Holding Company Business Plan Template
If you want to start a Holding Company or expand your current Holding Company, you need a business plan.
The following Holding Company business plan template gives you the key elements to include in a winning business plan. It can be used to create a real estate holding company business plan, an intermediate holding company business plan, or a mixed holding company business plan.
Holding Company Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here] is a newly established holding company that was formed to be the controlling stockholder in other companies it has invested in. [Company Name] will own assets in both public and private companies, ranging from real estate and manufacturing, to retail and pharmaceutical. The company solely performs oversight and is not involved in managing or day-to-day operations.
Benefits
[Company Name] will provide a number of benefits to its subsidiaries. Those benefits include risk mitigation, asset protection, tax minimization, central control, flexibility for growth and development, and succession planning.
The primary benefit for [Company Name] is to minimize the risk for its subsidiaries that forming and operating a company entails. If the subsidiary were to be sued, the liability would not exist, as the holding company would assume the risk as it is a controlling shareholder. Risk management is enhanced by dividing its assets across multiple companies.
Customer Focus
[Company Name] will primarily serve small to midsize companies across the United States. The demographics of these companies are as follows:
- Must have profits of at least $3 million per year
- Must be in business for at least 2 years
- Must have a Board of Directors in place
- Must be a growing industry
- Has not been audited by the IRS or SEC
[Company Name] will primarily target new and growing businesses that show a growing profit margin for its shareholders.
Management Team
[Company Name] is led by [Founder’s Name], a venture capitalist who has been investing in the stock market for over 40 years. He has worked at hedge funds, venture capital firms, and investment banks throughout his long career. As an investor with all the necessary trading experience, certifications, and licenses, he has decided to move on to the next phase of his career and pursue a holding company. [Founder] has made a lucrative career in investment management and analyzing the growth and profitability of various companies and industries. With money to invest and a strong legal team behind him, [Founder] will be forming a holding company.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company will be led by a seasoned investor and business strategist.
- The company will conduct its proper due diligence on the profitability and viability of each subsidiary it plans to hold.
- The company has a strong legal team behind it to perform the necessary risk mitigation.
- The holding company will allow its subsidiaries to operate without their interference.
- [Company Name] will also decrease the subsidiaries’ tax liability by strategically basing certain parts of its businesses in jurisdictions that have lower tax rates.
Financial Highlights
[Company Name] is seeking a total funding of $100,000 of debt capital to open the holding company.
- Office design/build-out: $50,000
- Legal fees and retainer: $25,000
- Salary for Founder: $25,000 to pay for the first three months of salary until the first shareholder distribution is made
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], located in [insert location here] is a newly established holding company that was formed to be the controlling stockholder in other companies it has invested in. [Company Name] plans to own assets in both public and private companies, ranging from real estate and manufacturing, to retail and pharmaceutical. By conducting the proper due diligence, [Company Name] will mainly look to hold companies whose balance sheets are stronger than its competition. As long as the subsidiary company is performing well against its competitors, [Company Name] will add it to its list assets it holds. The company solely performs oversight and is not involved in the management or or day-to-day operations.
[Company Name] is owned and managed by [Founder’s Name]. [Founder] has made a career in finance, investments, and hedge fund management. His career spans more than 40 years and over that time he has accumulated a great deal of wealth for himself and the entities he manages. His skills include asset management, corporate takeovers, mergers and acquisitions, and successfully handling stock market volatility.
Throughout his career, [Founder] has networked with hundreds of hedge fund managers and corporate CEO’s. They have all approached him to form a holding company for its newer entities that require that top level in the organization for its board of directors and shareholders. By spreading his interests out across various industries, [Founder’s Name] will be the holding company for multiple assets.
[Company Name]’s History
[Founder’s Name] has hired a consulting firm to conduct the due diligence on the entities requiring a holding company to ensure they have the proper components in place. [Company Name] will require a complete board of directors in place, a strong balance sheet and cash flow statement, established CEO, and a succession plan in place.
Since incorporation, the Company has achieved the following milestones:
- Engaged consulting firm to begin its due diligence
- Developed the company’s name, logo, and website located at [website]
- Engaged a legal and accounting team
- Set up the corporate office as the holding company headquarters
- Began recruiting key employees with previous holding company experience
[Company Name]’s Benefits
Below are [Company Name]’s benefits:
- Risk mitigation
- Asset protection
- Tax minimization
- Central control
- Flexibility for growth and development
- Succession planning
III. Industry Analysis
Holding companies have fared well for decades and are expected to continue to perform well over the next five years. Success will be driven by strong company leadership, robust and efficient operational models and talent management.
Key drivers include:
- Using technology to better engage with clients and deliver on their expectations
- Since holding companies are a highly relationship-oriented business, firms that can better
engage with clients and deliver on their expectations will likely be more successful. - Artificial Intelligence solutions are increasing employee engagement and productivity
- An improving economic outlook will likely lead to increased capital inflows; moreover, improved performance of the underlying assets is expected to boost revenue and profitability
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will primarily serve small to midsize companies across the United States. There are numerous startup businesses or organizations that have been in business for at least 2 years that have already achieved profits exceeding at least $2 million. These companies are in industries such as pharmaceuticals, technology, real estate, or retail.
Customer Segmentation
The Company will primarily target the following three customer segments:
- Pharmaceutical companies: pharmaceutical companies usually have healthy balance sheets and if managed correctly, are very profitable and sustainable.
- Real estate ventures: one of the most stable industries is real estate and there are numerous ventures that are acquiring and/or building land, multifamily housing, and industrial buildings.
- Technology companies: Tech companies are riskier companies to invest in, but with the proper oversight, can be very profitable.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses have the same business profile as [Company Name], thus providing either direct or indirect competition for customer clients:
Lithium Holdings
Lithium Holdings buys and grows legacy, family-owned industrial companies. It is a multi-generational family-owned business as well. Upon acquiring industrial companies, Lithium Holdings delivers high-quality power transmission equipment along with janitorial, restaurant, and industrial supplies. As a veteran-owned company, they are able to tap into the veteran and military-owned community. Lithium offers a much-needed layer of oversight for small, family-owned industrial companies who do not have the operational expertise or bank account for operational expenses. Lithium Holdings has the financial backing and credit worthiness to apply for small business loans for the industrial companies it acquires. The company is able to provide a strategic growth plan for an industrial company that it otherwise does not have. At this time, the company focuses on companies in the southwestern United States, but may grow to other regions as their geographic footprint allows.
Deer Holdings
In business for over 50 years, Deer Holdings has acquired, invested in, grown, and sold companies across various industries. Today, Deer Holdings invests in businesses that operate within the real estate, infrastructure, and financial services space. Deer’s real estate companies are specifically focused on infrastructure assets, single-family rentals, federal and state low-income housing, tax credits, large living communities, mixed-use communities, development, and military communities.
Deer’s financial services companies focus on providing debt capital to owners of multifamily, senior housing, office, retail, industrial, and self-storage properties through proprietary loan products as well as products offered through Fannie Mae, Freddie Mac, and FHA. They also focus on companies that deliver high-quality investment ideas and investment banking services to institutional investors and corporate clients. In addition to real estate and banking, Deer has invested in a multitude of companies that are within the energy and utility industries. One of their most successful companies is an electrical contractor and owner of utility systems that specializes in the provision of services to the military under privatization contracts.
Greenfield Companies
Greenfield Companies is a multinational conglomerate that operates in the United States. Headquartered in [location], Greenfield prefers to invest in companies in long-term investments in publicly traded companies, and has recently begun to invest in wholly-owned subsidiaries. Their diverse range of businesses include confectionery, retail, railroads, home furnishings, home products, jewelry, retail clothing, and several regional electric and gas utilities.
Greenfield was established over a hundred years ago when it got its start investing in textile manufacturers and railroads. The company was one of the few large shareholder companies that was able to survive the Great Depression, despite it being a freshman company at the time. Throughout the decades, Greenfield has maintained being a family-led company, with the great great-great-grandson of Benjamin Greenfield now at the company’s helm.
Greenfield Companies is a major player in the stock market and is often studied as a model of how to ride market volatility during recessions and instability in the national economy.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Senior Leadership: [Founder Name] is an active player in the stock market and is adept at studying companies and assessing their financial volatility.
- Oversight: While [Company Name] will not act as an official oversight of leadership of the companies it acquires, the company will be available and able to provide knowledge and expertise when requested.
- Tax Minimization: [Company Name] is skilled at providing tax scenarios for its companies that are more beneficial to the shareholders. It involves moving corporate locations to tax-friendly states, finding loopholes, and maximizing on available tax credits.
- Asset Protection: [Company Name] will employ the best legal, tax, and accounting teams to ensure that all entities involved are not burdened with heavy tax fines, lawsuits, or bankruptcies.
- Proven leadership
- Complete asset protection
- Beneficial tax scenarios
- Oversight and accountability
- Knowledgeable team of experts
- General and administrative functions including bookkeeping, scheduling, and filing
- Hiring and training staff
- Due diligence staff
- Brand management
- Legal, tax, and accounting tasks
- Administrative Assistant: 1 full-time employee to manage the day-to-day operations and assist [Founder] with managerial duties.
- Legal staff: 3-4 full-time attorneys who will focus on ensuring that all acquisitions made by the holding company is free of lawsuits and any legal implications
- Accounting staff: 3-4 CPA’s who will focus on ensuring that all appropriate and beneficial tax and account measures are being taken
- Due diligence staff: 3-4 full-time employees who are tasked with researching all prospective subsidiaries to ensure that it will be a beneficial acquisition
- Brand manager: 1 full-time employee who will be responsible for developing and launching the brand; manage the website, and LinkedIn account.
- Salaries
- Computers and software
- Licensing
- Business Insurance
- Lease on business location and utilities
- Taxes
- Office design/build-out: $50,000
- Legal fees and retainer: $25,000
- Salary for Founder: $25,000 to pay for the first three months of salary until the first shareholder distribution is made
VI. Marketing Plan
[Company Name] seeks to position itself as a premier holding company in the United States. Subsidiaries can expect to place its interests in the companies’ hands, so it can focus on providing the specific products and services that it intends to specialize in.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
Promotions Strategy
[Company Name] expects its target market to be companies operating in certain industries. [The Company’s] promotion strategy to reach these companies includes:
Industry Publications
[Company Name] will invest in strategically placing ads in industry publications such as finance newsletters, magazines, and journals. The target audience for these publications are usually the decision makers in their companies.
Social Media
[Company Name] will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on social media accounts having to do with finance. It will use targeted marketing to appeal to the target demographics. It will focus mainly on LinkedIn social media accounts, rather than other social media channels like Facebook and Instagram.
Major Publications
The company will also invest in advertising in selected larger publications until we have achieved significant brand awareness. These major publications will include the Wall Street Journal, Bloomberg, New York Times, the New Yorker, Harvard Business Review, etc.
Website/SEO
[Company Name] will invest heavily in developing a professional website that displays all of the benefits the holding company has to offer. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Industry Conferences
[Company Name] will participate in all of the industry conferences and trade shows to network with decision makers of certain companies. This will be done to increase brand awareness and recognition.
Corporate Sponsorships
[Company Name] will invest heavily in sponsoring certain industry and large events, such as galas, golf tournaments, luncheons, and various large charities.
Consulting
[Company Name] will also advertise consulting services as a precursor to eventually sell its holding company as a benefit. If a subsidiary company receives informative consulting from a trusted advisor, they are more likely to engage [Company Name] as its holding company.
VII. Operations Plan
Functional Roles
[Company Name] will carry out its day-to-day operations as a holding company. There will be numerous administrative functions involved.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company Name] anticipates using the services of X employees, divided into the following roles.
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 owned and led by [Founder’s Name]. [Founder] has made a career in finance, investments, and hedge fund management. His career spans more than 40 years and over that time he has accumulated a great deal of wealth for himself and the entities he manages. His skills include asset management, corporate takeovers, mergers and acquisitions, and successfully handling stock market volatility.
Throughout his career, [Founder] has networked with hundreds of hedge fund managers and corporate CEO’s. They have all approached him to form a holding company for its newer entities that require that top level in the organization for its board of directors and shareholders. By spreading his interests out across various industries, [Founder’s Name] will be the holding company for multiple assets.
Hiring Plan
[Founder] will serve as the Owner and Manager of [Company Name]. In order to launch, he needs to hire the following personnel:
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from its stockholder distributions. The company will acquire various subsidiaries to be the holding company for. It will position itself to be the majority stockholder, and will receive quarterly and annually distributions. The office lease, office equipment, supplies, and labor expenses will be the key cost drivers of [Company Name]. The major cost drivers for the company’s operation will consist of:
Ongoing marketing expenditures are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $100,000 of debt capital to open its holding company. The capital will be used for funding capital expenditures such as office build-out, hiring legal, accounting, and due diligence teams, beginning office inventory, marketing and branding expenses, and Founders salary.
Specifically, these funds will be used as follows:
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 |
