Start-Up Business Plan - Assignment Example

START - UP BUSINESS PLAN Name: Course: Instructor: Institution: City: Date Table of Contents Executive Summary 3 Mission 3 Objectives 4 Keys to Success 4 Company Ownership 5 Products 5 Market Analysis and Summary 8 Market segmentation 8 Industry Analysis 9 Distribution channels 9 Competition analysis 10 Marketing and Sales Strategy 11 Promotion Strategies 11 Sales strategy 12 Management and Personnel 12 Critical Risk Factors 13 SWOT ANALYSIS 13 Financial Plan 14 Breakeven Analysis 15 Cash Flow Projections 15 Balance Sheet Projections 16 Conclusion 17 References 18 Executive Summary BBT is a private limited company with its location at DADA. The company shares will be fully owned by the company founder who is also the owner. BBT Company limited will be selling clothes such as men’s wear, women’s wear, junior’s wear, children’s wear and sportswear. The company outlines marketing strategies and the competitors. The company’s competitors include, The Gap, Witchery and Xenia boutique. The marketing strategies of the company include Product differentiation, creation of relationship-oriented business, fostering corporate social responsibility and concentrating on diversified communities as the target market. The study projects the company sales, expenditures and its cash flows. Based on the projections and marketing strategies, the company expects the company to be successful in the coming years. BBT Company is seeking startup funding that could be used to develop the company trading activities, internal systems, the infrastructure, marketing and securing appropriate location, development of products and services, and enhance future growth. The company believes that securing the startup funds will enable it achieve the projected sales and revenues. The company also relies on the market projections to achieve the projected sales and revenues. Mission BBT is a private limited Company with its offices and stores located in DADA. The company offers official and all types of casual wears for person of all ages and all corners of Australia and the whole world. The main aim of BBT is to create a customer-oriented business since ensuring customer satisfaction is the key issue for the achievement of the business goals. The company also has within its mission to participate in corporate social responsibilities by ensuring clean environment and helping the needy in the community of its operations. Objectives For a company to be successful its management must come up with specific goals to accomplish. The goals help a company to determine whether success is being achieved (Richardson, 2004). To ensure effectiveness of the company objectives the management must ensure they compare actual results with the set objectives or target (Pinson, 2008). Therefore, to be able to track the company progress, the following objectives will provide guidance: To secure startup funds and the resultant funds through various means, including, owners’ capital and borrowing from financial and non-financial institutions. To establish sales and marketing strategies in order to increase the market share for the company products. To generate high revenues from the sales based on the projections of the market growth. To reinvest company profit from the sales in order to expand the market share of the company products Keys to Success To be successful the company must be based on focus. To effectively fit in this competitive industry the company must show intelligence and competence insights (Richardson, 2004). For this company to be successful, the management will: Work towards becoming the leader in the clothing industry Provide clothes that suit all the family members. Commitments to best practices in the business industry, by ensuring set ethical standards are followed in any business dealings. To ensure this proper training and self-assessment will be conducted. Creation and enhancement of customer relationship, by ensuring the company is aware of the opportunity and customer problems. Constant communications with the customer will be done in order to build good customer relationship and ensure the company meets its target. Creation of brands that would fit in the international market Company Summary BBT is a startup clothing company with main office location in DADA. The company is a private limited liability company. The company will be located locally, and then once the management acquires the start-up capital, the head office will be moved to the city center Company Ownership The company is a private limited liability organization. It is fully owned by the owner who is also the founder. Products The business will be offering women wear, men’s wear, children’s wear and junior’s wear. The clothe line will consist of active wear and casual wear, leather coats, jackets and headgear. The sizes of the clothes will range from that of junior to an adult wear. The business will offer various products that meet various customer needs. Descriptions of some of the products include: T-Shirts Long sleeve and short sleeve for men, ranging from small size to Extra-large size The price will range from $30 to $70 Long sleeve and short sleeve for women, ranging from small size to Extra-large size The price will range from $25 to $65 Jersey Men’s and Women short and long sleeve pullover, ranging from small size to Extra-large size. The prices will range from $50 to $65 Trousers Men’s trousers and Women’s wear, ranging from small size to Extra-large size The prices will range from $50 to $70 Jackets Men’s and Women’s jacket, ranging from small and Extra-large sizes The Price will range from $65 to $75 Sportswear The company will offer a wide range of sportswear. The company will provide sportswear for mountain climbing, active sports, trekking, and for gym. Some of the sportswear that the company will offer will include sweat suits and sweatshirts. The prices for this product will range from $75 to $110. Other products to be offered include; headgear, baseball jackets, leather garments, workout gear The current trend in wear has shown that people are moving from formal wear to official wear. Therefore, as the company will be offering official wear, more concentration will be put on the casual wear. Market Analysis and Summary Economic factors affect various clothing subsectors differently, with much impact being felt on the men’s wear subsector. The demand for men’s wear tends to be more elastic compared to the women’s wear. The strength of the clothing however is generally encouraging due to continuous rising in the demand of clothing. Moreover, clothes are necessities and people continue to buy them in order to ensure satisfaction of their basic needs. Even though the demand for clothing continue to rise yearly, manufactures who want to engage in the trade have to come up with specific and very effective marketing strategies in order to gain access and survival in the clothing market. They should also take part in trade shows and exhibitions, conduct market tests for their products and employ many resources for promotion. This is because the market comprises of high competition. Market segmentation The company will be targeting women, men, children and juniors. The target market is need of branded and fairly priced clothes. The company expects no barrier to color among the target groups since all the groups prefer cloth of any color. The company predicts the target group to range from one to sixty-five years. The opportunities available in the market include: Adult wear, Men and men between the ages of 18 to 55 years Junior wear, Girls and boys between the ages of 6 to 18 years Children clothing, toddlers and infants between the ages of 0 to 5 years Industry Analysis Clothing industry is a mature industry however slows growing. This industry comprises of high competition. This competition affects the continuous changing operations and structure. Due to high competition in this industry, the market needs adequate research and some specialization before attempting to initiate penetration (True Local: Best match for Clothing Manufacturers, 2015). Therefore, the company will be doing frequent market research in order to analyze changes in consumer taste and preferences. Generally, clothing industry in Australia is very large, fragmented and mature. Clothing supplied in Australia is produced both locally and from foreign countries (Clothing Retailing in Australia, 2015). Distribution channels Australia has a good market structure that could facilitate development of a business. There exist traditional business distribution channels through which producers and sellers could use to make their products available to the consumers. Some of the channels include, manufacturer to the consumer, manufacturer to the intermediary then to the consumers. There are also market days through which producers can avail their products to the buyers (Clothing Retailing in Australia (2015). The company will use various showrooms in order to enable buyers place any order on their products. Due to high competition in the industry, the company will also recruit sales representatives to enable it gain access to the market. Direct distribution may not be used much since it is very expensive and the company has not established well in the market. In most cases, sales representatives would be used in order to facilitate entry of the company into the market. Competition analysis Clothing industry consists of high competition. The local producers face competition from the foreign producers who import clothes to Australian market. Competitors to BBT Company include Birdsnest, Witchery, Xenia Boutique, the Gap, Babylon, Blue gum, LCN fashion, and Certton. The competition on the industry mainly concentrates on the price. More pressure mounts on the local producers especially on the prices and from the foreign producers. This of late has forced the local manufacturers and suppliers to lower the prices of their products (English, & Moate, 2010). There exist various sectors in the clothing industries with some companies combining all the sectors. Some of the sectors include discount stores, retailers, wholesalers and others. To compete in the industry and to increase its revenues, BBT Company will combine most of the sectors. Changes in the attitude of consumers towards clothing are another factor that influences competition strategies in the industry (English, & Moate, 2010). Today most consumers have contracted the amount of their disposable income they spend on clothing (English, & Moate, 2010). Consumers are also looking for high quality clothes at very low prices forcing the producers and sellers to sell their products at very low prices. Some sociologists and economists have argued that, this is due to development of new products, frequent changes in fashion, and different seasons for selling. Marketing and Sales Strategy Various individuals want to belong or feel they belong to certain group of people. Therefore, they would want to dress like that group of people they admire dress. People will therefore tend to choose certain clothes depending on what style the groups he or she belongs to wears. The clothing message will be put across to its wearers with emphasis on their group. The business is a mortar and brick since interaction with customers is vital for its success. The company’s marketing strategies will involve: Product differentiation Creation of relationship oriented business Fostering corporate social responsibility Concentrating on diversified communities as the target market To promote the products and website, the website will have a design which is more attractive, for example by professional designing, providing sufficient information on the website, having a clean design and making sure the site is easily navigated. BBT marketing strategy is to gain ground as a future company taking into consideration all the ethical standards in relation to promotion and advertising. Promotion Strategies BBT products and brands allow the company to gain entry into any market. With the existence of various marketing strategies, the company intends to use the following sources to promote its products: Advertising – BBT will advertise by use of the newsletters and magazines Direct mail – this will be directed towards ensuring the company interacts with its cusomers directly. Direct mail will ensure the advertising process is accountable, flexible, efficient, measurable and targetable. Media – BBT will use media such as television and radio to inform and convince consumer to buy its product Trade fairs and Trade shows – BBT will ensure it participates in the Chamber of Commerce trade fairs and shows to increase awareness of its products. This will also help the company to connect with customers, learn and grow. Sales strategy BBT will have sale representatives who will be responsible for selling the company products at the local, regional and national level. The sales teams will also be required to create connections with other retailers or wholesalers so they can distribute the company products for their resale. BBT Company will also create a website that will allow its consumers to click and order the products of interest. To ensure customer contact is not lost, the company will have team in place to deliver the products to the consumers to allow interaction between company representatives and the consumers. Management and Personnel The business is a company owned by an individual who will be assisted by other family members and legal experts. Other members of the company will be sales specialist, responsible for sales and marketing, manufacturing team, responsible for production of clothes. The owner and his family members will perform other functions. Other individuals to be hired by the company includes President and Vice President for strategic alliance, Vice president marketing and sales, Risk analyst and the Financial officer. Critical Risk Factors SWOT ANALYSIS SWOT analysis takes into consideration the business strengths, weaknesses, opportunities and threats (English, & Moate, 2010). These are influenced by the business model and size. Strengths The strengths of this business plan are; The business will be able to hire expertise to facilitate in manufacturing, marketing and sales of its products and services. The business will be able to have an online interaction with its customer. This helps in enhancing business-customer relations and hence enables the business to improve service delivery. Weaknesses The weaknesses of this plan may include; The business requires hiring of expertise to help in manufacturing of the trendy clothes. The cost of hiring could therefore prove to be high. The business does not have enough established assets that will be in line with this business plan. Therefore, it will require the establishment of assets and supply chains before the initial sales could take place. All these process will require high capital investment that might not be at disposal currently. Opportunities Opportunities that will arise from this business plan may include; After the establishment of the business, more opportunities will arise. This is due to; expansion of the market, improved supplies, reduced operation costs in the end and improved consumer awareness of the business existence. The business takes advantage of the current cost effective manufacturing technologies. This will ensure the business produces clothes that are affordable and can effectively compete in the market. More opportunities will also be realized as a result of the establishment of highly reliable suppliers and distributors of the business products. These in turn enhance the delivery process. Threats The threats for the performance of this business will be in relation to competition, management and security of the business website. However, the risk will be minimized by coming up with appropriate marketing strategies that will facilitate penetration and create consumer awareness of the company products. Website security threats will be minimized by use of anti-virus software in order to protect the networks and ensure the information sent and received in the system is free from viruses. Financial Plan BBT company financial plan is aimed at ensuring continuous operation of the business. The financial plan enhances business expansion, creation of new investment, enhance access to loans and transform methods of conducting business in the company (Terjeses, & Frederick, 2006). BBT company financial objectives include: To access finances from various lenders at an affordable rate of interest Reinvestment of revenue generated from the sales of the company products. Generation of high revenue based on the company’s sale projections. Break Even Analysis Breakeven Analysis Monthly Break Even Revenue $135,450 Variable cost Average Percentage 25% Monthly Estimated Fixed Cost $106,743 Cash Flow Projections Year 1 ($) Year 2 ($) Year 3 ($) Cash from the Operations Cash Sales 2,345,754 3,897,654 4,654,786 Cash from Receivables 2, 086,343 3,453,321 4,243543 Cash from other Operations Additional Cash Received 0 0 0 Sales tax, VAT 0 0 0 Borrowings 0 0 0 Other Liabilities 0 0 0 Long term liabilities 0 0 0 Sale of Current liabilities 0 0 0 New investment received 0 0 0 Total Cash Received 0 0 0 Expenditures Expenditures from Operations 0 Cash Spending 0 0 0 Payments 0 0 0 Cash Balance 4,432,097 7,350,975 8,898,329 Balance Sheet Projections Year 1 ($) Year 2 ($) Year 3 ($) Current Assets Cash 0 0 0 Account Receivables 0 0 0 Inventory 0 0 0 Other Current Assets 0 0 0 Total Current Assets 0 0 0 Long term Assets 0 0 0 Total Assets 0 0 0 Current Liabilities Accounts Payable 0 0 0 Other Current Liabilities 0 0 0 Long term Liabilities 0 0 0 Total Liabilities 0 0 0 Capital Retained Earnings Total Capital 0 0 0 0 0 0 Total Liabilities and Capital 0 0 0 Net worth 0 0 0 Conclusion The company competition is highly varied. The company will face competition from already established companies such as The Gap, Witchery and Xenia boutique. Therefore, in such a competitive environment, companies with creativity in developing family clothes will be rewarded high returns. The company is however confident that when implemented, the projected sales and revenues will be earned. Due to the company’s marketing strategies, the company will be able to reach its targeted. However to meet all these targets, the company will require an initial startup capital for reputation establishment, development of infrastructure, development of the internal system, product development and for extensive marketing. The company owner aims at raising the initial startup capital with the assistance from the family members and borrowing from the financial and non-financial. Implementation of the plan will enable the company to be successful in the coming years. References Brown, R., Gutterman, A. S., & Curry, J. E. (2011). A short course in international business plans: charting a strategy for success in global commerce. Petaluma, Calif, World Trade Press Clothing Retailing in Australia (2015): Market Research Report, Available at http://www.ibisworld.com.au/industry/default.aspx?indid=407 Doudle, C., & Baldwin, K. (2005). State of mind: the success secrets of 50 South Australian entrepreneurs. Kent Town, S. Aust, Wakefield Press. English, J. W., & Moate, B. (2010). Managing a small business in Australia: the complete handbook. Surry Hills, NSW, Accessible Publishing Systems. Pinson, L. (2008). Anatomy of a business plan: a step-by-step guide to building the business and securing your company's future. Tustin, CA, Out of Your Mind & into the Marketplace Richardson, M. (2004). Starting a business in Australia: including the easy business plan. North Strathfield, N.S.W., Solar-Oz Terjeses, S., & Frederick, H. H. (2006). Sources of funding for Australia's entrepreneurs [S.l.], Lulu.com. True Local: Best match for Clothing Manufacturers (2015), Available at http://www.truelocal.com.au/find/clothing-manufacturer/ Read More