BUSINESS PLAN
I am creating an exciting new online business helping 401K investors to achieve the retirement of their dreams. While still in the embryonic stage, this business is beyond the idea/concept phase. I have been testing online ads and offering my paid subscription service since the middle of 2023.
Customer feedback has been excellent, and the advertising metrics are very good at this point. I am looking to obtain a $230,000 capital investment from an angel investor(s) to expand the business.
My projections anticipate a business with very high profit margins and a business value of over $13 million within the first ten years.
Beyond Buy & Hold was created to help the millions of 401K investors in the United States to better manage their 401K investments. The business provides ordinary 401K investors with access to investing tools and data that has only been available to wealthy investors or large financial institutions. We want to help all hard-working Americans to achieve the retirement that they deserve.
VISION STATEMENT
We have a serious 401K problem in this country. The average 401K investor only generates investment returns of about 5% per year. The people we work with do a little better at around 6.5% per year, but this level of returns is not sufficient for people to be able to retire comfortably at age 65.
The typical 401K investor is confused and frustrated by the investing world. People are not trained in how to invest and if they were trained, they were trained poorly. The investment services industry does not offer good solutions for ordinary investors, and, in fact, they have only confused people with their weak offerings.
I have created a simple and easy and better way for 401K investors to manage their 401K investments and I want to share it with the world.
EXECUTIVE SUMMARY
There are 60 million 401K account holders in the United States that are struggling with the management of their assets. The vast majority were never trained in investing and are very confused and frustrated. Most 401K investors do not even understand the various fund options in their plans never mind which funds that they should select.
Due to their lack of investing skill and experience, most American workers do not retire with enough money in their 401K accounts. The average 401K investor only generates average annual investment returns of about 5% per year when they can and should be earning twice that amount. They are forced to keep working beyond the age of 65 and/or they struggle to make ends meet in their retirement years.
These 401K account holders want more growth from their investments, and they want safety and protection from the damages caused by stock market collapses. The financial services industry does not have any effective solutions to meet the needs of 401K investors.
I have created a solution to meet those needs. The solution is a membership in an investing service that provides ongoing investment recommendations to 401K and IRA investors. The service includes ongoing education about the important aspects of investing.
Online businesses with a recurring revenue model are highly efficient and have the potential to be very profitable. The potential market size is very large, but it is highly competitive. Gaining even a very small share of this market should be very lucrative.
I have been testing the concept on a small scale for the last six months and the results to-date have been very promising.
OBJECTIVES
· Reach operating profitability by year three.
· Achieve 28% operating profit margin by year four.
· Achieve 45% operating profit margin by year five.
· Achieve 25% net profit margin by year five.
· Reach 1,000 customers by year five.
· Reach 10,000 customers by year ten.
KEYS TO SUCCESS
· Creating a successful customer acquisition program or programs.
· Acquire leads at less than $10.
· Convert leads to paying subscribers.
· Acquire paid subscribers at less than $320.
· Achieving an annual customer retention rate of at least 75%.
· Developing the right messaging strategy in all channels.
· Developing a brand that is trustworthy.
INVESTOR RETURNS
I expect the business to reach $4 million in annual revenue with a profit before tax of around $1.3 million within ten years. This should produce a business with a total value of over $13,000,000. The investor(s) that puts in $230,000 now would end up with a 25% share of that business value -roughly $3,300,000.
USE OF FUNDS
The $230,000 capital investment will be used as follows over the next two+ years of operation. Most of the funds will be used to fund losses ($135,000) in the startup phase. $50,000 will be used to pay off debt and $25,000 will be used in year two to fund a capital project to use Artificial Intelligence to automate some business operations. The remaining $20,000 would be used to test additional advertising channels. The exit strategy will be a sale of the business at the appropriate time.
COMPANY SUMMARY AND OWNERSHIP
Staffing requirements are very minimal to support this business so the business can be operated out of my home office. The company is structured as an LLC in the state of Massachusetts.
The company is currently 100% owned by Philip McAvoy. After the equity investment, Mr. McAvoy’s share will decrease to 75%.
MARKET NEEDS AND VALUE PROPOSITION
The investment solutions provided by the competition are very weak. 401K investors are seeking more growth from their investments and more protection against losses. Investors are frustrated with their investment returns and very disappointed with their investment losses coming out of 2022.
Investment advisors charge anywhere between 0.5% of assets to 1.0% of assets to provide very mediocre solutions. Their asset allocation solution has been around since 1952. It didn’t work then, and it doesn’t work now.
The new robo-advisors charge between 0.2% of assets to 0.5% of assets for their management fees for pretty much the same mediocre solutions as their human counterparts.
Most 401K investors have no training at all with investments. Most 401K investors are very frustrated and confused by all the noise and conflicting information in the investing world.
I see a big opportunity to provide better investment training and much better investment solutions to 401K investors.
My Beyond Buy & Hold system is effective and proven. It is also simple and easy for 401K investors. The service only costs $39.95 per month and should generate significantly higher investment return, thereby creating a retirement fund that will allow all workers to retire comfortably and securely.
PRODUCTS AND SERVICES
Our core product is a monthly membership that operates on a subscription model. For $39.95 per month, customers get ongoing investment recommendations for their 401k accounts. Because of the nature of our solution and its protection against losses in bear markets, all customers receive the same investment recommendations. This is not personalized investment advice. I am, therefore, classified as a publisher and not a financial advisor.
The membership comes with ongoing investment training and education, as well as periodic assessments of the stock market.
The online lead generation process includes several other low-ticket products like books, courses and PDF guides.
MARKET ANALYSIS and COMPETITION
The investment services industry is a massive industry with hundreds of billions in revenue. There is a significant amount of competition in this large space.
Wealthy investors are catered to by the big financial institutions and receive high levels of personal service and attention.
Many upper- and middle-income 401K investors often rely on financial advisors for their investment advice.
As mentioned previously, the major 401K plan providers (Vanguard, Fidelity, etc.) are now offering robo-advisor services to investors that are part of their plans.
The majority of middle- and lower-income investors handle their investments themselves. This is one reason why the average 401K investor only generates average annual investment returns of 5%. Most 401K investors have no clue as to what they are doing with their investments.
A large, self-help industry has emerged in the last 20 years offering investment training and advice in the form of books and newsletters and online courses. YouTube channels offering investment advice are some of the most popular channels.
So, the level of competition is very high, but the solutions and services offered are very poor. People are educating themselves as a result and they are starting to see through the nonsense being peddled by the investment industry.
Straight talk, simple talk and real solutions are very appealing right now. Building a level of trust and awareness in this space should lead to a very profitable business online.
The important segments of the consumer market are broken down by:
· Age
· Income
· Investment knowledge and experience
Our best customers currently are a little older (40+ years of age), have higher incomes and are more knowledgeable about investing. Many of our customers have tried and failed with two or three investment advisors.
Of the 60 million 401K investors in the United States, I am confident that we can acquire 0.02% of the market or 10,000 customers. This equates to $4 million in annual sales and over $1.3 million in annual profit before taxes.
MARKETING STRATEGY
This is and will be an online business. I will rely on the major social media platforms to acquire new customers and to grow the brand.
Facebook
Instagram
YouTube
LinkedIn
I have been testing Facebook and Instagram over the past six months and have had very good results. YouTube is going to be an important advertising channel going forward.
Advertising costs on LinkedIn are higher than the other channels but I expect the response rates to be higher as well.
Beyond those major advertising platforms, there are many other online advertising opportunities to be tested in the future.
I am still refining my messaging strategy to stand out in an appealing way in this market. Coming across as genuine, trustworthy, and authentic will be critical for success. The initial ad tests suggest that I am getting close.
Messages around simplicity and ease will also be critical to stand out and to appeal to prospects.
MILESTONES
Year one will be all about nailing the customer acquisition process and metrics on the Facebook platform. The lead generation process is in excellent shape after the testing I have done in the last six months.
The next key milestone is going to be converting leads to paying members (subscribers) in an efficient manner. I am getting close here but need four to six months of additional testing to nail this down.
Once the customer acquisition process is solidified, the next phase will be expansion. I will increase the advertising spending to bring on more customers. As the business expands, my focus will be on service and support so that I can retain as many customers as possible over time. This will require the construction of a membership platform. The platform has been chosen but the membership site needs to be created and populated with content.
Also in Year One, I plan on introducing a YouTube channel supporting the mission of the business. YouTube should be an excellent channel for developing and growing the brand.
In year two, I will continue to expand the business through increases in advertising and I will begin to test additional online advertising channels.
The key financial milestones are achieving profitability at the gross margin level in year three and achieving a net profit on the bottom line in year four.
MANAGEMENT EXPERIENCE/BACKGROUND
Phil McAvoy, the founder, is a former CEO from the retail industry. Phil learned from the best in the business as he spent the first 20 years of his career with the TJX Companies (TJ Maxx, Marshalls, Home Goods, etc.). Phil has a broad and extensive background in business management, operations and finance.
In his 30-year career in retail, Phil was known as an innovative marketer and was an early adopter of the internet for retail marketing. Phil is an expert in consumer internet marketing.
Phil’s frustration with the lack of solutions from the investment industry led to the creation of the Beyond Buy & Hold investing system. Phil first introduced the system as a hedge fund before focusing on the needs of the 60 million 401K investors in this country.