission of the Board of Directors of Reality Cable Network Limited (RCN). It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to Reality Cable Network Limited (RCN). Upon request, this document is to be immediately returned to Reality Cable Network Limited (RCN). ___________________ Signature ___________________ Name (typed or printed) ___________________ Date Note: This is a business plan. It does not imply an offering of securities.


Table of Contents 1.0 Executive Summary…………………………………………………………………………………………………………………….……………….….2 1.1 Objectives………………………………………………………………………………………………………………………………….…………………....5 1.2 Keys to Success………………………………………………………………………………………………………………………….………………….…6 1.3 Vision, Mission, Value………………………………………………………………………………………………………………………....……………7 2.0 Company Summary……………….………………………………………………………………………………………………………….…………..…8 2.1 Company Ownership…………………………..…………………………………………………………………………………………………………….9 2.2 Company Locations and Facilities………………………………………………………………………………………………….…………………9 2.3 Start-up Summary……………………………………………………………………………………………………………….………………………….10 3.0 Products and Services……………………………………………………………………………………………………….…………………………...12 3.1 Product and Service Description…………………………………………………………………………………………………………………….12 3.2 Competitive Comparison………………………………………………………………………………………………………………………………..12 3.3 Sales Literature…………………………………………………………………………………………………………………..………………………….13 3.4 Technology…………………………………………………………………………………………………………………………………….……………….14 3.5 Future Products and Services……………………………………………………………………………………………….……………………….14 4.0 Market Analysis Summary……………………………………………………………………………………………….…………………………….14 4.1 Market Segmentation…………………………………………………………………………………………………………………………………….15 4.2 Target Market Segment Strategy……………………………………………………………………………………..………………………….15 4.2.1 Market Growth…………………………………………..…………………………………………………………………..………………………….16 4.2.2 Market Needs………………………………………………………………………………………………………………..……………………………16 4.2.3 Market Trends……………………………………………………………………………………………………….…………………………….….…17 4.3 Service Business Analysis…………………………………………………………………………………………..…………………………….….18 4.3.1 Business Participants…………………………………………………………………………………………………………….……………….….19 4.3.2 Distributing a Service………………………………………………………………………………………………………….…….……………...20 4.3.3 Competition and Buying Patterns……………………………………………………………………………………….…………………….20 4.3.4 Main Competitors ……………………………………………………………………………………………………………….……………………..21 5.0 Strategy and Implementation Summary……………………………………………………………………………………………………..22 5.1 Competitive Edge…………………………………………………………………………………………………………………..……………….…….22 5.2 Sales Strategy……………………………………………………………………………………………………………………….………………………23 5.2.1 Sales Forecast………………………………………………………………………………………………………………….………………………..24 5.3 Strategic Alliances……………………………………………………………………………………………………………..………………………….24 5.4 Marketing Strategy……………………………………………………………………………………………………..………………………………..24 5.4.1 Positioning Statement……………………………………………………………………………………..…………………………………….…..25 5.4.2 Pricing Strategy……………………………………………………………………………………………..…………………………………………..25 5.4.3 Promotion Strategy……………………………………………………………………………………..……………………………………………..26 5.4.4 Distribution Strategy……………………………………………………………………………………………………………………………………26 6.0 Management Summary………………………………………………………………………………..………………………………………………..27 6.1 Organizational Structure…………………………………………………………………………………………………………………………………28 Organizational Chart……………………………………………………………………………………………………………..……………………….28 6.2 Management Team…………………………………………………………………………………………………………….……………………………29 6.3 Management Team Gaps……………………………………………………………………………………………….……………………………….29 6.4 Personnel Plan…………………………………………………………………………………………………………………………………………………29 7.0 Financial Plan…………………………………………………………………………………………………………..…………………………………....30 7.1 Important Assumptions………………………………………………………………………….……………………………………………………….30 7.2 Key Financial Indicators……………………………………………………………………….………..……………………………………………….30 7.3 Break-even Analysis……………………………………………………………………………...……………………………………………………….31 7.4 Projected Profit and Loss…………………………………………………………………..…………………………………………………………..31 7.5 Projected Cash Flow…………………………………………………………………………..…………………………………………………………..31 7.6 Projected Balance Sheet…………………………………………………………………….……………………………………………………………32 7.7 Business Ratios……………………………………………………………………………………………………………………………………………….31 Conclusion……………………..……….....................................................……………..………………………………………….31

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1.0 Executive Summary: 

Business Incorporation: Reality Cable Network Limited (RCN) is a strong media organization that is registered as a limited liability company under the provision of Sections 27 and 28 of the Companies Act, 1963 of Ghana with its business registration office located in Accra metropolitan area. The company registration number is: C5114072012; and the Tax Identification Number (TIN) is: TIN C000123644X. The amount of corporate shares allotted to the company upon registration is USD100 million. The three Board of Directors reserves the right to take 60% of the allotted shares or USD60 million; and investors taking up the 40% or USD40 million. Any sums required of investors to develop the business beyond the initial share allotment of USD100 million will warrant the express approval of the Registrar of Companies before effecting such contracts.

Primary Areas of Business Operations: The company is incorporated with three directors and its primary areas of business operations are:   

TV Broadcasting Services Media Production Media Franchising

The above-mentioned three massive sources of revenue generation are modeled across the board like the existing great business organizations in the media industry, such as Comcast Corporation, The Walt Disney Company, News Corporation, Google Inc., and Viacom Inc., all with combined annual revenue of USD148 billion. Upon incorporation, the Board of Directors of Reality Cable Network Limited (RCN) has come up with a Board Resolution to, at least, capture 2.02% of the global media-market value in its first year of business operations, which accrues to USD3 billion. 

The Revenue Target: The target of USD3 billion in annual revenue is only achievable when the necessary financing avails the Board of Directors with the requisite resources to work out this overall business plan, starting by having a befitting, well-furnished, office space at the business hub of Accra metropolis, which by itself will be used as an asset in the firm. The office space, when not in use, will be utilized as virtual office for executives to lease on hourly basis, which, in the first place, recoups the annual costs of renting the facility.

Star-up Resources: More so, the company will be equipped with three motor vehicles to transport the three executive directors to different contact points in and around the Accra metropolis to accomplish the daily routines of the media organization. These three motor vehicles will themselves remain as assets in the company’s balance sheet, because when not in use, the vehicles will be used for car-rental services in order to recoup the costs of purchasing them, aside from running a depreciation account. Page 2


Other Start-up Resources: Other relevant start-up resources are staff quarters for the Board of Directors. Of course, the three apartments that will be leased to the three directors to live in close proximity, and effectively run the affairs of the company, will serve as home for the directors. Nonetheless, due to a suitable pattern of interior decoration placed on the staff quarters, when any of the apartments are not in use, the vacant flats will be leased out as serviced apartments in order to generate revenue to meet the costs of leasing the apartments. Further arrangements will be made to provide convenient staff quarters for the Chairpersons of the Executive, Local, and Foreign Advisory Boards, and any of these apartments that are left vacant for a protracted period of time, may or may not be leased out as serviced apartments.

Launching the Company Website: Furthermore, a corporate website will be established to promote and market the products and services of the organization. At a minimal value of USD250 or less, a company website can be launched with Webs.com. This corporate website is a great asset to the company because it will not only be used as newsfeed for the organization, but as a vital source of revenue from the world over. Since the company has chosen to produce a reality show, World Tribal Hero, for its first year of business operations, the website will be used for e-mail voting. Only people from the world over who are subscribed for this activity will be allowed to use the website for email voting in favour of their tribal delegates. Since the reality TV series will be global by nature, we expect that 1.4 billion or 20% of the entire global community will be interested to watch the programmes of the company. At an annual registration of USD5.00 per person, we expect to enroll 50% of the projected number of spectators (700 million people), which might accrue in revenues to the tune of USD3.5 billion.

The Pilot/ Demo Show: The shooting of the Pilot Show for demonstration purposes now comes in. Even before the commencement of producing the show, advertising revenues to the tune of USD16 million will accrue to the company, because at present, the advertising rate on reality shows per 30 seconds is USD1 million. During the shooting of the first episode of the World Tribal Hero, an advertising agency will be employed to give tenders to prospective advertising big weights in the world over to come on board. The production cost of the Pilot show is slated for USD3.5 million. With a further investment sum of USD1 million in favour of the advertising agency, the profit from the first episode of the show stands at USD11, 500, 000. This revenue is exclusive of the global sales of the DVD itself, which might generate USD300 million in gross revenue, and USD196 million in the accruals of foreign broadcasting rights from 196 countries.

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Major Sources of Revenue: From every indication, the business of Reality Cable Network Ltd (RCN) is instantly lucrative from the start. The expected sales figures from all other means of generating revenue are as follows: 1. RCN Launching 2. Global Phone Subscriptions 3. Global Phone Voting 4. Global Text SMS & Phone Voting 5. Pilot DVD 6. Global DVD Sales 7. Global Broadcasting Rights Issue 8. Global Adverts 9. Global Country Tour 10. Global Publishing 11. Global Movie 12. Global Merchandize 13. Global Product-branding Licensing 14. Global Video Game 15. Global Opera Shows 16. Global Theme-Park Licensing Total

Revenue Estimate

- USD75,000 - USD5,500,000 - USD286,000,000 - USD291,500,000 - USD196,000,000 - USD300,000,000 - USD196,000,000 - USD800,000,000 - USD117, 500,000 - USD300,000,000 - USD300,000,000 - USD9,800,000 - USD196,000,000 - USD56,000,000 - USD6,000,000 - USD6,000,000 USD3, 166,375,000

The resources needed to effect the above sales are as follows: 1. Financier Payout (Total investment, 100% profit, Plus 20% bonus) - (USD556,811,358.50) 2. Consultancy Fees and talent outsourcing – (USD 13,505,000.00) 3. Prize money and overhead costs - (USD 69,323,132.50) Total Costs per Annum

- (USD639,639,491.00)

Profit before Tax

- USD2,526,735,509.00

Note: The profit before tax as indicated above is exclusive of other incomes from the company’s website, virtual office services, car-hire services, and serviced-apartment revenues. 

Projected Outcome: With total investment estimated at USD80 million and profit before tax projected at USD2.5 billion, this business venture is no different from the other reality shows at the marketplace, especially American idol where Ford Motors and Coca Cola invested USD60 million in 2011, and then realized more than USD800,000 in net sales. Since World Tribal Hero will Page 4


be telecast live in 196 countries, the activities and revenue collection is expected to hit USD3 billion at the end of its first year in business. On a resolution passed by the Board of Directors on December 4, 2012, all investors will be issued Common, or Preference Shares, and Bonds if it suits the investors’ needs the most. Besides, all tangible assets that are invested in the company will be granted 100% profit, 20% on invested sum, and an entitlement to the company’s annual dividends. Board appointed staffs of the organization are also allowed to invest in the company’s stocks, and the same fair financial treatment will be allotted to them. 1.1 Objectives: 

Short Term Goals/ Miscellaneous Incomes: 1. Patent the rights of the reality show concept, “World Tribal Hero”, with the Copyrights Office, Ghana. 2. Lodge in MTN sponsorship fund of USD3.5 million into the company’s established corporate bank account. 3. Open a bank account with an investment bank that can allocate USD80 million in perpetual funding for one year running. The same bank will collect all revenues accruing to the company. 4. Secure an office space at Movenpick Ambassador Hotel Emporium at USD61,050,000. This virtual office is capable of generating USD125,000 annually if marketed and promoted effectively. 5. Engage an interior-decoration firm to furnish the office as virtual office for the price of USD63,000. 6. Launch the company, sell shares to special invitees, and generate USD75,000 in revenue. 7. Launch the company’s website, enroll email voters worldwide, and generate USD7 million. 8. Use the website to raise funds for the cancer and aids foundations to the tune of USD40 million. 9. Get credit cards for the Board of Directors with USD10,000 credit limit to meet contingency expenses in the course of travelling around the world to put the global business of the company in proper shape. 10. Get the Board of Directors with three Range Rover Evoque SUVs for USD150,000 and then use them to generate USD180,000 on car-hire services. 11. Settle the three directors with their Directors’ Fees worth USD1 million each to have them run a global business model that is time constraining and energy-sapping. The Board of Directors are expected to deliver on the prospective annual general revenue of USD3 billion, using their corporate vision, abilities, and know-how. Page 5


12. Also settle the Chairpersons of Reality Cable Network Ltd, Hon. Zita Okaikoi of Ghana Supply Company Ltd; the Local Advisory Board Dr. Ekwow Spio Garbrah of Ghana Business & Finance; and Foreign Advisory Board Cecile Frot-Coutaz of Freemantle Media Ltd with USD2 million each. The time, sacrifice, and skill-sets that the three chairpersons bring to make this organization a success, positions them to be adequately rewarded. 13. Enlist the services of professional organizations to develop the IT infrastructure, promote, and then market the organization to make an impact on the global community. 

Long Term/ Revenue Generation: 1. Run the reality show, World Tribal Hero, for twelve (12) years in order to generate USD36 billion in gross revenues. 2. Establish a charitable trust to give arms to the less fortunate and handicapped. Seek funding from other foundations, such as the United States Agency for International Development and Bill & Melinda Gates Foundation. 3. Incorporate offshore corporations as subsidiaries of Reality Cable Network Ltd in all of the 196 UN-recognized countries in the world. 4. Set up cable TV stations in all countries in the world. 5. Buyout as many media organizations in the world as possible.

1.2 Keys to Success: 

Home Division:            

Place seasoned statesmen and business magnates as chairpersons on all the three boards. Train and pay workers well in the company. Provide adequate media-related, on-the-job courses to boost the performance of the three directors. Employ experts to run the daily activities of the organization. Build alliances with other media organizations. Invest in the preference shares of great companies. Encourage gender equality in the firm. Advertise and create awareness of the products and services of the company. Compensate shareholders well. Keep up-to-date and remain competitive with other media organizations. Work with the best auditing firms. Promptly settle all outstanding taxes to the government. Do charitable works. Page 6


Tour and Travel Division:  

Prepare to take the company public by seeking the services of an appropriate investment bank.

As a global media organization with a view to running the show, World Tribal Hero, there is every need to allocate sufficient funds to meet the costs of air travels, hotel accommodations, and life insurance covers. Recruit as many talented staffs as possible in other countries to always reduce the costs and risk of travel.

Business to Business (B2B) Division:   

Shares & Stocks: As a matter of corporate policy, use common and preferred shares to pay off business transactions in the world over, to have enough partners in the same industry as affiliates in business. Product Quality: Ensure that the services and products of RCN meet with the expectations of other business organizations. Marketing: Engage the print media, TV, radio, social networks, billboards, events, student activities, publications, and so on to create awareness of the organization. Do this and take along the branded products and services of business sponsors. Management: Products and services should be promptly delivered. Budgets must be placed under tight scrutiny and control. Legal and accounting advice concerning new development or budgeting should be taking seriously, such as corporate laws and copyright/ trademark requirements. Adequate staffing of various departments is paramount to the success of the organization.

1.3 Vision, Mission, Value:    

Vision: To explore international tribal values and use them to amuse global audiences. Mission: To identify and harmonize all the tribes in the world over. Value: To set higher standards on media entertainment. The Corporate Agenda: Reality Cable Network Ltd and all of its stakeholders, including the Board of Directors, staffers, and other affiliates will set high standards of etiquette in running the day-to-day affairs of the business organization. Loyalty, honesty, and respect will be accorded to clients, workers, and investors. The purpose of this business plan is to ensure that the rightful business partners, not excluding investors, shareholders, and bankers, to develop the business concept, and have great market share from the world at large. If Comcast Page 7


Corporation, The Walt Disney Company, News Corporation, Google Inc., and Viacom Inc. can make it day in, day out, then RCN is also equal to deliver on its promise. As a company limited by shares, the company has a legal entity to run its course. The resources apportioned to the organization are nothing other than assets held in trust by the Board of Directors. The boards of directors have an all-encompassing vision that the media is a great cash cow, especially the entertainment sector. For example: On June 11, 2002, Ford Motors and Coca Cola invested USD10 million in the business of the stakeholders of the company, they turn it around to USD700 million. Then years afterwards, the trend continues to grow as technology and the Internet services improve globally. The Board of Directors of RCN cannot wait to see this development happen to its organization and prospective investors. The idea is to build the organization to the ranks of the top-five media houses in the world. This will require a great deal of focus, personal sacrifice, and perseverance to reach that destination. The other goal of the board is to drive the organization into becoming a publicly traded company in three to five years of being in business. 2.0 Company Summary: Reality Cable Network Ltd (RCN) is a registered media organization that is limited by shares. It is a good start that the Registrar of Companies approves share allotment to the company worth USD100 million. Nevertheless, from the vision of the founders and directors’ point of view, this is in no way going to match the revenues, profits, and equity that the company will be holding at the end of its first year in business. Therefore, there is every possible reason to contact the Registrar of Companies in Ghana to raise the bar when the time is due. Since Reality Cable Network Limited (RCN) has a view to go into TV broadcasting and media franchising at the end of its first year in business, revenues will accrue three-fold. Besides, with the company having a view to procuring numerous media houses in the world over, its revenue and incomes will grow exponentially year in, year out. The company is founded and administered by people with a vision for the future. The boards of directors believe that any capital or assets put in trust on them are vital resources with which to grow the company. RCN is founded on the notion of getting into the league of the biggest five media organizations in the world.

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2.1 Company Ownership: Reality Cable Network Ltd (RCN) is currently a private company limited by shares. The three Board of Directors own 60% (USD60 million) of the company’s equity and other investors and shareholders will be apportioned with the remainder 40% (USD40 million). To meet its global needs of growth and expansion, Reality Cable Network Ltd (RCN) will be open to both local and foreign investors to own shares. As the law permits, all shareholders are jointowners of the company, privileged to attend board meetings, and have voting rights. 2.2 Company Locations and Facilities: Reality Cable Network Ltd (RCN) is currently located at HNO.F.209A, Orange Street, Ashongman Estate with offices at World Trade Centre, Accra. Presently, it has contacted Dean Foley, Real Estate Manager, of KHI 01 GH LTD, to lease two office units (#7 and #8) on the 5th Floor of the Movenpick Ambassador Hotel Emporium. The location of the new office serves to meet the needs of using the National Theatre for auditions and other business promotions. To lodge victorious contestants of the reality show at the rooms of the Movenpick Ambassador Hotel, and to be at an accessible location when shooting of the reality show commences in 2013. Besides, this office location is in close proximity with banking facilities. The point is to have a classy business centre for use as a virtual office for executive meetings and as a nerve-centre for the Board of Directors to use as office space. From this office, and working eight hours a day, the three directors of the company are geared to realize the annual revenue of USD3 billion in sales.

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2.3 Start-up Summary: Expenses and perpetual financing for the business start-up are shown below. Table: Start-up: Description

Amount

Requirements Start-up Expenses: Auditors Virtual Offices Internet Legal

$2,000 $61,050 $250 $10,000

Total Start-up Expenses:

$73,300

Start-up Assets: Cash Required Laptops Range Rover Evoque (3) Furniture & Fittings (offices)

$9,000,000 $ 4,200 $150,000 $ 63,000

Start-up Assets to Fund

$9,217,200

Total Requirements

$9,290,500

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Table: Start-up Financing Description Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets

Amount $73,300 $9,217,200 $9,290,500 $0 $67,209,500 $3,500,000 $0 $80,000,000

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities

$70,000 $0 $0 $0 $70,000

Capital $79,930,000

Planned Investment Investor 1 Investor 2 Investor 3 Total Planned Investment

$10,000 $10,000 $10,000 $79,960,000

Loss at Start-up (Start-up Expenses) Total Capital

($30,000) $79,930,000

Total Capital and Liabilities

$80,000,000

Total Financing

$80,000,000

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3.0 Products and Services: As stated in the Company Summary section, Reality Cable Network Limited (RCN) is into three business divisions. They are TV Broadcasting Services, Media Production, and Media Franchising. These three areas are basically what all the top-notch media organizations are using to make money in the world over. Therefore, the company stands to grow in leaps and bounds by capturing 2.02% market share. 3.1 Product and Service Description: 

Services include:

         

Writing movie scripts for other reality shows. Selling branded goods for other media organizations. Applying for TV-licensing for start-up media organizations. Producing video coverage for event-organizers. Supplying media-production equipment to media organizations. Funding small scale projects Distributing DVD and films for movie producers Partnering and supporting media organizations Branding products for other media networks Retailing DVDs and movies

Products include:

    

Producing DVD seasonal videos Producing movies Producing RCN-branded T-shirts, hats, boxers, etc. Magazines and books Contestant photo albums

3.2 Competitive Comparison: Reality Cable Network Ltd (RCN) will always go for the best expertise, equipment, video, and DVD productions. The nature of its business is to give value for money. From the commencement of the business, it will choose the best investment banks to deposit money and seek financing, giving Common Shares, Preference Shares, and Bonds as the case may be. It will also purchase shares from the top-five media houses to generate passive income and enable them to procure shares in RCN. There is a goal to establish the next best TV station in the period 2013-14. Its current reality show is the biggest in the world and geared towards entertaining 1.4 billion viewers worldwide. This vantage point will yield billions of dollars in advertising revenues more than any Page 12


existing media network in the world. Sooner or later, it will commence franchising for the best media houses on the planet. 

Home Division:

The company will endeavour to partner as much as possible with all media houses in Ghana. Where adequately capitalized, the firm will buy out some of the media organizations and upgrading their standards. The reality show, World Tribal Hero, will be first of its kind in Ghana. Once the shooting begins, the company will employ many local talents, thus alleviating the problems of unemployment in the country. The foreign broadcast rights will accrue a lot of foreign currency to the local markets, and RCN will be among the top taxpaying companies in Ghana, estimated at USD600 million annually, thus boosting the growth of the local economy. 

Tour and Travel Division:

This department will embark on journeys to other countries to set up off-shore bank accounts and subsidiaries for RCN. It shall also participate in launching ceremonies abroad. The department will make sure that foreign rights are sold to every valid country in the world. The staffers in this department will oversee all travel arrangements amongst crews, contestants, and business invitees. 

Business to Business (B2B) Division:

From the start, Reality Cable Network Ltd will allocate shares to the big five organizations to partner in its flagship of growing the company to a big player in the industry. Thus, RCN will stand a good chance to benefit from their knowhow or expertise. RCN will also tie up with Facebook, Twitter, and YouTube as channels to promote its business objectives and funding-partner interests worldwide. 3.3 Sales Literature: Flyers, bulletins, blogs, websites, subscriber emails, magazines, and books will be published at regular intervals to reach out to the corporate world to place advertisements on the reality show, World Tribal Hero. 

Fulfillment:

Published materials can bookshops worldwide.

be

purchased online, Amazon.com, eBay, and

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3.4 Technology: The company will be using state-of-the-art technology in producing feature DVDs, movies, and other video coverage. For office use, Windows and Macintosh can be used for processing information. Macintosh products are used primarily for video editing, and loading video onto websites. RCN will also use all the necessary components for a digital video production center, including cameras, mini-disc recorders, microphones, and lights. Usually, some media organizations lease the equipment for use at a minimal price. Subsequently, the company will include DVD-R drives on its computers, to enable the firm to copy DVDs, rather than simply recording VHS tape. Furthermore, standard computers, scanner-copier-printer centers, electronic faxing via the Internet, cell phone, DSL Internet subscriber line and several video tape recorders of various formats, including Beta SP, SVHS, DVC, and 3/4" will be procured as useful materials to develop the business. These facilities are capable of posting essential stories onto the Internet and to be downloaded directly to other TV stations who procured the company’s foreign rights. These resources will eliminate the need for hard tape, and would give the stations instant access to TV series that they can easily download to their specific tape format. 3.5 Future Products and Services: Within the next five years, the company will add storefronts worldwide, all following consistent guidelines in the business system. The firm will franchise these stores globally. Thus generating about USD200 million worldwide. The organization will also add the production of travel news to its line of products. This angle of business can have up to 150,000 subscribers, and will yield almost USD3 million in advertising revenue annually. 4.0 Market Analysis Summary: 

Home Division:

In Ghana, a great deal of media houses is being issued with TV Broadcast licenses. A few of them have the licenses, but cannot have the necessary equipment to telecast their shows. Thus, RCN will approach these insufficiently funded companies with buyout propositions, acquire their licenses, and pursue the goals of having as many TV stations as possible under its brand. However, many TV stations are up and running with different TV shows. These functional stations will most likely procure the rights to air the World Tribal Hero. In Ghana, by issuing broadcasting rights to numerous TV stations and having a Page 14


share of advertising revenues from local TV stations, about USD15 million will accrue as revenue to the company annually. 

Tour and Travel Division (Home Division):

Country tours will be organized with popular contestants of the World Tribal Hero. These tours will require local artists, musicians, and acrobats to come and perform. Tickets will be sold during these events, and up to USD75,000 can be generated from these country tours. Camera crew will go from region to region to select performing tribal heroes, and shoot videos. 

Business to Business (B2B) Division:

Reality Cable Network Ltd (RCN) has a long-term goal of becoming the dominant media house in Ghana and Africa in general. Should this be a viable course to take, RCN will have to establish good rapport with other media organizations, sell shares of the company to them, and then contribute to the overall growth of every other TV station. 4.1 Market Segmentation: Reality Cable Network Ltd (RCN) has identified three broad markets: The home market, the foreign market, and the web-based market. The home market will give the company sufficient revenue to meet its overhead costs annually, whilst the foreign market will lead the company to enormous growth. The webbased market is another huge market from which revenues will accrue to the company in drones. Other elementary markets are book and album publishing of reality show contestants, telephone and email voting, and computer games. 4.2 Target Market Segment Strategy: 

Home Division:

Reality shows abound in the world over. However, the sector is not fully explored yet. For example, Survivor, American Idol, and the like simply focus on the American market with a limited forty (40) million viewers. However, Reality Cable Network Ltd targets all the countries in the world, including America, to have a viewership of 1.4 billion. This is only a conservative viewpoint since more than 20% of the global community will be interested in the performance of their tribal delegates. 

Tour and Travel Division:

The three directors of RCN will be up and running due to the fact that the corporate vision has to be put in practice and there must be harmony among all Page 15


participating countries. The need will always arise for the Tour and Travel Division to arrange broadcasting rights for suitable TV channels in any country in the world. 

Business to Business (B2B) Division:

There will be a need to find local talent or expertise in all countries in the world to manage and run the operations of the company. RCN will be teaming up and working with relevant TV stations. Besides, a research unit will always keep tabs on the trend of reality shows worldwide. RCN is currently having partnership arrangements with GTV and Multi-TV in Ghana to air the show and retail licenses to other local TV stations. 4.2.1 Market Growth: 

Home Division:

In the media industry, growth rate is almost always exponential. If Comcast Corporation can make up to USD55 billion in twelve calendar months, it then means that on the average they are making USD4,583,333,333.33 monthly. With a nerve-centre set up for RCN and the relevant tools put in place, the financial growth will be obvious almost immediately. 

Business to Business (B2B) Division:

Reality shows worldwide are generating huge sums of money in revenues in their local and international markets. Advertising revenues average USD800 million annually. Google, Yahoo, and Facebook derive billions of dollars in advertisements. Reality cable Network Ltd (RCN) will engage the CEO of Delivery Agent Incorporated, Mr. Mike Fitzsimmons, to run the affairs of the website of RCN. Delivery Agent Incorporated currently hosts the websites of CBS, NBC, FOX, and Discovery, and they are raising substantial revenue into the coffers of these corporations. The company will also partner with Mr. Tadashi Ishii, President and CEO of Dentsu Incorporated, to sell its media rights worldwide. Dentsu Incorporated, based in Tokyo, Japan, is into branding and corporate identity, consumer insights, design, digital, marketing, market research, media planning and buying, public relations, relationship marketing, and realized ¥1.678 trillion in revenue in 2010. 4.2.2 Market Needs: 

Home Division:

The reality show market needs a proficient agency that will collect advertisement revenue on their behalf, especially an investment bank. It also Page 16


needs a powerful branding organization, such as Wolf Olins, based in London, New York, and Dubai. The company specializes in developing brand experiences, creatively-led business strategies, and visual identity systems, and has worked in sectors including Technology, Culture, Retail, Energy & Utilities, Media, and Non-profit. Reality Cable Network LTD (RCN) also needs an investment bank that can issue share certificates on its behalf, provide, at least, USD80 million on standby overdraft facility, and work creatively alongside with the Board of Directors of RCN. All granted bank overdrafts instantly translate into Common or Preference Shares. 

Business to Business (B2B) Division:

To set foot in the global field, Reality Cable Network LTD (RCN) needs, at least, USD25 million invested in the five most lucrative media organizations in the world. This will make way for the Board of Directors to sit in at meetings with the management of these conglomerates. Thus, enabling Reality Cable Network LTD (RCN) to be up-to-date with what is going on in the industry. It will also ease the approachability of these firms, being shareholders. RCN also needs to reciprocate this gesture by way of giving free bonus shares worth USD5 million to these media giants to rope them in to the firm. 4.2.3 Market Trends: 

Home Division:

In the media world at present, reality shows are hot cakes in many fronts, including America, UK, Canada, Australia, and Ghana. In Ghana, the reality shows being aired are not generating revenues as it does in the West, simply because the media organizations do not harness the full strength or the potential of their products. RCN has come to stay. It will set the pace for other media organizations to follow. RCN is looking into building one of the largest and best theatrical buildings in Accra, Ghana, to take the entertainment industry ahead of time. The building will make room for shopping centres, movie halls, offices, hotels, banking hall, serviced apartments, and food franchises. It will in itself generate millions of dollars in revenue as an asset to the firm. 

Business to Business (B2B) Division:

The richest media organizations specialize in Mergers and Acquisitions (M&A). They do not only focus on their areas of specialty, but look into the market values of other media organizations, and buy them out. RCN will pursue this agenda to the fullest, since it is the most rewarding way to raise capital, expand infrastructure, and have influence at the marketplace. Page 17


4.3 Service Business Analysis: 

Home Division:

Reality Cable Network Ltd (RCN) will spread out in its service areas to cover TV broadcasting services, media production, and media franchising. It will look into the needs of all the big media organizations, engage expertise, and resources to meet these requirements. In Ghana, the clout of the media is not yet as strong as the West. Therefore, RCN will endeavor to bring to the attention of almost all the media organizations in Ghana to upgrade their systems, create more fanfare, and generate revenue by so doing. This will boost the local economy. 1. Production companies: RCN will be working with the best production companies in Ghana, starting with award-winning TV production company, namely LTV Films Ghana. 2. Photography companies: RCN will also work diligently with award-winning photographic companies in Ghana and abroad, especially to produce the photo albums for sale at the open market. 

Tour and Travel Division:

Since RCN will undertake road shows, country tours, and special events, this department will be soliciting for branding rights, fund-raising for charities, and the selling of RCN-branded products. 

Business to Business (B2B) Division:

RCN will be producing reality shows for other media organizations, such that will bring in extra revenue to the company. It will run different programmes on other networks and generate revenue from advertisement. RCN shall also go into movie productions. This angle of business generates hundreds of millions of dollars annually to media houses. RCN is also looking at selling the products of notable media houses on its website. This area of generating revenues has always yielded billions of dollars to Amazon.com and eBay. 1. Marketing services for Other Networks: o Industry magazines: Since RCN will be publishing the memoirs of its notable contestants, issue travel guides on its own magazines, it will use this aspect to address major industry news and events. This will generate millions of dollars, like Time Magazine, if it is sold around the globe. Page 18


o Internet websites: RCN has approached webs.com to provide Internet services on behalf of the company. The website is due to launch. However, once finance is available, the Reality Cable Network Ltd will run the website, registering with a company-based credit card, issued by its banker. 2. News Programming: o Network-based programming: Affiliates belong to network news services which provide daily programming on hourly feeds. RCN is looking at creating a division that will air its own news and syndicate it to other media organizations at a price. o Subscription programming: For an annual rate, any affiliate may subscribe to these programming services. Their downside is in limiting the stories they offer to one specific topic such as healthcare, travel, or politics, rather than offering a wide variety of topics from which to choose. In addition, stations do not have a choice in which stories to run each day. Either stations can take one story daily from a satellite feed, or stations are sent a week of stories on tape. 4.3.1 Business Participants: 

Home Division:

RCN is looking at bringing all the best consultants in the media industry to bear on its services and products. Moreover, professional marketing and public relations organizations are veterans of the media world, and can go a long way to meet the financial needs of RCN in quick time.



Business to Business (B2B) Division:



Student Services:

To attract a lot of audiences, student power is indispensable. The numbers of students in the world over are in hundreds of millions. By looking at products that interest students worldwide and adding them to the sales tactics of the company, much awareness can be created, and sales will sky-rocket as a result of these features.

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TV Station Services:

While there are many production companies, few offer news to TV stations. Most programming services are based in larger markets where their products have taken hold. They offer topic-specific news for TV stations nationally and internationally, and at a high cost. Most generate stories by one well-known personality and offer only one story possibility per day. They make the majority of their revenue from mid-to-large markets. They have a strong position in the industry, and because they are topic specific, do not threaten each other. Internet news on demand, where viewers can watch their favorite stations from their home computers, is the biggest threat to well-established media firms. Therefore, RCN will be looking at exploring both avenues to broaden its revenue base. 4.3.2 Distributing Services: 

Home Division:

The public are accustomed to going into retail locations to make purchases or place orders for DVDs, branded T-shirts, and Boxers. Having an RCN storefront will provide them with the opportunity to purchase RNC featured products. RCN will host presentations to explain its products at various outlets such as retirement villas and apartment clubhouses. 

Business to Business (B2B) Division:

Usually, TV Stations buy newsfeeds directly from programming sources. A sales representative may call or visit a station for a programming product, or the station may purchase directly via the RCN website. Initially, it will be vital for the staffers of RCN to visit one-on-one with small market stations to obtain a base clientele. Those stations across the country will be targeted via telephone and direct mailing promotional kits. Those stations which responded to RCN initial marketing survey are prime, first clients, especially those who have already defined their needs according to the company’s surveys. 4.3.3 Competition and Buying Patterns: 

Home Division:

As with any retail line, TV broadcasting services in Ghana feel more comfortable and believe they are truly getting their money's worth when they are given one-on-one attention. It is this attention that RCN will give to them in its 30minute free consultations. RCN prospective clients will be more inclined to refer its businesses and products to friends and family members if they believe that the company does not see them as simply a sale, but as people with needs Page 20


being met. This initial attention to detail will also provide RCN clients with the knowledge that the company will produce exactly the videos that they have in mind. 

Business to Business (B2B) Division:

TV stations are prone to purchase news stories based on the bottom line. If one programming service becomes too expensive, the station will spin off to another programming service for a few thousand dollars less. Small market TV stations do not have this option, as most services are too expensive for their budgets. RCN will offer quality news stories at a very competitive price. In fact, half the cost of most other programming services in order to gain access to those smaller markets. In addition, having a variety of news topics makes RCN a hot choice. Stations do not have to spend thousands for only one brand of news, i.e., health stories. They can choose from a wide variety, health, politics, financial, innovative, unusual, personalities, etc. 4.3.4 Main Competitors: 

Home Division (TV Broadcasting Services):

Channels Showing Reality Shows:

Strengths: In Ghana, the Channels showing reality shows basically buy the programmes from outside sources other than making their own productions.

Weaknesses: Most TV stations do not bother to show reality shows because they neither can produce one nor obtain the broadcasting rights of trendy reality shows in the market.

Independent Companies:

Strengths: RCN is modeled as an independent company with creativity and gusto. It can easily source for capital, and compensate its financiers in leaps and bounds. Currently, it gives 100% returns to financiers, 20% bonus on capital sum, and annual dividends to financiers with Common Stocks or Preference Shares. RCN jump-starts its business by taking onto the model of the big five. It will sooner or later be in the same league with them, having the backing and support of hedge-fund managers.

Weaknesses: Due to time constraints and the need for finance, the objectives of RCN cannot readily be implemented to quickly capture market share. Page 21


5.0 Strategy and Implementation Summary: 

Home Division:

1. Reality Cable Network Ltd (RCN) will commence a one-and-all campaign to create awareness for its products and services. The marketing efforts need to focus on (a). Introducing the new global reality show, World Tribal Hero (b) Telling our audiences worldwide why they and their friends need to watch it. 2. Emphasize excellent service, great quality, and lasting satisfaction. Especially as this is a fairly new product to be launched into the market, viewers need to know that the company will cherish their memories and create quality products. 

Business to Business (B2B) Division:

1. Tap into the most lucrative sources of revenue by modeling the big five media houses. 2. Building enormous capital by selling Common Shares and Preferred Shares. On occasions, issue large-scale bonds to investors and other public institutions. 3. Work with seasoned industry experts. 4. Have great political figures to advise on administrative policies and issues. 5. Cut the chase by trying as much as possible to be number one in the media business. 6. Give the best returns to investors, financiers, and stock-holders. 7. Create a great corporate culture and governance structure. 8. Make an impression with the company’s model of screenplays. 5.1 Competitive Edge: 

Home Division:

The competitive edge of producing reality shows in the company business system, which allows it: (A). To produce large numbers of DVDs while retaining quality, thus giving more customers a grade A product with a short turn-around time. (B) To maintain consistency at every location, so customers can be assured that they will get the same quality at one store that their friends/ family members have received at another. (C). To use the largest media distribution network to capture the global market for film and DVD sales. (D). To work in close proximity with an investment bank that establishes a corporate bank account for RCN.

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Business to Business (B2B) Division:

For TV stations, RCN’s competitive edge is having a variety of news topics to offer, and at a much more affordable cost to small market TV stations than larger programming services can offer. For Media Production, the company’s competitive edge is to have the best and all-encompassing reality show to touch the lives of all on the planet. For Media Franchising, the company will sell its branded products and those of other media houses to have a great deal of market share. 5.2 Sales Strategy: 

Home Division:

1. The company needs to sell the memories and emotions of these reality show productions, not the products per se. While RCN produces DVDs and movies, the company creates and taps into a lifetime of emotions cherished its customers. The advertising and marketing need to reflect this concept. 2. The board of directors and other staffers need to understand exactly what the services of RCN are, so that its customers will also understand. The customers must feel confident that the corporation values their memories and emotions as much as their own, and will treasure them individually. An order for a DVD or movie is not a product order, but a piece of family gold that the company is holding in safekeeping. 

Business to Business (B2B) Division:

1. RCN needs to sell both the company and the product. As this is a new venture into an antiquated system, generating sales will require an enthusiastic approach in order to renovate the TV news programming concept. In-person sales are essential in the primary stages of generating sales. A reputation for service excellence, news variety, and affordable pricing will continue the momentum of sales in the future. 2. RCN has to sell its products, services, and support to schools, hospitals, and other charities to make waves in the local and international markets. Gaining the support of deans and professors is a vital element to generating inventory on a yearly basis. By developing a loyal clientele of professors, RCN will ensure continued sales growth annually.

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5.2.1 Sales Forecast: The annual sales forecast is estimated at USD3 billion. This does not include other miscellaneous incomes. 5.3 Strategic Alliances: 

Home Division:

Strategic alliances with TV production companies, DVD-distributing firms, media consultants, and TV stations worldwide will be key to generating sales in the first few quarters. RCN plans to initiate a co-marketing campaign, by possibly adding on 30-second commercials at the end of each video, promoting a wide variety of its products. These will be tasteful and placed at the end of the tape, but it will also co-promote its institutional investors. In the future, RCN can sell these spots to like businesses to generate revenue. Additionally, RCN alliances with retirement villas will be instrumental from startup. While these will not involve co-promotions, it will be necessary to build a strong relationship, so the villa officials welcome RCN to their facilities. 

Business to Business (B2B) Division:

RCN heavily depends upon building a strong alliance with the top-five media organizations to create substantial inventory to generate sales. The greater the size of inventory, the greater the variety the company has to offer stations and the public. RCN needs to concentrate on making as many contacts with advertising agencies as possible. If RCN cannot offer consultancy and public relations firms a marketing position, then it will have to market its own products in different media outlets. After the first year, the sales inventory will grow at a consistent rate. However, the first year's inventory size can well determine the company's sales success. 5.4 Marketing Strategy: 

Home/Travel Divisions:

1. Build relationships with primary target corporate clients/ customers (Market Segmentation section) and like businesses, such as Comcast, NBCUniversal, NBC, and Multi-TV. 2. RCN shall emphasize service and quality while building a strong referral base.

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Business to Business (B2B) Division:

1. 2. 3. 4.

Emphasize variety and affordability. Emphasize service while building relationships. Focus on tribes with TV stations and broadcast communications programs. Focus on small market TV stations, bottom 115 Nielsen markets.

5.4.1 Positioning Statement: 

Home Division:

RCN will position itself from the start as a strong media organization, wellcapitalized, and meeting milestone after milestone. RCN will break into all TV markets and garner market share. It will take great care of the needs of its sponsors, financiers, and shareholders. This will speed up the success of its future businesses and take the company public someday in the no distant future. 

Business to Business (B2B) Division:

RCN will sell its shares to other media organizations, and it will buy shares in these firms as well. During the time that RCN remains a private limited liability company, it will rely mainly on its bankers for financing activities, and grow the company to a level that it will be well-capitalized to take care of its investing needs. RCN will also get into co-sponsorship deals to make name for the brand, and possibly accrue miscellaneous incomes from so doing. 5.4.2 Pricing Strategy: 

Home Division:

RCN business system has helped define its pricing strategy. By making the productions both time-efficient and consistent in high quality, the company can maximize its pricing to acceptable market levels. RCN strategy is based upon the fact that the company is introducing new reality show formats into the marketplace, with no previous history for doing so. As RCN filming style becomes more popular, the organization will be able to adjust the pricing accordingly. We are offering different packaging styles from which the company’s clients/ customers can choose. By charting the most popular package, the company will better determine the right price for its products. 

Business to Business (B2B) Division:

RCN’s pricing strategy is key to its offering. If RCN charges too much, or even 3/4 the price of larger programming services, the company is undercutting its Page 25


potential orders. The market of small market stations cannot bear the higher prices offered by larger programming services. Likewise, by offering a free resume and marketing service to different tribes on the Internet, RCN is ensuring the continuity of interest on its products and services. The organization needs to be positioned to offer in advance payment for most of its products and services to create room for greater cash flow. 5.4.3 Promotion Strategy: 

Home Division:

Initially, the company will depend upon presentations relationships to reach new corporate clients/ customers.

and

business

1. Retirement villas "social nights:" RCN will invite people from retirement villas to attend certain nights set aside at those locations for residents and family members in which the firm will present dinner nights, musical presentations, and photo memories through discussions and brief video presentations. 2. Photographers, photo processing centers, and travel agencies: RCN will form business referral relationships with like businesses to promote its product and services. 

Business to Business (B2B) Division:

RCN depends on direct contact with Kings, Queens, princes, princesses, village heads, deans, and professors as its main way to reach out to contestants. That way of reaching out will be made to all tribes. 1. Promotional Kits. RCN will be sending colleges, universities and technical schools with TV stations on campus promotional kits which will include its objectives and student guidelines for various shows. 2. Campus Visits and Phone Calls. RCN will contact the elites to gain the support needed from tribal men and women, who in turn are encouraging their kind to partake in the making of the World Tribal Hero show. 5.4.4 Distribution Strategy: 

Home Division:

RCN’s primary distribution of DVDs, films, and branded products will be through its storefronts in various countries, which will also be the order centers, consultation locations, and production offices. To make it easier for clients/ Page 26


customers at retirement villas, RCN offers to accept orders at and deliver to these locations. 

Business to Business (B2B) Division:

RCN distribution will focus mainly around its website, taking orders and processing them through direct mailings. In the initial period, the company will be distributing DVDs during person-to-person presentations. RCN is prepared to mail on order, via the USPS. Stations may order for regular deliveries, up to overnight shipments, depending upon their needs. 

Milestones:

Part of the business's success will be based on planned tasks and timely completion of DVD productions. 6.0 Management Summary: Reality Cable Network Limited (RCN) is wholly owned and operated by its founders, Selassie Nyadzi (Director of Corporate Affairs), Paul T. Patrick (Director of Finance), and Herbert Tombia (Director of Administration. It is a start-up with immediate plans for hiring top-notch management team. Each employee's responsibilities will be outlined in the company’s business system "Operations Manual." The company will be running with three high-profiled personages, including Hon. Zita Okaikoi (Former Minister of Tourism and Information), Dr. Ekwow Spio-Garbrah (Former Minister of Education, Communications, and Mines and Energy. Also, Ghana ambassador to the United States of America), and Ms. Cecile Frot-Coutaz, Chief executive, FremantleMedia Ltd, a division of Europe's largest TV, radio, and production company, Bertelsmann's RTL Group. As the company grows in leaps and bounds, the board of directors will evaluate which positions need to be filled first. Long term growth includes plans for a Chief Executive Officer (CEO), who will report to the Director of Administration and handle all corporate operations. Three managers will answer to the CEO, one per division. Each manager will be primarily responsible for accounting and marketing within his/her division, and will handle all hiring/training needs. RCN currently receives a great deal of advice from outside sources, such as its accountant and attorney. However, the organization follows the advice, which best meets its goals and needs.

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6.1 Organizational Structure: As a start-up, the divisions and departments are inter-related and handled for the most part by Herbert Tombia. With time and revenue, the firm will expand to accommodate several departments: Sales & Marketing, Service and Administration, Product Development, and Finance. Each division manager will fill these departments according to specific needs and the company's business system operations manual. The following chart outlines the anticipated organizational set-up for the first three to five years of Reality Cable Network Ltd (RCN). Organizational Chart:

Chairperson Board of Directors

Chairperson Advisory Board

Director of Corporate Affairs

Chairperson Foreign Advisory Board

Director of Administration

Director of Finance

Chief Executive officer (CEO)

Managing Director Sales, Promotions, & Marketing

Managing Director Tours and Travel

Managing Director Human Resources

Public Relations Officer PRO

Customer Service Center

Investor Relations

Corporate Clients and Customers

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6.2 Management Team: Selassie Nyadzi: In charge of corporate affairs. He is great at managing human and material resources. He has being an actor in the TV sitcom shows. He will handle all corporate matters of the firm, in and outside the organization. He is a great entrepreneur to reckon with. Paul T. Patrick: Excellent businessman. He has been in the import and export business and has great managerial skills. He will handle the financial matters of the organization. His business know-how and entrepreneurial skills are indispensable to the success of the organization. Herbert Tombia: A lawyer turns into businessman. He has operated an investment company, information technology firm, and real estate businesses in different countries worldwide. He is proficient at managing businesses, and remains in charge of administrative matters, including recruitment and termination of appointments in the company. He is an entrepreneur at the core of his being. 6.3 Management Team Gaps: The Board of Directors believes that the organization has strong leadership for developing the concept behind Reality Cable Network Ltd (RCN). At present, the weakest area is finance and corporate resources to meet the needs and targets of the company. RCN has hired Ernst and Young Ghana to advise on accounting and business development matters. Besides, by hiring the guidance of Hon. Zita Okaikoi, Dr. Ekwow Spio Garbrah, Ms. Cecile Frot-Coutaz, the company will be in a good footing to handle all of its business affairs with excellence. 6.4 Personnel Plan: 

Benefits:

The Board of Directors resolves to hire the best talents available worldwide. In this way, all departments will be fully functional. This will enable the organization to grow at a very fast pace. In the end, the company will realize all of its significant objectives.

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7.0 Financial Plan: The most important element in the financial plan is the critical need for capital to assist in business operations through the remaining start-up process, and to maintain a positive cash balance for the first fiscal quarters in 2013. RCN does not anticipate any changes to its financial plan through accounts receivables or inventory, as the company operates upon the "payment upon receipt" principal for all goods and services. During the past four months in the start-up process, the directors have largely committed to incorporating the company and sourcing for financial opportunities with personal credit lines and long-term loan options. 7.1 Important Assumptions: The financial plan borders on important assumptions. The key underlying assumptions are: The company assumes access to equity capital and financing, sufficient to follow and maintain its financial plan. The directors anticipate their financing to hold higher long-term interest. They also assume that as the company grows, it will be able to utilize a larger credit line, decreasing its expenses in cash. Likewise, its short-term credit line will be available with a lower short-term interest rate, making more cash available. The directors assume many TV markets are, or will become, Internet proficient. They also assume that most tribes will become Internet proficient in the future. The majority of its long-term payments are for one time, or long-term purchases, which will not need replacement in the first five years. 7.2 Key Financial Indicators: RCN estimates consistent turns on inventory, as its inventory is available for sale on a constant basis. The company’s Gross Margin increases with increased sales, but as the firm has a very low direct cost of sales, this number will only increase fractionally compared to the selling of less tangible assets, such as broadcasting rights, branding, and franchising. Sales and Operating Expenses are the company’s closest measurements in its forecasts. While sales increase dramatically, operating expenses increase with new stores, additional employees, and taxes. However, by maximizing the number of employees within each store, the organization is also maximizing its location and limiting further expenses that additional storefronts would incur. RCN is also able to save drastically on advertising and promotion expenses, which will naturally increase with each new location. Page 30


7.3 Break-even Analysis: The company assumes running costs which include rent, utilities, office expenses, and an average of travel, advertising, and miscellaneous costs. Miscellaneous costs are equal to quarterly costs such as business TV series and movie productions, branded products and consultancy, and occasional equipment rental. Payroll increases every other month as the firm adds new employees. 7.4 Projected Profit and Loss: Profit and Loss projections look very good, with the usual start-up investments limited to the first three months. 7.5 Projected Cash Flow: Cash flow projections are good. There are only three months of negative cash flow for the foreseen first year, and the all-important cash balance shows steady increases. 7.6 Projected Balance Sheet: The assets in the balance sheet will show steady increase in net worth over the life of the plan. 7.7 Business Ratios: Business ratios for the years of this plan will all be positive over the life of the plan. Conclusion: Reality Cable Network Limited (RCN) is already incorporated. The Registrar of Companies, Ghana, has allotted USD100 million in corporate shares to raise capital to run the company. The Board of Directors retains 60% of the approved corporate shares as equity and ready to give out 40% to other shareholders. However, should MTN and Stanbic Bank finance this project with an estimated USD83.5 million, the Board of Directors will have every reason to approach the office of the Registrar of Companies to raise the corporate shares to USD208,750,000. This will be convenient for all parties. The Board of Directors have also resolved to instantly issue USD7 million to MTN as Preference Shares; and USD160 million to Stanbic Bank as Preference Shares, too. At the end of the trading year, with sufficient cash flow made available, these liabilities will Page 31


be settled by way of buying back the shares. Nevertheless, it is up to either corporation to retain its share portfolio until further notice. ***

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Reality Cable Network Ltd-Business Plan