Business Plan

13 Pages   |   3,304 Words
Table of Contents
Executive Summary. 3
Company Description-Currexchange. 4
Risk and Market Analysis. 4
Organization and Management. 5
Marketing. 6
Product/Service. 6
Price. 6
Placement. 7
Promotion. 7
Financial Projection. 7
Start-up Cost. 8
Reserves. 9
Income Statement. 9
Competitive Advantage. 10
Future Outlook. 10
References. 12

Executive Summary

Currexchange will provide foreign exchange currency services to individuals and businesses, as well. The company will make itself stand out via offering auxiliary services and pursuing different strategies for its segmented target market. Every business has its own set of risk and critical factors. For this business, foreign exchange rates are the biggest risk associated with the company. Foreign exchange rates are determined by macroeconomic variables, like interest rates or balance of trade. The company cannot mitigate these risks completely. The market analysis revealed that the potential of doing foreign exchange trading business in Muscat, Oman is a lucrative option and can be pursued with sufficient capital. Moreover, Oman is investing heavily on its ports, tourism, and foreign investments. This means that the need of foreign exchange currency services will increase along with the increase in such investments. The managerial and organizational resources of the company will be moulded in accordance to International Monetary Fund’s rules for doing exchange business, which recommends that a proper chain of command should be there in order to control skilled workers. Controllable risks can be mitigated via using prudent trading policies. The workforce will be trained and coached in a way that ensures customer satisfaction. The company’s 4Ps are discussed in accordance to identified segments, tourists and business customers. The company will offer differing mix of 4Ps to business customers and general (tourists) customers. The company will use cost leadership strategy to gain market share in the business market for forex trading. Lastly, the company will expand its geographical reach within the country in five years. International expansion will be pursued in coming 10 years, and new equity will be injected via the stock market or partnership.

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Company Description-Currexchange

The company will provide foreign currency exchange services to individual as well as business customers. It will aid customers in understanding their full capabilities, why they are unable to achieve them and how to achieve them. It will help hone their entrepreneurial skills and guide them to employ the strategies of top traders.
The company will also help customers develop trading plans and carry them out in an organized manner. They will also be able to measure their performance in comparison to benchmark metrics while interacting with other traders and create strategic alliances. They will also be provided with coaches in order to help develop trading skills.

Risk and Market Analysis

It is important to keep in mind one’s investment objectives, experience and risk attitude before and while investing in the Forex market. It is especially important to invest only that money which you can afford to risk (SMBU, 2013). Money exchange is a risky business that is vulnerable to risks such as, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair.
Furthermore, the business of Forex trading is such that a slight change in the market will influence deposits by the same rate. This may work against you as well as for you. In case there is a complete loss of the initial investment, additional investment may be required. If this requirement is not met, the company may be liquidated and may suffer huge losses. An online business may also have numerous risks such as, hardware or software breakdown, weak internet connectivity and others. The company may use alternative backup systems in order to reduce these risks. In any case, telephonic trading is availability even if all else fails (Dewachter & Lyrio, 2006 pp. 1072-1089).
Being in the financial market, interest rates are of special importance to investors who requires stability of funds while also earning yield returns. Interest rates and yield for assets valued in that currency have a positive relationship, which is both moves in the same direction; when interest rates rise, so do yields for assets denominated in that currency. This results in the rise in demand of the currency by investors and hence its value rises. Decreased interest rates may lead to trip from that money to another. As interest rates in major economies are low, the central bank and government are using other methods to influence the market and economy (Kitamura & Akiba, 2006 pp. 108-119).
According to Anderson (2013), Oman is gaining advantage from the government’s exogenous spending in sectors other than the oil sector. The country is developing new ports, industrial and free trade zones. Tourism is also on the rise in Oman. Therefore, Oman has one of the highest growth rates in the Gulf Cooperation Council. The IMF estimated a 5.1 per cent rise in GDP for 2013. According to the IMF, inflation is decreasing, but the economy has the potential to improve its competitiveness and business indicators
Although Oman is not known for its Forex trade businesses, it is very much possible to start up such a business there. However, in order to do so, it is important to gain familiarity with the relevant rules of the country. Forex trading regulations are dealt by the Central bank in Oman, the main function of which is to reduce inflation and ensure economic growth. The political and economic environment is friendly towards new investors who are not looking for a highly challenging venture as the Forex market is stable in comparison to other economies.
It is important to gain experience in the field and by testing some strategies before actually investing into a new money exchange business. The Oman Riyal is closely related to the Indian Rupee, and this currency pair is common in the country (Fisher, 2013).

Organization and Management

The company will have a proper organizational structure with proper line of authority and hierarchical levels. Therefore, decision making will be organized and responsibilities well established. This will allow reduction of risk and effective control of reserve management activities. It will also allow clear understanding of authorities and responsibilities while ensuring transparency and a well recorded and organized system.
The first layer will have one CEO; the second layer will have two branch managers. Under first branch manager, 5 business development managers and one IT manager will be working, whereas under the second manager, 3 traders and one IT manager will be working.
Internal operations are of utmost importance in any given situation. So it is important to ensure all operations are smooth. This can be done by training the staff in an organized manner; Curexchange will do the same. The main operation in any Forex trading business is that reserves are managed in an optimal manner and for that, again staff training is necessary. The employees at the company will have a good and fair knowledge about reserve management, market practices associated with it, and company’s policies. The company will have a well-documented code for resolving conflicts; in case, any occurs. Moreover, it will be ensured that the staffs follow the rules by implementing rigid double counter check on their activities. Risk associated with forex exchange gets doubled in case rigid rules are not followed. Failure to control the environment not only causes monetary losses, but it also impacts the company’s reputation in a negative manner. The company will ensure that no liquidity issues are faced by making budgeted plans for the upcoming month. In this way, current needs for forex reserves can be easily met. The company will ensure that its managers find a competitive and challenging environment. It will help them in developing their skills as they will find ample opportunities to grow themselves. Moreover, a training program will be initiated in the beginning, which will ensure that the staffs are familiar with company’s code of conduct (IMF, 2001).
Lastly, reserve management practices will be handed over to the branch managers. A lot of reports have reported how managers’ manipulate forex reserves for their personal gains. A special code of conduct will be devised by the CEO, who will be supervising the two branch managers. It will be ensured that branch managers follow that code religiously (Harvey, 2013 pp. 343-354).



Product or service is defined as the value offered by the company in exchange of value (money). For the current business, trading services will be offered to the customers. The main medium of value offering will be foreign currency. Moreover, the company will provide auxiliary services to customers in order to stand out in the crowd. Skilled management will ensure that customers are given the best, whatever can be offered at that point in time i.e. foreign currency exchange rates. The services will be divided into two main categories, business and general customers. Firstly, the company will focus on business customers as they will act as repetitive buyers of company’s services. On the other hand, most general customers will be tourists and they might act as a one-time buyer of company’s services (Alipour, 2012 pp. 1169-1173).


Price is the value received from customers in terms of money for offering goods or services. As mentioned in the product section, there will be two main categories of customers, business and general. The company will charge a low price for its services to business customer in order to attract them in the first place and build long term relations. Clearly, low margins with the business customers will have an opportunity cost, but the company will cover that up with the volume of trade done by business customers. For general customers, mostly tourists, the company will charge a higher price than business customers as they might be one-time buyers of company’s services. So, the company will not have another chance of recovering the cost of low margins. However, the company will ensure that the extra charges paid by general customers are nominal and comparable with rivals.


The company will offer its services via its own branches. At the initial phase, the company will start with two branches. The first branch will be located at the Muscat International Airport, whereas the second branch will be located at Ruwi, which is the main business hub in Muscat District. The placement will be done in accordance to customers’ convenience, where they can easily approach the company for services. Apart from these two branches, the company will have its own websites, where its small scale or micro scale business customers can trade foreign currency and the company will charge them some commission per transaction (Benaroch & Appari, 2011 pp. 534-544).


For promoting services to genera customers, internet promotions will be used. These promotions are inexpensive and convenient to use. Mainly tourism websites will be used to put ads online so that customers can get acquainted with the company, or they have a sense of familiarity when they see the company’s name at the airport. This will automatically reduce the perceived risk.
Moreover, for business customers, the company will use personal selling approach to attract them. PR and personal selling will help the company is building its share in the business market. The company will tailor the offering according to business customer’s need as each business has its own policies and rules (Alipour, 2012 pp. 1169-1173).

Financial Projection

This section is divided into three parts. The first part discusses the start-up capital cost required for the business. Each part is explained with references. The second part discusses the mix of foreign reserves that will be kept for business customers. It will be kept in accordance to country’s export statistics. However, it will be altered in case a business customers demands a currency, which was not anticipated. Lastly, income statement is provided for three years.

Start-up Cost

Start Up Cost OMR
Foreign Reserves 5000000
Registration/Red Tape Fee 100000
Prepaid Rent for two Offices (One year) 3120000
Website Designing and IT networking 150000
One month Salaries:  
Two branch managers 150000
5 business development managers for Business customers 125000
2 IT Managers 70000
3 Traders for General customers 75000
Unanticipated Cost/Contingency Reserves 210000
Total 9000000
Source for Estimation:  Forex (2011); Dubizzle (2013); Gulfjobs (2013)
Foreign reserves, the main capital requirement is 5 million Omani Riyal, will be required to start the business at a large scale. Out of these 5 million, 4 million will be kept for business customers, whereas 1 million will be kept for general customers. Business customers make huge transactions, for which the company must have sufficient reserves to offer them foreign currency. Red tape fee and registration fee is kept for getting the business registered with Oman’s state bank as it is the sole authority for financial services in the country. The cost is estimated at a high level there are other legal fee for renting offices, telephone lines, and other activities. The company will get outsource website designing from a reputed website designing company. Forex rate change within minutes and the company must be on its feet in order to ensure that its information is up-to-date. Moreover, the company must have one month salaries for its managers in advance to make sure that salaries can be easily paid in case of loss. Two branch managers will be hired at 75000 OMR each. Business development managers will be hired at OMR 25000 each; whereas, 3 traders will be hired for general customers at the same salary. Two IT managers will be hired at OMR 35000 each. Lastly, for unanticipated reserves, 210000 OMR will be required/held.


Export Countries Currency Percentage of Export Amount of Reserve (out of 4 million OMR)
China Renminbi 33% 1320000
South Korea South Korean Won 11% 440000
Japan Yen 10% 400000
India Rupee 10% 400000
Thailand Thai Baht 6% 240000
Misc. Mix Currencies 30% 1200000
Total Business Customers Reserves 4000000
Source:  OEC (2013)
Oman exports 33% of its goods or services to China, and about 20% to Japan and India. The reserve mix of foreign currency will be kept in accordance to the exports to other countries. Miscellaneous currencies will be kept in order to make sure that unanticipated currency is available.

Income Statement

  2014 2015 2016
Commission/Fee Revenue 900000 990000 1089000
One month Salaries      
Two branch managers 150000 150000 150000
5 business development managers for Business 125000 125000 125000
2 IT Managers 70000 70000 70000
3 Traders for General customers 75000 75000 75000
Rent Expense (Airport) 25000 25000 25000
Rent Expense (Commercial) 10000 10000 10000
Interest Expense @ 1% for 50 percent start-up capital 450000 450000 450000
Income -5000 85000 184000
Source: Forex (2011); Dubizzle (2013); Gulfjobs (2013); Alit (2013)
In the first year, the company anticipates that it will earn around 900000 OMR via commissions from general customers and fee from business customers. The major chunk of this revenue will be earned via business customers; that is why 5 business development managers will be hired who will be responsible for bringing at least 5-10 business customers in one month. The business estimates that revenues will grow at the rate of 10% annually, given aggressive targets to the sales team or business development team.

Competitive Advantage

In order to gain competitive advantage, the company will use a certain mix of strategies. Strategy for business customers will be different from general customer strategy. The company will use cost leadership strategy for attracting business customers. Given the size of transactions that business customers do, they try to save money as much as possible because a mere increase or decrease in the exchange rate turns into the profit or loss of thousands of Omani Riyals. However, offering cheapest rates will not suffice. The company will assign business development managers to business customers who will look after their idiosyncratic needs, which will help the business flourish (Samson & Daft, 2012).
On the other hand, tourists or general customers, value added services will be used to maintain a repute. For instance, a customer can order that he/she will need 2000 Omani Riyals on arrival at the airport. The company will ensure that the customer is contacted on due time and currency is delivered to him/her personally. However, it is not necessary that all customers use Muscat International Airport. In case, a customer is using other airport, like Masirah airport, the company will contact the forex trader present there and ensure that the currency is delivered.

Future Outlook

In the coming five years, the company expects to increase profits so that it can conveniently expand its branch network. Expansion of branch network within cities’ general areas will target customers who are looking for getting their remittances exchanged for Omani Riyals or vice versa.
The company will aim to become one of the biggest players in the Omani forex market by the year 2019. It will pursue aggressive expansion strategy to attract customers. Given the rise in entrepreneurial businesses, in Oman, the company will also start targeting them in the later phase.
By the year 2024, the company will start its international operations by opening branches in foreign airports and ensuring that their business customers (expatriates) can conveniently get the company’s services. Moreover, it will also help general customers travelling from Oman to other countries getting the currency exchanged as the company will have established its ground in the market.
Moreover, the company will gather more equity from various investors in order to expand the currency business. The decision of going public or attracting new investors will be taken at that point in time via reviewing the external and internal environment of the market, in which the company is operating. In case, the company does not offers its share in the stock market, then the company will try to get its old business customers to make a partnership via injecting equity into the business.
The company will use the new injected equity to start other financial services i.e. stock brokerage. In this way, the company will have a diversified portfolio, which will mitigate the risks related to foreign currency exchange. Apart from stock brokerage, the company will develop medium term alliances with other companies to pursue lucrative opportunities. These initiatives cannot be taken right now as the company has limited capital and has limited brand equity.


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