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1.0 Executive Summary
The purpose of this business plan is to chart the continued development of a sports agency based in Los Angeles, California. Sports Agency, LLC (“the Company”) was founded by Jonah Simmons. The Company will provide a broad range of representation for professional and up-and-coming athletes on the collegiate and professional level. The business will also provide investment management and financial planning for its clients. At this time, Sports Agency, LLC is seeking $200,000 via a private investment in order to launch operations.
1.1 The Services
The primary revenue center for the business comes from the ongoing representation of professional and collegiate athletes that are expected to turn pro within three years. The Company will handle contract negotiations while also providing ongoing public relations on behalf of clients. The Company will receive a fee of 10% to 15% on all income generated by the client.
In addition to providing contact negotiation and representation services, the Company will also manage investments on behalf of clients. It is no secret that many professional athletes often struggle with their finances once their careers are completed. The Company will employ qualified financial planners to ensure that clients maintain and growth their wealth. Many clients that retire are expected to continue to use the Company’s management services. These operations will produce highly recurring income for the business.
Chapter three of this document will further discuss the operations of this sports agency.
1.2 Financing
As stated above, the Company is seeking to work with a private investor in order to acquire $200,000 of startup capital. These funds will be used to develop the Company’s office in Los Angeles, capital to implement a marketing campaign to recruit clients, and general working capital. Given Mr. Simmons’ extensive contacts in this field, he will be able to quickly develop a expansive client base within the first six months.
Once the business becomes highly established, the Company could acquire additional capital in order to maintain offices throughout the entirety of the United States.
1.3 Mission Statement
Sports Agency’s mission is to provide its clients outstanding reputation that provides them with immense compensation for their athletic abilities. The Company is also committed to increasing the wealth of clients through its financial planning services.
1.4 Management Team
Jonah Simmons has been involved with sports representation for the past six years. He will be able to properly represent clients and their matters throughout the life of the business.
1.5 Revenue Forecasts
1.6 Expansion Plan
Mr. Simmons intends to develop numerous offices throughout the United States in order to recruit potential clients, especially up and coming athletes on the college level. The business will also expand its investment management operations as these services produce recurring income.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Sports Agency, LLC.
2.2 Required Funds
Mr. Simmons requires $200,000 to launch the operation of Sports Agency, LLC.
2.3 Investor Equity
An investor is expected to receive a 25% equity interest in the business.
2.4 Management Equity
Jonah Simmons will own 75% once the requisite capital is required.
2.5 Exit Strategy
Divesting this business to a third party will be a complicated process. A new owner would need to be properly introduced to all existing clients. It is expected that a transition would take 18 to 24 months. In this event, the Company will hire a qualified investment bank to manage the sale in tandem with Mr. Simmons.
3.0 Operations
As stated earlier, Sports Agency will provide a broad range of representation services specific for both collegiate level and professional athletes. Most importantly, the business will provide contract negotiations services. In regards to billing, the Company will receive a fee equal to 15% of all income earned. These fees may be reduced for clients that generate in excess of $10,000,000 per year. This service, as a value-added benefit to clients, will also include personal representation in regards to media matters. The business will act as the spokesperson for the client while concurrently administering their social media presence. As fans love interacting with players when they are off the field, Management sees a substantial opportunity to create a differentiating factor.
A major component of the Company’s operations will come from investment management services. There is an usually high percentage of professional athletes that have financial issues once they retire. The Company, as part of taking a holistic approach to helping its clients, will provide comprehensive financial management services. This will include financial planning, estate planning, college education fund management, and trusts establishment. This aspect of operations will produce recurring income from assets under management fees. It is expected that clients that were represented by the firm during the course of their careers will remain with Sports Agency, LLC for their financial management needs.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
At this time, the current outlook for the US economy is relatively strong. Although there have been significant issues with inflation, newly implemented monetary policies have caused a substantial abatement for this matter. Unemployment rates continue to surprise economists as they have remained at historical lows despite higher levels of inflation and interest rates.
Any issues with the economy will not impact the Company’s ability to generate revenue and remain profitable. Sports and sports entertainment demand remains strong in any economic climate given its relatively low cost. The Company’s clients will continue to need comprehensive representation and management as they progress through their careers. Additionally, as a function of revenue, the Company will have controllable fixed operating costs.
4.2 Industry Analysis
Currently, sports agencies generate in excess of $18 billion per annum. There are 35,000 companies that render these services. It should be noted that some sports agents concurrently work as an attorney for the client. The Company will not operate in any legal capacity when representing a professional athlete.
One of the common trends within this industry is to work in an integrated capacity as it relates to concurrently providing public relations management, investment management, and social media management. As discussed earlier, Sports Agency, LLC will integrate all of these services into its operations.
The industry’s growth will remain in lockstep with the continued demand for sports entertainment within the United States.
4.3 Customer Profile
Any person that is currently a professional athlete or is likely to be drafted into a professional league is a potential client of Sports Agency, LLC. As this business will be a relatively new enterprise, the Company will target college athletes that are likely to become professionals within the next two years. It is expected that these individuals will receive contracts for $500,000 to $1.2 million per year.
A the Company expands its reputation, the Company will work with players that can command a $2 million to $10 million salary. The business will provide its services to people that play baseball, basketball, football, hockey, and soccer.
4.4 Competition
Sports agencies are highly lucrative enterprises once they establish a roster of professional athletes. Within all major metropolitan areas, there are a number of agencies that recruit players that are currently professionals as well as up and coming players that have the ability to be drafted. One of the ways that this sports agency will differentiate itself from other firms is that the Company will provide marketing and investment management as part of its suite of services. This will allow clients to access all of their professional management needs from one firm.
In this section, you can further discuss ways that you will provide a level of service that is not common among other sports agencies.
5.0 Marketing Plan
Given the substantial amount of competition in this field, sports agencies need to engage in a number of marketing strategies that increase their visibility among professional athletes. The Company will engage a broad-based marketing campaign that uses direct outreach programs, online marketing, and networking with other entities in these field.
5.1 Marketing Objectives
- Develop ongoing relationships with collegiate level athletic directors in order to increase awareness among college players.
- Use social media to showcase the Company’s services to players that indicate that they are draft eligible.
- Use direct outreach programs at high schools and colleges to recruit players that show tremendous athletic talent.
5.2 Marketing Strategies
Sports Agency, LLC will focus on developing ongoing relationships with athletic directors, coaches, and athletic support staff among numerous entities throughout the United States. The initial focus of these operations will be within the Los Angeles metropolitan area before the Company expands to a national level. The Founder will directly contact these individuals in order to understand which players will most likely enter the field of professional sports within their careers. The Company will distribute substantial sales literature that showcases the holistic nature of the agency’s operations.
In regards to the Company’s online marketing strategies, the business will maintain a content-rich website that showcases the entire suite of sports representation, investment management, and PR services offered by the business. The Company’s web address will be prominently displayed on all marketing materials distributed by the business. On social media platforms, the Company will use targeted advertisements among college students that indicate that they are enrolled in an athletic program at their respective college or university. Management intends to allocate 40% of its aggregate marketing budget towards these operations.
Management and staff agents will frequently attend sports expositions and conventions in order to showcase services to potential clients. The Company will engage at least four events per year.
The Company will work with a professional advertising firm in order to have traditional ds placed among publications that are specific for collegiate sports. This will allow the business to have greater brand name visibility from the onset of operations. This type of marketing will be conducted throughout the life of the business.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
6.3 Management Biographies
In this section, you should discuss your experience in the field of professional sports management. You can include information such as any licenses that you may hold, your CV, and a discussion about why you will be able to make your sports agency highly successful.
7.0 Financial Plan
7.1 Underlying Assumptions
- An investor will contribute $200,000 for the development of Sports Agency, LLC.
- The Company will have an annual growth rate of 20%.
- The Company will not acquire any debt during the next three years.
7.2 Sensitivity Analysis
The Company’s revenues are fully immune from negative changes in the economy. The business, once it establishes a substantial client base, will be able to generate ongoing revenues from the wide range of representation services showcased earlier. The business’ controllable and fixed operating costs will further contribute to the economic stability of Sports Agency, LLC.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
