Since 2018, the production of hemp has now been legalized
within the United States.
The key strengths for the hemp farming and hemp cultivation market is now the
incredible demand (with CBD products as the primary driver behind this growth).
The gross margins generated on a per pound basis are substantial. These farms
and cultivation businesses can achieve profitability very quickly once their
first harvest has been completed. One of the other key strengths for hemp
farming is that it is relatively easy to do as compared to other types of cash
crops. Given the strong demand (and now complete legality of hemp cultivation),
most financial institutions are willing to provide substantial capital
injections for farmers and entrepreneurs that want to enter this industry.
As it relates to weaknesses, the primary issues faced by
these businesses are two fold. First, there is now a tremendous amount of
competition as it relates to number of producers growing hemp. Venture capital
firms and other private funding sources have been a three-fold spike in the
number of farmers seeking capital to develop large scale hemp producing
enterprises. This competition will eventually push down the prices of hemp (for
both flower and hemp biomass sales). The second issue regarding these
businesses is that they have substantial operating costs (including facility
expenses, land leases, irrigation, and processing costs). The other weakness
faced by the business is that there are high operating costs related to
distributing raw and processed hemp to third party wholesalers, retailers, and
The opportunities for hemp farming businesses are
substantial. First, many farms seek to produce their own CBD products, which
carry substantially high gross margins. Second, many hemp farms will often seek
to produce crude hemp oil (which as numerous purposes) from their hemp biomass.
This can be a substantial secondary stream of revenue for hemp farms and
cultivators. The continually changing regulatory and legal framework of this
industry will continue to allow hemp producers to develop new revenue streams
over the next ten years. One of the other major opportunities that hemp farms
enjoy is their ability to process their hemp onsite (for flower and oil), which
produces substantial profits for these businesses on a monthly basis.
For threats, these businesses will face downward pricing
pressure as more and more farms produce hemp as a primary or secondary crop. It
is very rigid and grows in most climates. As such, a new hemp farm operation
should prepare for downward pricing once this now nascent industry becomes more
mature. Now that the legal issues surrounding hemp have been remedied, this
fast growing industry is expected to triple over the next five years. The other
threat faced by the businesses may come from the improper production of hemp,
which may fall outside of the currently permissible legal framework for this
The purpose of this business plan is to raise and examine the allocation of $225,000 for a Bitcoin and cryptocurrency trading business located in Philadelphia. Bitcoin Trader, Inc. (“the Company”) will be actively engaged in the buying and selling of digital currency (both long term and short term strategies). The Company will also use a number of computer nodes in order to generate ancillary streams of revenue from mining digital and cryptocurrencies. The business was founded by John Smith. Revenue generating operations will commence in 2020.
As stated above, the principal revenue stream will come from the ongoing acquisition of digital currencies for capital appreciation purposes. The business will also use trading strategies that provide short-term yet consistent profits on a day-to-day basis. Regarding the pricing of crypto currencies and digital tokens, the founder sees a substantial opportunity to generate ongoing profits by examining the market and making appropriate investments on both a short-term and long-term basis.
On a secondary basis, the Company will be actively engaged in the mining of digital currencies. This will consist of acquiring large inventories of computers – equipped with high-powered processing systems (CPUs and GPUs) – that will allow the business to generate income by processing transactions on block chain ledgers. Unlike the trading business, the Company will be able to generate ongoing profits by providing this service. A substantial portion of the capital sought in this business plan will be used for the acquisition of computers that can allow the business to cost-effectively engage in the mining of digital currencies.
At this time, the founder is seeking $225,00- in capital in order to commence revenue-generating operations. The terms of this investment are to be determined during negotiation. The funds will be used for the following:
Capital for treating it coin and related digital currencies
Acquisition of computer equipment for digital currency mining
General working capital
The next section of the business plan will further discuss the usage of investment funds.
1.3 The Future
As time progresses, the Company will make continued and sustained investments into the businesses operating infrastructure. Given that the business will operate within exchanges of digital currencies, there is no need to create a marketing campaign and less the business decides to accept funding from third-party investors that want to use the company for digital currency trading.
2.0 The Financing
2.1 Use of Funds
Below is a breakdown of how the $225,000 of capital will be used:
2.2 Investor Equity
This will be discussed during negotiations
2.3 Management Equity
Mr. Smith anticipates that he will retain 50% ownership of the business once the capital in this business plan is secured
2.4 Exit Strategies
In the event that management finds it financially prudent to do so, a qualified business broker or mergers and acquisitions focused investment bank will be hired in order to manage the sale of the business to a third-party. Although this is a nascent industry, be price-to-earnings multiple for a digital currency trading firm typically ranges around 2 to 3 times the previous year’s earnings.
3.1 Buying and Selling of Digital Currencies
The primary focus of the Company’s operations will be on the acquisition of popular digital and cryptocurrencies that will allow the business to profit once the price of these instruments increases. The business will use both long-term and short-term strategies in order to provide daily profits, which will be smaller, as well as larger long-term gains.
Given the prevalence of digital currencies, the founder sees a
substantial opportunity to invest among a number of different types of digital
currency asset classes with the intent of producing capital appreciation. The
business may also use options and short selling techniques to profit from
declines in these currencies.
Digital currencies traded by the business will include BitCoin, LiteCoin, Ethereum, Ripple, and Libra.
3.2 Digital and Cryptocurrency Mining
A strong secondary aspect of the company’s operations, as discussed in the executive summary, will come from the ongoing mining of digital currencies. This is an important revenue stream for the business given that it will provide highly predictable streams of daily income. The business will spend approximately $2.5 million (leased) on computer equipment that can process block chain ledger transactions. For providing the service, the business will receive digital currency that can then be converted into traditional US dollars. The revenues generated from this aspect of operations will generally finance the entire operation the business.
4.0 Market Analysis
4.1 Economic Analysis
Currently, the worldwide economy is going through a continued growth spurt. Although unemployment rates have declined sharply and asset prices have increased substantially – worldwide interest rates remain relatively low. It should be noted that the revenues generated by the Company will be relatively immune from negative changes in the economy. This is due to the fact that the business will be engaged in open market transactions, and as such – the business will be able to remain profitable and cash flow positive at all times.
4.2 Industry Analysis
Although this is a nascent industry, there are approximately 200,000 people and companies that are actively engaged in the trading and mining of digital currencies and cryptocurrencies. Each year, these firms generate approximately $8 billion in fees as it relates to these operations.
It should be noted that there are
now a number of major investment banks that have developed trading desks as
well as options exchanges specific for a number of different types of digital and
cryptocurrencies. This trend is expected to continue in perpetuity as the
prevalence of digital currencies as a form of payment becomes more prevalent.
Given that there are now more than 200,000 firms
actively engaged in the trading and sale of crypto currencies, it is very
difficult to determine the competitors that the business will face moving
forward. The company will need to engage in a number of best practices in order
to ensure that it remains on the forefront of technology related to digital currency
trading and mining. The Company will reinvest a substantial portion of its
after-tax profits in order to ensure that it’s infrastructure is
As the business will be engaged in open market
transactions, the Company will not need to maintain a formal marketing plan or
advertise its operations to the general public. However, as the company
develops a strong track record for engaging in digital currency trading – the Founder
may seek to acquire capital from third-party investors that can be managed by
This would require a substantial marketing campaign that specifically targets qualified and accredited investors that are able to properly place funds with the Company for this purpose. In this event, Bitcoin Trader, Inc. will hire a qualified advertising firm as well as a law firm to properly develop advertisements that can be shown to prospective investors.
6.0 Financial Plan
6.1 Financial Assumptions The Company will acquire $5 million in capital in order to engage in the activities outlined in this business plan
The Company will have a annual revenue growth rate of 20% per year in each of the next three years
Bitcoin Trader, Inc. will settle most short-term payables on a monthly basis
6.2 Financial Highlights
Profitability in a positive cash flow in each year
Assets that are highly liquid in the digital currency exchange market
6.3 Sensitivity Analysis
The Company’s revenues are not sensitive to changes in the economy. The business will employ tactics will that will allow the business to generate profits regardless of whether the prices of digital currencies are increasing or decreasing. Additionally, the business will maintain a very low cost infrastructure that will ensure that any short-term losses will not impact the company’s ability to operate on a day-to-day basis
Assisted living facilities are
rapidly growing given that many Baby Boomers are now entering the later stages
of their lives. Several market studies indicated that nearly 50% of all people
over the age of 65 will require some form of ongoing living assistance as they
age. One of the best aspects of operating an assisted living facility is that
these businesses’ revenues are relatively immune from negative changes in the
economy. These companies are able to produce revenues directly from residents
(or their families) as well as from private insurance companies and publicly
funded healthcare systems. The month to month charges for a resident typically
ranges from $2,000 to $4,000 depending on the level of care required by the
resident. Many assisted living facilities are also integrating memory care
services into their operations in order to treat residents that suffer from
dementia or progressive neurological disorders.
Within the United States,
there are nearly 50,000 locations that provide assisted living services. Each
year, these businesses generate nearly $190 billion of revenue. It should be
noted that these revenues do not include services that operate within a
resident’s home. The industry employs over two million people (including both
medical and general facility staff). The growth of the industry remains around
2% per year, which is expected to remain stable over the next twenty years
(again, as a function of the aging Baby Boomer population).
One of the common trends within
this industry is to have a number of specialized medical personnel on staff in
order to render specific medical services to residents of these facilities.
This can drastically boost the billings of the business given that these fees
are often paid by private insurance, Medicare, and Medicaid. Larger scale
assisted living facilities retain a medical director (a physician) in order to
provide consultation when necessary for a resident that has a specific medical
Given the increasing level of
competition among assisted living facilities, many of these businesses have
begun to offer a broad spectrum of amenities in order to differentiate
themselves from other market agents. This includes providing specialty meals as
well as transportation services to local destinations (so that residents can
enjoy time outside of the facility). Transportation services are important to
residents that still maintain modest employment (among residents that are
younger, able to work, and want to retain employment).
Overall, the industry outlook for
the assisted living facility is very strong. The increasing age of the Baby
Boomer population is continuing to increase demand for comprehensive
in-facility services. This trend is expected to continue indefinitely
especially as families have become busier, and cannot directly care for an
elderly individual on an ongoing basis.
Very few people can complete
repairs on their own heating, ventilation, and air conditioner systems. These
services generally can only be provided by a competent and licensed contracting
professional. Although the bread-and-butter of HVAC contractors comes from the
installation of new systems, these businesses are always able to remain
profitable and cash flow positive from repair and maintenance services.
Additionally, for commercial and industrial buildings – many state and
municipal building codes require that these systems are inspected by a licensed
professional from time to time. This lends to a great degree of economic
stability for these businesses. Additionally, HVAC contractors enjoy readily
available access to capital given that they can always generate profits from
repair and maintenance services. Most financial institutions are willing to
provide nearly all of the necessary capital in order to get these businesses
often the ground (or for expansion purposes).
As it relates to the size of this
industry, there are approximately 110,000 companies that are actively involved
with HVAC services. The industry employs more than half a million people. Each
year, the industry generates nearly $100 billion of revenue.
The growth of this industry has
remained strong over the past five years given the strong demand for new
housing (as interest rates have remained low). In each of the last five years,
industry growth has remained above 2%. It should again be noted that even in
times of economic recession – the industry remains profitable (although with
flat revenue growth).
One of the common trends within
the HVAC industry is to aggressively use online platforms in order to market
these services to the general public. Almost all contractors maintain a
proprietary website coupled with a moderate scale presence on social media
platforms. As it relates to social media (with a focus on FaceBook), these
businesses are able to develop profile pages that can feature reviews from
prior clients. This is important given that many people will seek honest
reviews on these pages. One of the other trends is to join independent review
platforms such as Angie’s list in order to further boost the visibility of the
business. Over time, positive reviews from these platforms can be an invaluable
source of revenue for HVAC contractors. Many HVAC contractors will also engage
in a regional search engine optimization (or “SEO”) campaign in order to ensure
that their proprietary websites are frequently found in search results.
Although this type of marketing has high upfront costs, the results can last
for several years if this is carried out properly. Most companies outsource
this type of work to a qualified digital marketing agency or web development
Overall, the industry outlook for
the HVAC industry is strong. Interest rates remain low, and many homeowners are
taking advantage of low cost borrowing in order to upgrade their systems to be
more energy efficient and environmentally friendly. Many HVAC contractors
maintain relationships with specialized lenders so that these systems can be
financed by home and property owners. There are numerous companies that act as
a financing partner for contracting businesses. Additionally, new housing
demand remains strong (again, as a function of low interest rates). As such,
the demand for new system installations by real estate developers is
It should be noted that one of
the best features of the industry is that HVAC contractors can scale down their
operations during difficult economic conditions. This allows for a core focus
to be shifted to profitable maintenance services.
As opposed to twenty years ago,
many more people are making their living as a freelancer or independent
entrepreneur. Given the prevalence of the internet, the ability for individuals
to make a living on their own has expanded rapidly. As such, many of these
people require a small amount of office space if they need to meet
clients/customers and do not want to conduct these operations out of their
home. Additionally, some independent entrepreneurs and freelancers prefer to
work outside of their homes in order to avoid distractions while enjoying the camaraderie
of people that operate in a similar capacity. This strong demand has allowed
real estate firms to develop coworking styled office spaces that allow for low
costs for small office space.
One of the most important aspects
to this industry is that these firms generate much higher returns on investment
as opposed to standard commercial leases. However, on a per square foot basis –
the rental fees are generally much higher. This is primarily due to fact that
most coworking spaces (or shared office spaces) do not require long term
commitments. This creates a moderately higher degree of risk for the
owner-operator of the coworking space. Additionally, most coworking spaces
include numerous amenities as part of a flat rate program. These amenities
often include high speed internet, complimentary snacks, access to conference
rooms, and other benefits. This is usually done in order to create a
competitive advantage over other coworking space providers.
As it relates to geographic
location, these types of businesses are very popular in major metropolitan area
markets where large scale commercial office space is extremely expensive. Major
metropolitan areas where coworking spaces are prevalent include New York, San Francisco, Miami, Los Angeles, San Diego, and Chicago.
In markets where startups are popular, coworking spaces can be found
As it relates to the industry,
there are approximately 2,000 companies that provide office space in a
“coworking styled” capacity. Each year, these businesses aggregately generate
$3 billion per year. The year-on-year growth of this industry has remained near
6% in each of the last five years. This rate of growth is substantially higher
than that of the economy as a whole as well as for the commercial real estate
leasing industry. This trends is expected to continue for at least the next ten
years. It should be noted that the revenues of coworking space industry is very
sensitive to negative changes in the economy. During recessions, many
freelancers will turn to becoming employees of established businesses. This
causes demand for rentals to drop substantially. As such, coworking space
companies often need to keep a substantial amount of cash on hand to deal with
low occupancy rates.
In order to remain economic
stability, well capitalized firms will often seek to purchase the building that
houses these operations. This allows for a mix of coworking space rental income
coupled with standard long-term leases. This often alleviates the risk associated
with leasing a facility with the intent to subdivide it into coworking spaces.
Most financial institutions are very welling to provide the necessary capital
in order to acquire a commercial building for this purchase given that real
estate is excellent collateral for a debt obligation.
Overall, the industry outlook for
this industry is moderately strong. The returns on investment can be
substantial during times of strong economic growth. As more people become part
of the “gig economy”, the demand for shared office space should remain stable. Only
severe and prolonged economic recessions have a major deleterious effect on
these businesses ability to generate revenues and profits.