Table of Content

    Do you want to start holding company?

    Are you planning to start a holding company? In the corporate world, mergers and acquisitions are part of doing business and for any holding company to succeed, it must strategize itself to tap into existing business opportunities. The key role of a holding company is buying and owning shares or stocks in other companies with an aim of obtaining returns on their investment and controlling company corporate affairs. This is a highly strategic business and to succeed, a good holding company business plan that clearly outlines your acquisition strategy should be put in place. A large financial base and a team of experienced investment experts are key for business success.

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    Executive Summary

    2.1 The Business

    The business holding company will be registered as Benton Holdings and will have its headquarters in downtown Manhattan, New York. The business is owned by Mark Ford who is an experienced Investment Expert.

    2.2 Management Team

    Mark Ford, the owner of Benton Holdings is an experienced investment expert with in-depth knowledge of the U.S merger and acquisitions industry. He boasts of over 15 years of experience in the investment industry and has worked for various top blue chip U.S. companies.

    2.3 Customer Focus

    With his caliber of experience, Mark has extensive technical and industry knowledge on investment having worked in numerous holding companies as an advisor. With these skills, he has the right customer segment in perspective.

    2.4 Business Target

    Mark Ford has been in the industry for long and knows how acquisitions for investment are handled and the best strategies to use to reach out to the appropriate business targets.

    Holding Company Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Mark Ford is an experienced investment analyst whose career has spanned almost two decades. In the course of his career, Mark worked for numerous top brands such as JP Morgan Chase, Citigroup and NYSE (New York Stock Exchange) among others.

    3.2 Aim of Starting the Business

    Corporates take various strategic decisions to help advance their course towards profitability and achieving financial goals. Mergers and acquisitions happen for various reasons and holding companies have a good opportunities to capitalize on these arrangements to generate revenue. A holding company business plan also doesn’t offer any products or services, its mandate is to simply find opportunities to invest in other businesses. Mark is aware of the dynamics and knows how to start a holdings company.

    3.3 How the Business will be started

    Benton Holdings will be started based on a careful market research to identify opportunities available for the holding company. Mark has the technical and business skills but has sought help from financial gurus to craft a detailed comprehensive analysis.

    Holding Company Business Plan - Startup Cost

    Start-up Expenses  
    Legal $4,000
    Consultants $2,500
    Insurance $18,000
    Rent $12,000
    Research and Development $10,000
    Expensed Equipment $13,000
    Signs $3,000
    Start-up Assets $0
    Cash Required $110,000
    Start-up Inventory $35,000
    Other Current Assets $25,000
    Long-term Assets $7,000
    TOTAL ASSETS $22,000
    Total Requirements $24,000
    START-UP FUNDING $85,000
    Start-up Expenses to Fund $37,000
    Start-up Assets to Fund $20,000
    Assets $18,000
    Non-cash Assets from Start-up $12,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $45,000
    Cash Balance on Starting Date $20,000
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $0
    Planned Investment $0
    Investor 1 $15,000
    Investor 2 $18,000
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $50,000
    TOTAL CAPITAL $45,000
    Total Funding $110,000
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    Services for Customers

    Benton holdings is being formed purposely to scout for investment opportunities and find the best areas for the company to purchase stocks or shares with a view of making profits and getting revenue. Opening a holding company is a fairly straightforward process but the key is to have the right strategies in place to generate revenue. In order to get the best deals on the market, Mark aims to have the best team in place and a great financial base for Benton Holdings to successfully focus on its services and realize its objectives. For a business holding company to enjoy a good market share, in-house acquisition strategies must take precedence to get the right results. Benton Holdings will be launched to deal with the following areas/ services.

    • Securities dealing which involves acquisition of stocks and shares from companies drawn from various economic sectors.
    • Merchant banking services which involves provision of capital to new companies in exchange for share ownership
    • Investment advisory services
    • Security underwriting

    Marketing Analysis of Holding Company

    We are living in an era where mergers and acquisitions have become a common phenomenon in the corporate world. Businesses including established entities are increasingly looking for strategic partnerships which creates a good opportunity for Benton Holdings to do business and gain revenue. In this business plan for holding company, emphasis has been put on doing an extensive market analysis in order to find markets that are ready for consolidation.

    5.1 Market Segment

    For Benton Holdings to meet its financial objectives, the company has to identify the right target market and come up with measures to reach out to the intended groups. Acquisitions do not happen on a daily basis and a great amount of skill is required to point out potential acquisitions and how they will be beneficial to a company. How to start your own holding company and run it successfully depends on having a strategic plan to identify the best opportunities.

    Holding Company Business Plan - Market Segmentation

    Business Plan for Investors

    5.1.1. Real Estate and Construction

    There is a real estate boom in New York considering it’s the largest city in the United States. For this reason, some companies both new and established are consistently looking for strategic partners to drive their corporate ambitions. Benton Holdings is well positioned in a city with immense merger and acquisition opportunities to search and find potential acquisitions, carry out a risk analysis and proceed if the deal looks good.

    5.1.2 Energy

    The world depends on energy to get many things done and this is definitely a lucrative industry for Benton Holdings to look for investment opportunities. Shares in companies within this sector are always on high demand and therefore, Benton Holdings company must adopt the right marketing strategies to demonstrate why they would be the best choice for a company looking for investors. Whether new companies or established entities, this is a great industry with massive revenue potential for Benton Holdings. With the increasing demand and reliance on energy, this is a key industry to focus on when starting a holding company.

    5.1.3 Aviation and Automobile

    The transport industry is a major economic driver because people have to travel from one place to another on a daily basis. Coincidentally, there are numerous mergers and acquisitions that take place among industry stakeholders with an aim of boosting operations and gaining a greater foothold of the market. New York is a global transport and aviation hub which means there could be investment opportunities that Benton Holdings could explore.

    5.1.4 Finance and Information Technology

    Every industry now relies on technology to run its operations and achieve business goals. The increasing demand for IT and financial services including the diversification of technology makes this industry lucrative for potential investors to business plan such as Benton Holdings.

    5.1.5 Food Manufacturing and Catering

    This is a thriving industry with potential to generate good revenue for Benton Holdings if the company can successfully identify the best opportunities to invest in companies in the food industry.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Real Estate and Construction 25% 23,000 26,000 29,000 32,000 35,000 10.00%
    Energy 22% 20,000 23,000 26,000 29,000 31,000 12.00%
    Aviation and Automobile 20% 17,000 20,000 23,000 26,000 29,000 14.00%
    Finance and Information Technology 18% 13,000 16,000 19,000 22,000 25,000 15.00%
    Food Manufacturing and Catering 15% 10,000 13,000 16,000 19,000 22,000 11.00%
    Total 100% 83,000 98000              113000 128,000 142,000 15.00%
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    5.2 Business Target

    Benton Holdings plans to offer professional services given the advantage New York City has as a global corporate and financial capital. Despite similar holding companies doing business, Benton Holdings strongly believes there are unexplored opportunities and intends to operationalize this holding company business plan template to realize an annual revenue increase of between 12%-15%.

    5.3 Product Pricing

    Benton Holdings has varied pricing structures depending on the deal at hand. However, pricing has been determined after carefully studying the market and what competitors are doing to be successful.


    Benton Holdings intends to use cost-effective yet highly efficient marketing strategies to generate revenue and successfully venture into new markets. The company intends to put in place strategies that will help identify the right acquisition opportunities. How to start a holding company and have it run successfully depends on a good understanding of mergers and acquisitions.

    6.1 Competitive Analysis

    Benton Holdings has carried out an intensive market research and identified how to creatively go about any potential acquisitions to beat competitors. It’s all about having an attractive acquisition plan that would make a company want to sell their stake to you.

    6.2 Sales Strategy

    For Benton Holdings to penetrate the market and handle numerous acquisition plans, the sales strategy below will be helpful in advertising the business.

    • Prepare introduction letters and as well as company materials such as brochures and portfolio. Benton Holdings has to find a strategy to distribute these materials to key decision makers especially in industries prone to mergers and acquisitions.
    • Take part in high-profile business forums and exhibitions that will help the holding company business plan mingle with other industry stakeholders.
    • Have an opening party and ensure invited guests come from targeted market segments. This is an incredible way to create awareness about the business.
    • Keep high standards of customer service and have a follow-up structure to ensure all emerging issues and queries are handled effectively
    • Use digital media channels such as Google Ads, Twitter and Facebook for marketing

    6.3 Sales Forecast

    For Benton Holdings to achieve its goals, the holding company has come up with a detailed sales forecast to guide the business on a path towards success.

    Holding Company Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Securities Dealing in Acquisition on shares and stocks 300,000 320,000 330,000
    Merchant Banking Services 250,000 270,000 280,000
    Investment Advisory Services 200,000 220,000 230,000
    Security Underwriting 150,000 170,000 190,000
    TOTAL UNIT SALES 900,000 980,000 990,000
    Unit Prices Year 1 Year 2 Year 3
    Securities Dealing in Acquisition on shares and stocks $300.00 $320.00 $340.00
    Merchant Banking Services $250.00 $270.00 $290.00
    Investment Advisory Services $200.00 $220.00 $240.00
    Security Underwriting $150.00 $170.00 $190.00
    Securities Dealing in Acquisition on shares and stocks $250,000 $270,000 $290,000
    Merchant Banking Services $200,000 $220,000 $240,000
    Investment Advisory Services $150,000 $170,000 $190,000
    Security Underwriting $100,000 $120,000 $140,000
    Direct Unit Costs Year 1 Year 2 Year 3
    Securities Dealing in Acquisition on shares and stocks $4.00 $3.00 $2.00
    Merchant Banking Services $3.00 $2.00 $1.50
    Investment Advisory Services $2.00 $1.50 $1.00
    Security Underwriting $1.00 $0.75 $0.40
    Direct Cost of Sales
    Securities Dealing in Acquisition on shares and stocks $150,000 $170,000 $190,000
    Merchant Banking Services $130,000 $150,000 $170,000
    Investment Advisory Services $100,000 $120,000 $140,000
    Security Underwriting $80,000 $100,000 $120,000
    Subtotal Direct Cost of Sales $460,000 $540,000 $620,000

    Personal Plan

    Benton Holdings cannot achieve its mandate without having extremely skilled staff to coordinate various kinds of investment portfolios. How to create a holding company business plan must include a well-thought personnel plan.

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    7.1 Personnel Plan

    For Benton Holdings to efficiently carry out its operations, the following staff shall be employed to work in various departments. Mark Ford who is the owner will manage the business on a day-to-day basis as the Chief Executive Officer. The following staff will be hired to work in the holding company business plan.

    • Deputy Chief Executive Officer
    • Merger and Acquisitions Manager
    • Marketing Manager
    • 2 Marketing Executives
    • 2 Customer Service Executive
    • 2 Investment Advisors
    • 2 Risk Analysts

    7.2 Average Salaries

    Benton Holdings intends to pay its staff the following salaries within the first three years of operations.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Deputy Chief Executive Officer $35,000 $37,000 $39,000
    Merger and Acquisitions Manager $30,000 $32,000 $34,000
    Marketing Manager $30,000 $32,000 $34,000
    2 Sales and Marketing Executive $60,000 $62,000 $64,000
    2 Customer Service Executive $50,000 $52,000 $54,000
    2 Investment Advisors $60,000 $62,000 $64,000
    2 Risk Analysts $60,000 $62,000 $64,000
    Total Salaries $325,000 $339,000 $353,000

    Financial Plan

    Benton Holdings has formulated a comprehensive financial plan that will guide the holding company on how to achieve success and reflect the true state of the company’s financial books. When starting a holding company business plan, it is critical to find out where your capital will come from. In this case, Mark Ford will use his savings, bring on board two investors and fund the remaining budget deficit with a bank loan. The following is a financial breakdown for various parameters for Benton Holdings.

    8.1 Important Assumptions

    The financial forecast for Benton Holdings is based on the assumptions below.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 15.00% 18.00% 21.00%
    Long-term Interest Rate 6.00% 6.00% 6.00%
    Tax Rate 14.00% 16.00% 18.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    Benton Holdings brake-even analysis is shown in the graph below.

    Holding Company Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 8000
    Monthly Revenue Break-even $320,000
    Average Per-Unit Revenue $200.00
    Average Per-Unit Variable Cost $1.60
    Estimated Monthly Fixed Cost $420,000

    8.3 Projected Profit and Loss

    Profit and loss information for Benton Holdings as calculated on a monthly and annual basis is indicated below.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $320,000 $330,000 $340,000
    Direct Cost of Sales $50,000 $70,000 $90,000
    Other $0 $0 $0
    TOTAL COST OF SALES $370,000 $400,000 $430,000
    Gross Margin $420,000 $460,000 $500,000
    Gross Margin % 72.00% 80.00% 88.00%
    Payroll $300,000 $330,000 $360,000
    Sales and Marketing and Other Expenses $5,000 $7,000 $9,000
    Depreciation $3,000 $5,000 $7,000
    Leased Equipment $0 $0 $0
    Utilities $5,000 $7,000 $9,000
    Insurance $2,000 $4,000 $6,000
    Rent $10,000 $14,000 $18,000
    Payroll Taxes $25,000 $30,000 $35,000
    Other $0 $0 $0
    Total Operating Expenses $320,000 $350,000 $380,000
    Profit Before Interest and Taxes $30,000 $50,000 $70,000
    EBITDA $25,000 $30,000 $35,000
    Interest Expense $0 $0 $0
    Taxes Incurred $25,000 $30,000 $35,000
    Net Profit $120,000 $130,000 $140,000
    Net Profit/Sales 35.00% 40.00% 45.00%

    8.3.1 Monthly Profit

    Holding Company Business Plan - Profit Monthly

    8.3.2 Yearly Profit

    Holding Company Business Plan - Profit Yearly

    8.3.3 Monthly Gross Margin

    Holding Company Business Plan - Gross Margin Monthly

    8.3.4 Yearly Gross Margin

    Holding Company Business Plan - Gross Margin Yearly

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    8.4 Projected Cash Flow

    Below is a summary of Pro forma cash flow, subtotal cash received, subtotal cash spent, subtotal cash from operations and subtotal cash spent on operations.

    Holding Company Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $50,000 $70,000 $90,000
    Cash from Receivables $10,000 $12,000 $14,000
    SUBTOTAL CASH FROM OPERATIONS $60,000 $82,000 $104,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $70,000 $80,000 $90,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $23,000 $26,000 $29,000
    Bill Payments $24,000 $28,000 $32,000
    SUBTOTAL SPENT ON OPERATIONS $47,000 $54,000 $61,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $40,000 $45,000 $50,000
    Net Cash Flow $15,000 $25,000 $35,000
    Cash Balance $25,000 $30,000 $35,000

    8.5 Projected Balance Sheet

    Below is a Projected Balance Sheet for Benton Holdings that indicates assets, liabilities, capital, long term assets and current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $280,000 $320,000 $360,000
    Accounts Receivable $15,000 $18,000 $21,000
    Inventory $4,000 $5,000 $6,000
    Other Current Assets $4,000 $4,000 $4,000
    TOTAL CURRENT ASSETS $303,000 $347,000 $391,000
    Long-term Assets
    Long-term Assets $12,000 $14,000 $16,000
    Accumulated Depreciation $14,000 $17,000 $21,000
    TOTAL LONG-TERM ASSETS $4,000 $3,000 $2,000
    TOTAL ASSETS $330,000 $368,000 $420,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $12,000 $15,000 $18,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $12,000 $15,000 $18,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $12,000 $15,000 $18,000
    Paid-in Capital $26,000 $26,000 $26,000
    Retained Earnings $35,000 $45,000 $55,000
    Earnings $80,000 $100,000 $120,000
    TOTAL CAPITAL $300,000 $330,000 $360,000
    TOTAL LIABILITIES AND CAPITAL $280,000 $310,000 $340,000
    Net Worth $320,000 $350,000 $380,000

    8.6 Business Ratios

    The following is the Ratio Analysis, Business Ratios and Business Net Worth for Benton Holdings.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 10.00% 35.00% 45.00% 6.00%
    Percent of Total Assets
    Accounts Receivable 7.00% 6.00% 5.00% 12.00%
    Inventory 5.00% 3.00% 2.10% 14.00%
    Other Current Assets 4.00% 2.20% 3.00% 35.00%
    Total Current Assets 120.00% 150.00% 155.00% 60.00%
    Long-term Assets -10.00% -20.00% -30.00% 50.50%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 6.00% 4.20% 3.00% 25.50%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.00%
    Total Liabilities 8.00% 2.00% 1.50% 52.10%
    NET WORTH 100.20% 90.00% 95.00% 30.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 80.00% 82.00% 84.00% 0.00%
    Selling, General & Administrative Expenses 70.00% 77.00% 65.00% 67.00%
    Advertising Expenses 4.00% 3.00% 1.50% 4.20%
    Profit Before Interest and Taxes 25.00% 30.00% 35.40% 2.50%
    Main Ratios
    Current 12 15 19 1.5
    Quick 26 30 34 2.5
    Total Debt to Total Assets 4.00% 3.00% 2.00% 60.00%
    Pre-tax Return on Net Worth 85.00% 95.00% 100.00% 4.00%
    Pre-tax Return on Assets 66.00% 60.00% 70.00% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 20.00% 23.00% 26.00% N.A.
    Return on Equity 52.00% 56.00% 60.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7 9 11 N.A.
    Collection Days 95 99 113 N.A.
    Inventory Turnover 16 19 22 N.A.
    Accounts Payable Turnover 12 16 20 N.A.
    Payment Days 25 25 25 N.A.
    Total Asset Turnover 2.8 2.6 2.4 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.06 -0.03 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $250,000 $270,000 $290,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.55 0.5 0.4 N.A.
    Current Debt/Total Assets 8% 4% 3% N.A.
    Acid Test 30 34 38 N.A.
    Sales/Net Worth 2.8 2.2 2 N.A.
    Dividend Payout 0 0 0 N.A.

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