Bright Detergents Enterprise Business Strategies - Example

Business: Name: Institution: Date: BUSINESS PLAN FOR BRIGHT DETERGENTS ENTERPRISE BUSINESS NAME: BRIGHT DETERGENTS VISION : To produce excellent and efficient detergents. MISSION: To offer affordable cleaning detergents that meet the required quality standards in order to ensure a cleaner society. OBJECTIVES: To be a top rated detergent manufacturing enterprise To use technology and creativity in all operational areas To be a leading company in improving the quality of products as time demands To ensure transparency in the production, pricing and distribution of detergents EXECUTIVE SUMMARY Bright Detergents is a manufacturing business aimed at the manufacturing of all time detergents. It is a partnership business that managed by the general operational manager together with the sales and marketing manager. The business aims at production of quality and durable all-purpose detergents that are parked in different sizes to suit the financial ability of the customers. The targeted customers include various institutions and local residents who use detergents. The business aims at starting with a small number of employees majorly in the production, sales, transport and finance sector and security department. All these are qualified personnel in their various lines of qualification. The business aims at expanding with time which will entail increase in the numbers of employees. Since it is a new business, it aims at beginning with a small capital share to kick-start the business but this will increase with the progress of the business. Sales will be made from the wholesale of the business but delivery services will also be offered on goods ordered. With the strategies put in place, the business aims at expanding and being a leading detergents producing company in the region. References 17 EXECUTIVE SUMMARY …………………………….…………….….…………………..2 INTRODUCTION…………..…………………….…….…………………..………………..4 Business name and owner……………………………………………..……………………….4 Form of Business Ownership…………………………………………..………………………4 Type of business …………………………………….………………….……………………...4 Product and services……………………………….…………………….………………….….5 Justification for the venture……………………….…………………….……………………...5 Industry analysis………………………………….…………………….………………………5 Entry and growth strategy……………………….……………………….…………………….6 MARKET FEASIBILITY……………………..….…….…….……….……….……….……7 Customers……………………………………….…...…….……………………….…………..7 Market size and share………………………………...….………………………….……….…8 TECHNICAL FEASIBILITY………………………….……………..………….……..……9 Pricing strategy………………………………………....………………………….………..….9 Sales tactics………………………………………………………………………….……...…..9 Advertising and promotion strategy…………………….………………………………..…...10 Distribution strategy……………………………………………………………………..……10 HUMAN FEASIBILITY…………………………..………………………………………...12 Organisation…………………………………………………………………………………...12 Key management personel………………………………………………………….…………12 FINCIAL FEASIBILITY…………………..……………………………...……….………..16 Pre-operational cost…………………………….…………………………………………..…16 Working capital estimation……………………….………………………………………..….16 1. INTRODUCTION 1.1 BUSINESS NAME AND OWNER The business will be established under the name BRIGHT DETERGENTS ENTERPRISE. The business will be owned by the founder, an entrepreneur with skills and experience in Marketing. 1.2 FORM OF BUSINESS OWNERSHIP The business will be a partnership in which one member will take charge of production while the other one will be responsible for sales and marketing. The two categories are based on the technical knowledge and experience of the individual partners in the business making it to be suitably structured as a partnership. The ownership structure of the business will be as follows: Rank Share Contribution General Manager: 50% Operation Manager: 50% The sources of finance for the business include: Personal savings from the individual partners Loan from banks and microfinances Contributions from family and friends 1.3 TYPE OF BUSINESS This will be a manufacturing business which will also have a wholesale shop for the products. It will involve a process of manufacturing general purpose detergents, the products will be parked and stored as they await to be sold. 1.4 PRODUCTS AND SERVICES Detergents will be the main product sold. It will be parked using plastic containers which will contain the name and logo of the business, different sizes will be parked in order to suit the financial position of various customers. Transport services will be accorded to bulk purchases, deliveries on order will also be made to the customers. This product will ensure total removal of dirt thus ensuring high efficiency in cleanliness; the preparation of the detergent is in such a way that it stays for long and does not pose any health threat to the users. 1.5 JUSTIFICATION FOR THE VENTURE Many organizations have been producing detergents for a considerable period of time, there however still exists unsatisfied local demand from the consumers in regard to what the traditional detergents offer. It is as a result of these demands that Bright Detergents is set to be established so as to take care of the needs of the local consumers. Another key reason as to why this business is being established is in order to utilize the locally available materials including the natural products. The business aims at producing products that are economically friendly to the consumers hence preventing them from exploitation of the foreign products having exaggerated prices. 1.6 INDUSTRY ANALYSIS This business falls under the soap industry. It will be established under a small scale but later on the enterprise will expand from small scale to large scale to be capable of serving the wider region. It will be located on a small scale farm and utilize modern technology which is affordable and convenient in terms of production and general operations. An average of four employees will be recruited each being a specialist in either production, accounting, transport and the cleaning department. The level of competition in the soap industry is high since it is a product that is used on a daily basis and is an industry that has been long ventured in, profitability will depend on the sales made in relation to the cost of production. It is not greatly affected by seasons but tends to be on a high during the rainy season due to the effect of the rain on the cleanliness of the surrounding. 1.7 ENTRY AND GROWTH STRATEGY Seeking entry into the market, the business will offer samples to the customers to test the authenticity and quality of the product. The business will also advertise the product using banners, sign boards and also through the local media station. Discounts will then be offered to the regular customers as a way of maintenance. Workers will be expected to uphold high standards of integrity and courtesy towards the customers. The various strategies will be laid down to seek market in other regions so as to boost the growth of the business. The business gains its strength from its identity and connection with the local people; it will also give products that are financially considerable to all the social classes. Since it will be able to reach people at a more personal level, it stands a higher chance of acceptance and progress. Once it has picked up, the business will establish similar branches in different parts of the region, a larger production plant will be established to carter for the increased demand. More staff will be employed and wider publicity of the product shall be made. 2. MARKET FEASIBILITY 2.1 CUSTOMERS The business targets potential customers from institutions and local residents Institutions: These will include schools and organizations. Schools comprise of an average of 500 to 1000 students each and within the schools, departments exists each involving either students or staff members and require cleaning on a daily basis. Organizations such as research organizations and other production companies also have departments whose cleanliness needs to be maintained regularly. These institutions will require the services of these detergents in order to ensure cleanliness. In the detergents, the institutions will be looking for durability since they always purchase in bulk to serve a given duration of time. They will also be looking at safety of the products since it involves the health of the staff and students. Performance and economy will also be a factor they consider since they want to achieve great cleanliness standards at an affordable cost. These institutions are expected to purchase the product either weekly, monthly or after a given financial year, products will be supplied to them upon an order. Payment is expected to be made either by cash or through cheques within an agreed duration of time either on delivery or after a given period. Local residents: These are also key customers to the business. They are located within a range of 100m to 2 km from the business. Most of them comprise of families with different financial standards and some are students from institutions in the region surrounding the location of the business. These families are a cosmopolitan group of people with different occupations but considering on the area they stay, they comprise basically of the middleclass economy. Factors they will tend to consider in the product include its affordability, safety and performance. Convenience or the product is also an important factor and others may tend to mind about the durability. The products will be accessible for acquisition from the wholesale of the business from 8am to 6pm while those who will order in bulk will have the products delivered to their vicinity. 2.2 MARKET SIZE AND SHARE Bright detergents will have a market size spread in the whole region of its location. The market will, at the beginning, have a potential share of 40% against its two competitors which include Godling oil and detergents refineries and Bidco soaps and Detergents Company who supply their products in the market. Golding has got a market share of 35% while Menengai has a market share of 25%. Currently, the total market share is 10,000 therefore: Bright Detergents 40×10000 ꞊ 4000 customers 100 40×360° ꞊ 126° 100 Golding Ltd 35×10000 ꞊ 3500 customers 100 35×360° ꞊ 108° 100 Menengai Soaps 25×10000 ꞊ 2500 customers 100 25×360° ꞊ 90° 100 3. TECHNICAL FEASIBILITY 3.1 PRICING STRATEGY The pricing of the products and services that the business will offer will be based on several factors. These factors include: purchasing power, cost price of the product or service, competitors price, market forces and the government controls. The cost of labour and raw materials will also have an influence in the marketing strategy. The price of the products will be variable; this is in relation to the stated factors. In order to induce customers, the business will at the beginning of its operation set the price of the products relatively high but with every purchase there will be an added free parked detergent attached to the sold product. Regular customer will at the beginning be given discounts depending on how frequent they purchase the product. The price of the product will considerably be dropped by small percentage over time to maintain the first customers and induce other customers. The price will drop down to a standard rate which will then then be maintained and regulated in accordance to the market forces. The business will produce cards with which points will be gained very time one purchases a product, credit will then be given in relation to the number of points a customer has or after acquiring a given threshold. 3.2 SALES TACTICS Bright Detergents will engage in both direct and indirect selling. Direct method will be used to provide service to the local residents and the surrounding institutions. Through direct service method, there will be a better understanding and relationship between the customers and management. The management will be able to get the opinion of the customers concerning the product and service and also what they feel should be improved. Indirect sales method will be employed to target far and potential customers. The company will employ a salesman who will be responsible in reaching the distant potential customers and delivering goods to them. The management will ensure that the recruited salesman has the necessary skills and experience to perform the task. Their motivation will be through commissions received upon selling of products and acquiring new customers. Through direct selling, the company will advertise posts for the sake of recruitment, the recruited individuals will be paid in accordance to the terms of contract, best performance will be rewarded through precognition or promotion and salary increment, this is done in order to boost morale and promote hard work. 3.3 ADVERTISING AND PROMOTION STRATEGY Bright Detergents is a startup business; the business will use the basic advertisement and promotion strategy in order to create awareness concerning the business. These methods include: Posters and banners: These will be placed in strategic locations of the surrounding regions. Some of these locations will include commercial centers, social places and hospitals, along road networks among other places. Partnership with other business: The Company will collaborate with well established businesses who will display the company products at their centers in order to reach more people. Direct promotion: Few individuals will be recruited to participate in field advertisement. This will entail engaging local citizens on the roads, their residential places and informing them about the product while also convincing them to purchase it. The advertisement is aimed at promoting the image of the product in terms of its efficiency and affordability. It will communicate the contents of the product and the kind of service it delivers. The aim of the product in the market and its standout qualities will also be presented. 3.4 DISTRIBUTION STRATEGY The business will ensure an appropriate channel for the distribution of its products. This is important since it is through a proper distribution channel that will favor the growth of the business. The manufacturer will be Bright Detergents; the products of the company will be distributed to institutions and local residents who form the majority of its customers. While some products will be delivered by the company to the targeted customers, other products will be picked from the wholesale or retailer shops. The chain of distribution that will be used by the company will include: Manufacture −−−−−−> Consumer In this case, Golding Detergents will be the producer of the goods and institutions such as schools and companies including residents being consumers. Manufacturer −−−−−−> Retailer −−−−−−> Consumer Golding will be the manufacturer who will distribute products to retailers; the customers who can be the retailers will acquire the product then distribute them. Manufacturer −−−−−−> Wholesalers −−−−−−> Retailer −−−−−−> Consumer Here, the products will be stored at the company wholesale to which retailers will come and buy then sell it to the consumers These products will be distributed by means of a motorbike but this will advance once the business grows. 4. HUMAN FEASIBILITY 4.1ORGANIZATION The business will employ a democratic style of leadership, in this style; laws and regulations of the business will be made by the management and then communicated to the other members. The views of workers in the organization and the stakeholders will also be considered during the time of decision making. The organization structure will entail: General Manager ↓ Operation Manager ↓ ————————————————————— Production Sales and Marketing Personnel Personnel ↓ Accounts clerk ↓ Transport personnel ↓ Security personnel 4.2 KEY MANAGEMENT PERSONNEL Since the business is a partnership, the general and operation manager will hold the key authority and responsibility of the business. The direction of how the company will be run and the decisions made will lie upon the two top most authorities. The general manager will be in charge of ensuring the business abides by the required legal standards, ensuring the finances of the business are well maintained and that it is running operating under the laid down objectives. The operation manager will be in charge of all business operations and ensuring that all departments is operation appropriately. He will supervise all the workers and ensure that the decisions made are being followed. Other personnel will include the Production personnel, Sales and marketing personnel, Accounts clerk, Transport personnel and Security personnel. Position Qualification Duties and Responsibility General Manager Well educated with good managerial skills In charge of Legal and financial stability of the business Operational Manager Well educated with good managerial skills Supervises general all business operations and ensure rules are followed Production personnel Well educated with scientific knowledge of production In charge of production of detergents and packaging Sales and Marketing personnel Educated with business skills in sales and marketing Conducts sales operations and markets the company Accounts clerk Qualified accounts clerk. Maintains company books of accounts and workers payment Transport personnel Qualified with driving and maintenance skills Transportation of raw materials and finished products. Security personnel Should have attained secondary school level education, Have good conduct with sound mind. Age 25-30 In charge of security around the company premises. 4.3 DUTIES AND RESPONSIBILITIES General Manager: Decision making on the running of the company Ensuring that the company abides by the legal county laws and regulations Ensuring the financial position of the company is well maintained Searching for wider market and opportunities for the business Operation manager: Decision making on the running of the company Supervises all the activities of the company Ensure that the company rules and regulations are being followed Engagement of workers Production personnel: Preparation of list of raw materials required Production of detergents Quality control Packaging of detergents Sales and marketing personnel: Marketing of the company products Conduction of sales operation for the company Negotiation of prices Engagement of customers Accounts clerk: Will be the cashier Handle the daily sales money Recording the financial matters of the business Balancing books of accounts Preparing business budget Preparation of payrolls Transport personnel: Transportation of raw materials and finished products Assisting in packaging of goods Deliver and receiving of mails and letters Security personnel: In charge of all security matters 4.4 RECRUITMENT, TRAINING AND PROMOTION The recruitment of employees will be conducted through advertisement of the required posts and qualifications. Advertisement will be done by use of posters that will be placed in different public locations. Letters will also be sent to nearby institutions including churches where the targeted persons will be notified. Interested personnel will be required to apply declaring their interest and stating their qualification. The application letters will then be sampled and the qualified individuals will be called for interview. The interview will be conducted by the general and operation manager The qualified personnel will be offered the job. Training will then follow where by the new staff will first be informed of the objectives and goals of the company. They will then be trained on efficiency and competency in work. Training will also entail market analysis, customer relations, and responsibilities of each position in the company. Workers will also be trained on first aid and fire risk management skills. Training will be done within the first three weeks of the commencement if the business. Promotion will depend on individual worker’s performance and dedication to the business. Their contribution to the business will also be rated and rewarded. 5. FINANCIAL FEASIBLITY 5.1PRE-OPERATIONAL COSTS EXPENSES COST $. INITIAL RENT INITIAL STOCK EQUIPMENT INTSTALATION ELECTRICITY INSTALATION WATER INSTALATION WORKSHOP LAYOUT 80 140 40 50 50 150 TOTAL COST 51000 5.2 WORKING CAPITAL ESTIMATION Working capital ꞊ Current Assets – Current Liabilities These include: ITEM YEAR1 $ YEAR 2 $ YEAR 3 $ Current Assets Cash in hand Cash at bank Debtors Stoke Total Current Liabilities Creditors Insurance Tax Total WORKING CAPTIAL 140 800 100 140 1180 300 100 100 500 68000 240 800 100 140 1180 300 100 100 500 78000 340 800 100 140 1180 300 100 100 500 88000 5.3 PROFORMA INCOME STATEMENT ITEM YEAR 1 $ YEAR 2 $ YEAR 3 $ Sales Less cost of sales 26,300 7,205 9,800 2,940 10,200 3,200 Gross Profit 19095 6860 7000 LESS EXPENSES Creditors Salaries Transport Rent Water Electricity Maintenance Advertisement Insurance License 400 11712 900 960 600 400 150 300 150 90 500 11712 900 960 600 400 150 300 150 90 600 11712 900 960 600 400 150 300 150 90 Trading profit 3433 3533 3633 LESS 5% TAX 171.65 176.65 181.65 NET PROFIT 3,261.35 3,356.35 3,451.35 Gross profit ꞊Sales - Cost of sales ꞊ 2,6300 – 7,205꞊ 19,095 Trading profit ꞊ Gross profit – Expenses 19,095- 15,662 ꞊ 3,433 Net Profit ꞊ Trading profit- Taxes ꞊ 3433- 171.65 ꞊ 3,261.35 References Abrams, R. (2003). The successful business plan. Palto Alto, Calif.: Planning Shop. Armstrong, M. (2010). Armstrong's essential human resource management practice. London: Kogan Page. Finch, B. (2010). How to write a business plan. London: Kogan Page. Levinson, J. and McLaughlin, M. (2013). Guerrilla marketing for consultants. Hoboken, N.J.: Wiley. Mondy, R., Noe, R. and Gowan, M. (2005). Human resource management. Upper Saddle River, N.J.: Pearson Prentice Hall. Pinson, L. (2008). Anatomy of a business plan. Tustin, CA: Out of Your Mind and Into the Marketplace. Appendix A Start-up Expenditures and Expenses Worksheet Item Total Cost Cash Required Land _____Nil_____ __________ Capital Equipment ___20,000_______ __________ Computer ____5000______ __________ ___________ __________ __________ ___________ __________ __________ Beginning Inventory __30,000________ __________ Start up Supplies __15,000________ __________ Licenses and Permits ___4,000_______ __________ Leasehold Improvements __3,000________ __________ Utility hookups & Installation __5,000________ __________ Advertising (Preopening) __6,000________ __________ Insurance __4,000________ __________ Other __10,000________ __________ _______________ __________ __________ Total Estimated One-Time Cash Requirements _102,000_________ __________ Start-up Operating Expenses Estimate No. of Months Total Cash Item Monthly Expense X Before Break even = Required Owners Salary ___2,000_______ __________ __________ Employee’s salary, wages, benefits ___1,500_______ __________ __________ Rent __7,000________ __________ __________ Promotion expenses __12,000________ __________ __________ Supplies and postage __1,000________ __________ __________ Vehicle Expenses __5,000________ __________ __________ Telephone __1,000________ __________ __________ Travel __3,500________ __________ __________ Interest __500________ __________ __________ Maintenance __700________ __________ __________ Other ___3,000_______ __________ __________ ____________ __________ __________ __________ Total Cash Required to Cover Operating Expenses _35,200________ Plus: Total One-Time Cash Requirements (Previous Table) _137,200_________ Add 10% Safety Factor _150,920_________ Read More