HR Consulting Business Plan Template
If you want to start a human resource consulting business or expand your current HR consulting firm, you need a business plan.
The following HR Consulting business plan template gives you the key elements to include in a winning human resources plan.
Sample HR Consulting Business Plan Template
Below is an HR consulting business plan example with each of the key sections to help you write an HR consulting business plan for your own company.
I. Executive Summary
Business Overview
[Company Name] is a new human resources (HR) consulting firm located in [location]. Our mission is to provide local technology startups with a variety of HR services. These startups often don’t have the resources or need to hire a permanent HR team. Therefore, we can provide them with any temporary services they require, whether it be recruitment and onboarding or payroll management. With our experience, management team, and connections, [Company Name] aims to stand out as the #1 HR consulting firm for businesses in the local tech sector.
Services
[Company Name] will provide a range of HR services for our clients. These services include, but are not limited to:
- Recruitment and onboarding
- Training and development
- Compensation and benefits
- Payroll management
- HR analytics
- Employee relations
- Performance management
Customer Focus
[Company Name] will collaborate with local technology startups in need of HR services. Tech startups can go through rapid ups and downs, and therefore, don’t always have the resources or the need for a permanent HR team. However, they still need HR services at some point and look to consultants to help them out.
We will primarily serve tech startups located within 20 miles of [location]. However, we are open to working with tech companies that are beyond the startup phase. We will also offer remote services so we can collaborate with companies located outside the [location] area as well.
Management Team
[Company Name] is led by [Founder’s Name] who has been a successful HR professional for [X] years. She has held a variety of HR roles, most recently being the Chief of Human Resources for [tech company]. Additionally, she earned a Master’s in Human Resource Management from [University]. She is eager to utilize her education and years of expertise in a consultant role.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company is providing valuable HR services to a target market that prefers to outsource or hire consultants for their HR needs.
- [Founder’s Name] has a track record of success in the HR industry and already has numerous connections from years of networking.
- [Company Name] will provide high-quality HR services for a moderate price that is competitive with similar consulting firms.
Financial Highlights
[Company Name] is currently seeking $270,000 to launch. Specifically, these funds will be used as follows:
- Office design/build: $100,000
- Technology and equipment: $50,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new human resources (HR) consulting firm located in [location]. Our mission is to provide local technology startups with any HR services they need. These startups often don’t have the resources or need to hire a permanent HR team. Therefore, we can provide them with any temporary services they require, whether it be recruitment and onboarding or payroll management. With our experience, management team, and connections, [Company Name] aims to stand out as the #1 HR consulting firm for businesses in the local tech sector.
[Company Name] is led by [Founder’s Name] who has been a successful HR professional for [X] years in the tech industry. After a decades-long career in HR, [Founder’s Name] is ready to utilize her knowledge in a consulting role where she can help multiple aspiring startups at the same time. Her combination of experience and education will be the key to our success.
[Company Name]’s History
[Founder’s Name] incorporated [Company Name] as an S-corporation on [date of incorporation]. The business is currently being run out of the [Founder’s Name]’s home office but will move to an office location once a lease is finalized.
Since incorporation, [Company Name] has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Developed the company’s name, logo, and website located at [website]
- Developed an initial client base
- Determined equipment and fixture requirements
[Company Name]’s Products/Services
[Company Name] will provide a range of HR services for our clients. Some of these services include:
- Recruitment and onboarding
- Training and development
- Compensation and benefits
- Payroll management
- HR analytics
- Employee relations
- Performance management
III. Industry Analysis
HR is an essential department for any business. However, startups rarely have the resources or the need to take on a full HR team. Until they become fully established, they only need HR professionals for certain phases or projects. Because of this, HR consulting firms are often in great demand.
In fact, HR consultants and outsourced professionals have never been in higher demand. With the economy in flux in recent years, it is much cheaper for companies (particularly startups) to invest in outsourcing or consultants to help with their workload. Therefore, many consulting firms are seeing a boom in business even as other major industries struggle.
Furthermore, the future of HR consulting looks bright. According to Research And Markets, the HR advisory market is expected to grow at a compound annual growth rate (CAGR) of 6.8% until 2026. That growth will continue for the rest of the decade with a predicted CAGR of 8% expected from 2026 to 2030. Therefore, these services will be in hot demand for the foreseeable future.
Moreover, there are currently over 71,000 startups in the United States, and that number is expected to grow due to the increased interest in entrepreneurship. Many of these businesses will need HR consultants to help them with their HR processes. Therefore, it has never been a better time to start an HR consulting firm. With such a promising future for the industry and [Founder’s Name]’s experience, [Company Name] is sure to be successful.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve startups and tech companies located within 20 miles of [location]. These companies will include small workforces that do not have the resources or need to take on a permanent HR team.
Customer Segmentation
[Company Name] will primarily target the following customer segments:
- Local tech startups: Our primary segment will be local tech startups located within a 20-mile radius. These companies are often short-staffed and will be in great need of an HR consultant.
- Nationwide tech startups: We also offer our services remotely so we will be available to help other startups that are not located in the [location] area.
- Other local tech companies: Though tech companies usually have an HR team once they leave the startup phase, we will collaborate with tech companies that still need additional HR services.
V. Competitive Analysis
Direct & Indirect Competitors
The following establishments are located within 20 miles of [Company Name] and therefore provide direct or indirect competition.
Raleigh Hills Recruitment Consultants
Raleigh Hills Recruitment Consultants is a small local recruitment consulting firm that specializes in helping small to medium businesses. They focus primarily on recruitment-related services such as candidate selection, hiring, onboarding, and training. For decades, local businesses have depended on Raleigh Hills Recruitment Consultants whenever they need to rapidly grow their business.
Tech Answers, Inc.
Tech Answers, Inc. provides a wide variety of outsourcing solutions to local tech companies. These include HR, marketing, customer services, and accounting services. For two decades, Tech Answers has been the answer to startups and small tech businesses needing outsourced professionals.
Fountain City HR Solutions
Fountain City HR Solutions have been a dependable HR provider for decades. They are a major local firm that offers a variety of HR solutions to both large and small local companies. Their reputation and extensive services have helped them develop long-lasting connections with some of the biggest corporations in the area.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Relationships: Having lived in the community for [X] years, [Founder’s Name] knows all of the local leaders and influencers in the tech industry. Furthermore, she will be able to draw from her existing personal and professional relationships to develop an initial client base.
- Management: The Company’s management team has X years of HR experience that allows them to serve clients in an improved and more sophisticated manner than the competitors.
- Great services at an affordable price: The complete array of HR services offered by [Company Name] nearly equals the most premium-positioned competitor, [Competitor Name]. However, [Company Name] will offer these services at a much more affordable price.
- Focus on tech: Most of our competitors do not have a focus or specialized experience working with tech companies. This will give us a huge advantage as [Founder’s Name]’s experience and network will make us more attractive to these businesses.
VI. Marketing Plan
[Company Name] seeks to position itself as a respectable and highly-rated HR consultant firm. The firm will charge an hourly rate depending on the skills needed and the duration of the project.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Client-focused HR services, where the Company’s interests are aligned with the client
- Service built on long-term relationships
- High-quality work across a variety of services
Promotions Strategy
[Company Name] expects its target market to be tech businesses located within 20 miles of [location]. [The Company’s] promotion strategy to reach these clients includes:
Social Media Ads
Most of the promotional campaigns will be through social media, where we can customize the audience that will be able to see it.
Local Publications
[Company Name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, business publications, and similar channels will be a major promotion effort.
Community Events/Organizations
[Company Name] will promote itself by distributing marketing materials and participating in local community events, such as festivals or sporting events.
Industry Events
By attending regional conferences, association meetings, and online events, [Company Name] will network with industry leaders and seek referrals to potential clients.
Direct Mail
[Company Name] will blanket local businesses surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], and provide incentives to utilize our services.
Referrals
[Company Name] understands that the best promotion comes from satisfied clients. The company will encourage its clients to refer other individuals by providing discounts on future services for every new client produced. This strategy will increase in effectiveness over time.
Special Offers
Offers and incentives are an excellent approach to bringing in new clients. The company will introduce special offers to attract new consumers and encourage repeat services, which will be quite advantageous in the long run.
Website/SEO
[Company Name] will develop a professional website that showcases the services we provide and our history of success and excellence. It will also invest in SEO so that the company’s website will appear at the top of search engine results.
Pricing Strategy
[Company Name]’s pricing will be moderate, so clients feel they receive great value when receiving our HR services. Clients can expect to receive quality HR services at a more affordable price than what they pay at a premium HR firm.
VII. Operations Plan
Functional Roles
[Company Name] will need to fulfill the following functional roles to execute its business plan and ensure the company’s success:
Service/Consulting Functions
● Cold call/cold email potential clients
● Network with companies needing HR professionals
● Provide requested HR services
Administrative Functions
- Social media management
- Website management
- Bookkeeping
- Marketing
- Hiring and training staff
- Maintenance functions
- Other general administrative functions
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been a successful HR professional for [X] years. She has held a variety of HR roles, most recently being the Chief of Human Resources for [tech company]. Additionally, she earned a Master’s in Human Resource Management from [University]. She is eager to utilize her education and years of expertise in a consultant role.
Hiring Plan
Hiring Plan
[Founder’s Name] will serve as [Company Name]’s CEO but will provide HR services until she has enough personnel to take over the workload. In order to launch our firm, we need to hire the following personnel:
- HR professionals (3 to start)
- Administrative assistants (1 to start)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the HR services provided.
The main cost drivers for the company’s operation will be salaries, marketing, and the lease for the office space.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $270,000 to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:
- Office design/build: $100,000
- Technology and equipment: $50,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Average Number of Clients | |
|---|---|
| FY 1 | 42 |
| FY 2 | 63 |
| FY 3 | 96 |
| FY 4 | 162 |
| FY 5 | 243 |
| Annual Rent | $36,000.00 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
