Analysis of JH Reid Corporation and Trestle Creek Cabinets Business Strategies - Example

University Name Department Business Plans Student name & Admission number Date of Submission Introduction The business plan comprises of a narrative and several financial accounting worksheets. The description template is the body of the business plan. Carlson (2011) defines the business plan as a written draft of a business or strategy to achieve intended purpose in business. Some call it as a document that illustrate what one intend to do with his or her business in future. Business plans may help an entrepreneur perform several tasks as highlighted in the document, for example they may pass investment information to potential investors. Many individuals and firms have use business plans for many purposes, for example help to sought and attract the attention of prospective business deals with suppliers and new business as well as attract key employees. The sites with business plans have prompted the growing demand of outsourcing business templates from websites whose purposes is to avail high quality services to potential clients. The growing concern of complexities in business through modern world calls for a sound business plan which assists to comprehend the demand of strategies boost the day-to-day operations. For a lengthy discussion of this paper, J. H. Reid Corporation and Trestle Creek Cabinets business plans was obtained from businessplans.org and bplans.com respectively. The two firms are in furniture manufacturing sector (Hernan,2006). The strongest points and their justification for every plan Businesses and management that employ a stakeholder approach commit to serving broader goals, in addition to economic and financial interests, of those whom they serve, including public. There is also a rising trend of spending in the social sector and improving the company’s reputation as firms that are socially responsible (Carlson, 2011). The challenges businesses are facing are very dynamic and will call for a dynamic structure full of revenue in firms. Entrepreneurs require a good roadmap if they have to succeed in their businesses. Business plan of Trestle Creek Cabinets from bplans.com and J. H. Reid Corporation from businessplans.org seems associated with strong selling points which, makes them marketable to potential business people. The key areas of proficiency include objectives descriptions, company features, market analysis and financial analysis. The objective set up in both business plans which includes market share and profit helps in determining business goals and development plan. The plans have made sure that objectives are real and able to be gauged (Trestle Creek Cabinets, 2014) This have aided a tangible quantification of levels of sales as well as profit, either as a percentage of gross margin, sometimes illustrate the intended market share or growth rate a business intend to achieve. A descriptive development plan is vital in bringing out the planned growth of business in future and how is supposed to be executed. Establishing a successful business calls for a clear knowledge of the business purpose and the principles guiding its management (Carlson, 2011). Development plan at all levels make the company complex to manage so as to attain efficient communication and attainment of set goals. For instance, an organizational chart will enable better understanding of the business at this stage. Besides, all the strongest components of each site, both the business plan have a cover page, with table of content which highlight sections of the plan. The bplans.com and businessplans.org have tried therefore to avoid objectives that seem to be unclear hence being the best sites of accessing business plans. The second feature is in terms of analyzing the company features which incorporates the mission statement that explicitly express the higher goals of a firm, for example in provision of services to unique industries like the spread of new technologies. For example, the business plan of either J. H. Reid Corporation or Trestle Creek Cabinets seems to have brief and simple in mission statement. The summary of company features briefly describe what company plan to sells through which channels and the potential clients targeted. Moreover, the ownership of the company is clearly stated, if it’s either a partnership, sole proprietorship or corporation and the way its traded, for example if its publicly or privately traded. The location and company history is clearly highlighted in the plans (Voorsluys, W., Broberg, J. & Buyya, R. 201)The history of the company have been founded on the way the firm has progressed or intend to progress in the future, the reason behind location of offices where they are located and any relevant information concerning the sales, products and the way market is serviced and how each time is changing over time and facilities the company has acquired and how they intend to help the business grow. The third point is description of analysis, which comprises the market and financial analysis. The information set in each scene of the business plan highlights more on market forecasts, market segments and the way they stand to affect the business. The analysis has incorporated the use of standard information sources which offers a clear assessment of present market trends which affect the company’s marketing plan. The income and cash flow part that illustrates the balance sheet and breakeven point of the business, along with the financial ratios (Kobielus, 2009) Business plans from the named websites have their strongest elements which comprises of detailed executive summary that sums up the business plan. The weakest points and their justification of every plan Depending on the objectives and goals of a business plan, sometimes will determine the illustrations to be included in the plan. Despite both the business plan doing well in some almost all areas, there have been some weak points that they have availed uncertain information. This could sometimes aid businesses to face challenges if the descriptions of some elements are not clearly explained. On the side of Trestle Creek Cabinets plan, keys to success have not been brought out clearly. The plan did not identify unique or key selling points that are required to succeed in the market (Trestle Creek Cabinets, 2014) The key areas of business success like quality, price have not been clearly illustrated in the plan. Similarly, the business strategy and implementation of overall strategic thrust is not well explained. No clear business program to implement the strategy is presented in the Trestle Creek Cabinets plan hence making it hard to tell whether the strategy is based on a new technology, new product or the product features that are selling point for the company. The market strategy is not explicitly illustrated, bplans.com does not describe a marketing strategy that makes the company special. Even though, much of the business plans will depend on the nature and industry of a business, but a descriptive plan expound on the business and industry is preferred. As the plans are meant to seek for thousands of dollars either as seed capital or for development, and thus need to explain and convince the potential investors or partners (Trestle Creek Cabinets, 2014) The reason behind this criticism is that a marketing strategy is supposed to focus on a specific market segment which could serve new solutions to existing problems. Another way Trestle Creek Cabinets business plan does not explain the way a firm will better other businesses, as a sustainable business. Sustainability in businesses is meant to implement practices that support and enhance economic safety, social wellbeing and environmental protection as they work hard improved performance. To achieve this, firms in hospitality industry formulate sustainable business strategy which is enclosed in sustainability reports. The clarity of Trestle Creek Cabinets plan have been viewed as the drawback of business plans obtained from this particular sites, for they are believed to summarize the content and not giving a detailed view of how business is expected to be managed, designed and developed (Bridges, 2008). J. H. Reid Corporation plan has presented strongest points in a number of areas. One of the area that a businessplans.com plans have been weakest is in areas of technology. The technology revolution in modern business should be illustrated on operation of businesses, ideas that businessplans.com have neglected in its business plan. Seems the latter disputed the well-established truth that is championed by experts also fundamentally influenced by technology (Cumming & Huse, 2009). The scientific belief of repeatability in confirming the experimental outcomes spread with the fast and wide distribution of scientific imminent and inventions that business plans permit is not put into consideration. The fabrication of business plans via online information is speeded up noticeably. The easy with free exchange of thoughts offer an emergency to a scientific community that operates with no geographical restraints. This result to a possible spread of standardizes methodologies in business plans as well as to append classiness to the development of coherent idea .As easily accessible business plans assist enlarge the shared body of knowledge, and of building innovative associations connecting apparently unconnected ideas sometimes exhibited in businessplans.com makes it hard to understand the ideas of businesses. The business plan of J. H. Reid Corporation seems not to capture the information on strategic alliances which includes co-marketing, co-development and cooperative arrangements. Lack of expounding on strategic alliances in business plan leaves the company as a lone ranger and thus no clear link of promotion or distribution strategies to other firms in a manner that improves the firm’s position (J. H. Reid Corporation, 2014)The business decisions which the company takes have an impact on the society, where it operates its businesses. Demonstrated competencies of both business plans On management section, each business plans has identified the management team gaps by identifying skills the team does not possess and converse on how the firm plans to fill such gaps, for instance, the illustration of who will offer legal or tax advice. Both the sites have incorporated generally accepted guidelines in form and content of their business plans, stating the intended business goals and potential strategies to help attain them (J. H. Reid Corporation, 2014) the plans have further highlighted the likely problems that may face the business and suggested ways of solving them. Additional, the plans from both sites have also focused on the organizational structure of the business factoring in the responsibilities and capital structure. Nevertheless, not every part of business plan is all the same compared to the way all business are. Based on the business and what it intend to be used for, may call for a unique business plan for the site or entrepreneur. The other competency of business plans from either bplans.com or businessplans.org is sustainability response which has guided companies to achieve set goals. Firms in any industry formulate sustainable business strategy which is enclosed in business templates. For example, sustainability in businesses is meant to implement practices that support and enhance economic safety, social wellbeing and environmental protection as they work hard improved performance. Sustainability reports have assisted the company to highlight keys achievements it has made for the public or plan to make on new initiatives put forth by the organization (J. H. Reid Corporation, 2014), it is impressive how social reporting can expand the scope of issues covered when writing a company’s business plan. This system offers a broader perspective to issues that financial reporting fails to account for (Cumming & Huse, 2009). The business plans have also been effective in addressing other considerations of management especially the description of other criteria that affect the firm’s business operations. For example, in finding out whether any employee or manager has “non-compete” agreements with competitors. Moreover, the plans have featured the list of major stakeholders and illustrated their roles in management. The analysis of business plans The business plans should incorporate the set norm in the business circles. As such, business plans need to be script within a manner that society considers responsible will lose it. This is the iron law of responsibility. The social responsibility legitimizes and promotes economic objectives of business. When the social life is improved, the business can have good customers, employees and community. Even though a number of business plans may offer favorable information regarding business surroundings appropriate for successful venture capital operations. Cumming and Huse (2009) points out that some of the plans have few openings for the right investment, whereas other does not offer a good background for new opportunities. Small or medium firms, that are growing slowly and are privately oriented economies as well as the having fairly unrefined entrepreneurial background are unlikely to offer much scope for the development of investments in their business plans that offer the high returns that venture capital firms look after (Egan, 2008). Though turn around for such firms may provide some openings for business, creating a flow of attractive investments large enough to justify venture capitalists are important. The business description of all the plans needs to start with a brief illustration of the industry. When featuring the industry, the plans should have described the present outlook and the future possibilities of businesses. The Trestle Creek Cabinets plan should also have provided detailed information of the various markets in the industry, comprising any new products or developments that are likely to benefit the business or adversely affect it. In describing the industry, the observations should be based on reliable data and offer footnote such sources of information as suitable. This is vital if the plan is meant to seek funding since the investors will prefer to understand how dependable the information availed in the plan is rather than risking their hard earned money on assumptions or conjecture. In illustrating the business, the plans could have focused more on structure that is the form of operation which may either be service-oriented, wholesale, retail and manufacturing as well as stating whether it’s a new business or already in existence. Additionally, the business structure should highlight the legal form of the business, details on whether it’s a partnership, company or a sole proprietorship showing that the principals are so and so as well as their contribution to the business. After the description of the business, product description is also important, how it will be distributed to relevant channels and illustration of business support systems. The support may either be in form of advertising, promotion, after sale services and customer care service. The description statement of the product was supposed plan intentions by focusing on unique features that are typically found in the industry. The issue of risk management has not been explored in business plans. Kaplan and Stromberg (2004) affirm that the integral elements that cause risk are price and interest. Risk is as well caused by internal and external factors that surround a business. In any industry or market, there is strong connection between risk and return, as the investors saying goes, “the higher the risk, the higher and the return”. Risk management is an economic term referring to a process employed by entrepreneur or investors to identify and analyze the financial risks there investment may be associated with, and then develop mechanisms to manage and minimize such risks while they maximize the returns. If the risks on the share market can be described using another term, then it is “volatility”. Majority of the well-known investors in the share market, have used risk management mechanisms to minimize the risk in their investment so as to maximize on their returns. However, in this particular business plans, issues of risk management were not highlighted clearly. Additionally, the business plans should have shown the way of offering a competitive edge. For example, the business plan of Trestle Creek Cabinets plan will be better since if supplied a full line of products, as Competitor I does not avail full line. Provision of after sale service is advantageous as Competitor II does not any after sale service to clients. Also when working on a business plan for financial purposes, one is expected to illustrate the importance of added equity or debt and how business stand to gain from it (Cumming & Huse, 2009). Equity in business encompasses three stages of investing-seed, start-up and expansion, which excludes buyouts. Seed capital is commonly used to finance initial product research and development, whereas start up investments are availed to firms that have excelled the idea stage and are moving into production, marketing and sale stage as indicated in their business plans. Together seed and startup stages are known as early stage investments. After this primary stage, the firm graduates to expansion stage where the firm requires additional capital to finance its growing manufacturing, distribution and research and development capacity (Conner, 2011). Buyouts are usually applied to more mature firms. In private equity investments, there are different kinds of buyouts such as leveraged buyouts and management buyouts and should be clearly illustrated in the business plans. The former is used as to acquire a firm and minimize its equity base, where as the latter is a leveraged buyout where existing management takes control of the firm. As such, a business seeking for potential investors should come up with sound business plan with updated projections of revenues and profits and well-thought out market strategy Recommendations Business these days are facing a number of challenges, something that has forced them to stipulate plans of moving forward. As such, firms need to operate within a manner that society considers responsible will lose it. This is the iron law of responsibility. The social responsibility legitimizes and promotes economic objectives of business. When the social life is improved, the business can have good customers, employees and community. The changing climate in business world, social stratification and political arenas in society are already initiating sea of changes in the quality of service companies offers to their customers. The challenges that affect businesses are almost similar no matter the size of business. The major challenges that business plans are facing are: a) Financial analysis A business plan should always discuss company’s most significant financial attributes, like the projected cash flow and the planned net profit in the coming years, the intended return on investment and explain any fluctuations that are likely to happen from seasonal sales. Unluckily, it’s not possible to create certainty in the economy, but its imperative business plans incorporate a strategic long-term development plan (Cumming & Huse, 2009). The plans will help business owners perceive the future and help them create business value despite how rocky the economy landscape may appear, as such enable the business overcome the challenges. b) Market In reference to Heinemann (2011), in the dynamic market, business plans need to be dynamic hence should change as business changes. Instead of preparing a marketing plan, an entrepreneur should re-examine the plan from time to time in light of new developments at the market and make any necessary changes. The marketing plan should guide and support effort any continual basis. New businesses especially in this rocky economy as people are looking to spend their money in safer grounds, meaning that the appealing market of new custom has shrunk. The market is full of infightings of businesses to seize new custom, so it’s upon the business to ensure that business image is the best in the market. c) Management and incentives While the start-up companies design their compensation systems, they have some objectives. First, they try to acquire qualified personnel and retain present employees. Next, the company aim to ensure internal and external equity of wages that employees earn (Carlson, 2011) The third objective is to reward desired behaviors of employees like good performance and loyalty. The other objective of a rational compensation program should be aimed at controlling costs of obtaining and retaining the company’s workforce. Finally, compensation management programs should consider legal constraints and provide compliance with all government regulations related with employee compensation. In compensation management, business plans should it determine appropriate pay level for each job (Heinemann, 2011)This is acquired through several phases. The first phase is to collect information about jobs by conducting job analysis in order to determine job and position descriptions and job standards. The second phase is the evaluation of jobs in order to obtain internal equity in terms of pay within the organization. Challenges and lessons learned Competition: Most businesses are being established to compete with existing ones. These imply that business plans must not get complacent may be because marketing strategy or advertising tactics worked for it in the past. The marketing is changing and each business to be competitive. Taking a step back and reviewing both the set up and plan as well as keeping a glance to competition is helpful in taking control and building business image that is key in the market. Management: the management should position their tactics of managing change strategically so as to manage task regardless of whether that decline is part of a cyclical industry pattern or business plan, permanent erosion, or even a collapse of the market niche (Hernan, C.G. 2006) Decline usually forces managers to struggle with a pair of competing tasks: reducing the size of the business and managing the remaining portion of the business effectively. Invest in professional development: entrepreneur should spend time on own personal development. This helps in acquiring relevant knowledge and skills that come in handy during the day-to-day operation of the business. Solid business plan: every business owners will narrate the significance of a solid business plan. Whether one creates his or her own business plan or obtains it from leading sites, it serves as a first set up of establishing a business. The plan serves big picture goals detailed enough to give instructions on how to attain these goals (Cumming & Huse, 2009). Business mentorship: To succeed in a business venture, an entrepreneur needs a mentor to nurture him or her in business endeavors. The mentor may help to council the entrepreneur while facing adversity. When tremendous challenges hit the business, entrepreneur needs to have an arsenal of individuals to lean on to tramp in the course of those tough times.” Business goals are accomplished through various activities or tasks which are performed by groups or individuals. Conclusion Entrepreneurs bump into increasing competitive pressure fueled by globalization, legislation and relaxed trade barriers, along with increase in market expansion as a result to emerging technologies and innovation and the information about all this is obtained online and via international media. As such, business plans are very vital tools that enable entrepreneurs to realize their business goals through a well structured template of where the business is headed and the financial worksheets that motivates the entrepreneur. References Carlson, D.S. 2011. Business Plan Writing. Journal of Business Ethics, 100(3), 497–514. Cumming, T. G., & Huse, E. F. 2009. Organizational development and change (4th ed.) St. Paul, MN: West Publishing. Heinemann, G. 2011. Writing Business Plans. San Diego: University Associates Hernan, C.G. 2006. Evaluation of business plan in Colombia. In the proceedings of a workshop Held in Singapore, 7-9 July 1986 Kobielus, J. 2009. Business Planning. Southborough: Mar 2, 2009. Vol. 26, No. 9, pg. 24-27 Voorsluys, W., Broberg, J. & Buyya, R. 2011. Start-up: Introduction to Business. New York, USA: Wiley Press. pp. 1–44 Trestle Creek Cabinets- retrieved on 16th August 2014from http://www.bplans.com/furniture_manufacturer_business_plan/executive_summary_fc.ppJ. H. Reid Corporation retrieved on 16th August 2014 from http://www.businessplans.org Read More