Business Plan: Equipment Needed Market Analysis Situational

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SAMPLE EXCERPT:

[. . .] Promotion:

The following promotional measures would be adopted,

1) Brochures: Various promotional tools will be used for the product. The primary one in this regard would be the pamphlets. Pamphlets are a relatively economical form of promotion and they generate good word of mouth.

2) Facebook page: Facebook Advertising has grown in popularity and created quite a stir when it was first introduced. Facebook advertising has been a viable traffic builder and advertising option for small and large size businesses.

3) SMS Marketing: Promotions would also be done through SMS advertising.

Price:

The pricing strategy suggested for this new venture is 'premium pricing'. This strategy would be adopted in order to encourage favorable perceptions among the customers and influence the buyers to assume that expensive services enjoy an exceptional reputation or represent exceptional quality and distribution. Furthermore, the price is justified since there are no direct competitors currently in the market. Therefore, premium pricing can be charged for a highly differentiated service with a unique, one-of-its-kind experience.

Management Plan

Founders Experience

The founders have an experience in dealing with the food business which helps in understanding the nature of the business. The founders also possess the required technical skills for the business to make it a success.

Founders have been working on the project since the past two years and have been analyzing the various factors which can affect the performance of the business. Founders are to be graduated from business school which has groomed them to operate efficiently in the business environment. The purchase of the equipment and machinery will be outsourced and that can pose a threat to the cost structure.

Organizational Chart:

Director Accounts

Director Operations

Director HRM

Director Marketing

Director Finance

Accountant

Web Designer

HR Officer

Investment Manager

Sales Manager

Service Manager

Customer Relations Manager

Above is the planned organizational chart for the business, initially the human required for the business would be less but as the business grows, more personnel will be added to the organizational chart.

Financial Plan

The Company will follow the four main objectives they are:

Profitability

Liquidity

Efficiency

Stability

Project Investment

Item

Cost ($)

Construction cost (all inclusive)

3,000

Shipping furniture & decor

1,500

Equipment & machinery

1,500

Advance rent

2,500

Preliminary expenses

Working capital

1,500

Total

10,500

Pop up Kitchen and Supplies is seeking $7,000 in 5-year, long-term debt financing secured by a combination of business and personal assets. These funds combined with $3,500 of personal equity of the partners will amount to a total of $10,500 for the project investment. All the funds would be loaned to the founders. The assets will be owned by the founders and will be held accountable in case of redemption due to non-payment of the long-term loan.

Startup Costs

Following startup costs will be incurred:

START-UP COSTS

AMOUNT ($)

Office security deposit

10,000

Add: Advance Rent for 3 months

3,000

13,000

Furniture & Shelves

25,000

Telephone Connection

1,000

Security System (CCTV, LCD etc.)

5,000

Air Conditioner

6,000

Miscellaneous

10,000

Staff cost (peons)

7,500

Certification cost

Designing Cost

3,000

Domain Cost (5 years)

Bandwidth Cost

1,500

Total

$73,600

Essentials of financial Plan

For the next 1 year, profits will be reinvested into the business.

The main revenue will be generated by putting ads and promotions for its clients.

Total number of clients: 50

Pro forma income statement

Pop up Kitchen and Supplies

Income Statement

For the year ended

PARTICULARS

AMOUNT ($)

Sales.

24,000

Less: Cost of goods sold.

(6,620)

Gross Profit

17,380

Less: Operating Expenses

Telephone bill

6,000

office supplies

1,200

Repair and maintenance

1,800

selling and admin expense

1,800

interest expense

1,250

Legal & Audit Expenses

Total Operating Expenses

12,250

Operating loss/profit

5,130

Less: Taxes

(1,025)

NET PROFIT

$4,105

Pro forma Balance Sheet

Pop up Kitchen and Supplies

Balance Sheet

As on December

ASSETS

EQUITY

Current Assets

Current Liabilities

Cash

15,348

prepaid rent

3,000

deposits

1,000

capital

26,150

Non-Current Asset

net Profit

4,100

Furniture

2,500

Computer Equipment/air conditioner / sec system

4,100

Certificate cost

Design cost

3,000

Domain cost

TOTAL ASSETS

$30,350

TOTAL EQUITY

$30,350

Assessment of Risk

External risks

The business environment can have a big impact on our business' long-term future. A single political event of importance can have an adverse impact on the business environment. One way to overcome the problems posed by the political situation is to get the business insured against political risk. Moreover, a change of government may lead to an adverse change in the tax rate or the rules and regulations governing the business.

Economic variables also influence the outcomes of the strategies that we have drawn up. High food inflation, high oil prices, energy and food shortages, and high interest rates also pose a threat to our business. The business is heavily dependent on the correct execution of technology. The high costs associated with maintenance and obsolescence of technology will be a problem.

Financial Risk

The business will find it difficult to attract investors to a new venture because the amount of investment we need is a large amount.1. In analyzing costs, we find that our cost of goods sold account for 73% of our revenue. Any high rise in inflation will result in deteriorating gross profit, hence active management of supplies needs to be carried out. High amount of current assets indicate excess liquidity hence better cash management is required. The return on assets and equity are negative in the first year of operations.

Contingency Plan

Save at least 20% of the monthly earnings as reserve money for any unforeseen circumstance like raw material prices shooting upwards or any natural disasters etc.

Production Plan

Manufacturing Process:

Pop up Kitchen will provide its customers with a shipping container and all the required kitchen supplies of the highest quality. The container will also be decorated properly to give it a differentiated look from its competitors. The company will buy shipping containers from Maersk Line, who provides the best quality containers that last for a long period of time. The kitchen supplies will be bought from Ace Mart. Container and kitchen supplies will be bought in bulk therefore the company will get discounts. A detailed plan of all the machinery and equipment required for the business is given below.

Machinery & Equipment:

Machinery and Equipment

Preferable

Brand

Stove

GE Appliances

Deep Freezers

Whirlpool Corporation

Cutlery Set

Cutco Cutlery

Display Racks

Any brand

Air Conditioners

Microwaves

Lighting and Fixtures

Interior and Furniture

Toasters

Sandwich Press

Sandwich Grills

Samsung

LG

Samsung

LG

Black and Decker's

Black and Decker's

Black and Decker's

KITCHEN

Equipment Required:

1. Kitchen Equipment

23

Commercial Fryers

Hot Food Storage

Steam Equipment

Commercial Ovens

Wood Cabinet Carts

Work Tables

Tissue rolls

Cutlery sets

Freezers

Generators

Microwaves

Waste bins

2. Cooking equipment

Toasters

Sandwich Grills

Sandwich Press

3. Kitchen apparels

Aprons

Bandannas

Caps & Hats

Chef Coats

Chef Hats

Face Masks

Finger Guard

Kitchen Gloves

4. Stationary

Register rolls

Sales book

5. Shipping Containers

Decoration Items

Paint

Operational Plan

General Operating Hours:

The business will be open daily from 10:00 AM to 9:00 PM for business dealings and customer facilitation.

Flow of order for goods and services:

The operations of Pop up Kitchen and Supplies would be multi-faceted and would involve the following:

1. Ordering of shipping containers and kitchen supplies

2. Servicing customers

3. Controlling and co-coordinating the activities

4. Maintenance of its equipment and facilities

5. Ensuring that inventory is sufficient.

Layout

The layout of the shipping containers will be entirely customized according to the requirements of the customers. There will be some general patterns available to the customers if they want to select it from there. The customization will be based on outsourcing and the customers will be charged more for availing the customized services.

Human Resource

Initially the business will not require much of a workforce. There will be an executive person who will be responsible for controlling and co-coordinating the activities. He will be responsible for running operations, planning and maintaining quality standards. He will also be responsible for evaluating business periodically.

Technology utilization

Because we are a start-up venture only, we won't be investing in heavy information systems. A desktop computer will be needed which will have a software specific to our business. This will help us in keeping track of our order status, pending orders, stock and inventory and payments and other details.

References:

Barnard, Chester The function of the executive, Harvard University Press, Cambridge Mass, 1938,-page 235.

Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L. Buhl (2002),"Underestimating Costs in Public Works Projects: Error or Lie?" Journal of the American Planning Association, vol. 68, no. 3, 279-295.

Eric S. Siegel, Brian R. Ford, Jay M. Bornstein (1993), 'The Ernst & Young Business Plan Guide' (New York: John Wiley and Sons)

Hamel, G. & Prahalad, C.K. "The Core Competence of the Corporation," Harvard Business Review, May -- June 1990.

J. Scott Armstrong and Kesten C. Greene (2007). "Competitor-oriented… [END OF PREVIEW]

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"Equipment Needed Market Analysis Situational."  Essaytown.com.  December 8, 2012.  Accessed April 18, 2019.
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