Business plan

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    3
  • Words:
    2117

BUSINESS PLAN 9

Business plan

Corse code:

Contents

Executive summary 2

Mission 2

Objectives 3

Company summary 3

Company ownership 3

Start up summary 3

Products and Services 4

Market Analysis Summary 4

Shop location 4

Risk assessment 5

Procurement and management of firm resources 5

Staffing 5

Recruitment and Promotion of Personnel 7

Recruitment 7

Training 8

Promotion 8

Remuneration and Incentive 8

Market segmentation 8

License and Permits 9

Support Service 9

Banking services 9

The Legal services 10

Insurance services 10

Financial plan 11

Assumptions 11

Break-even analysis 12

Projected Profit and Loss 12

Projected Cash Flow 13

Projected cash flow for second and third year 14

Projected Balance Sheet 15

Reference list 17

Appendix 18

Executive summary

Pizsho, name of the shop, is the latest player in the food industry. The shop is located in a very comfortable, populous town with very strong desire for extra dining options. Having been motivated by the anxious and needy families for quality food services, the shop is strategically located in the town to take the privileges of the hungry population, especially the families.

This business plan therefore calls for an interesting, profitable establishment with a future anticipation of growing to serve the needy society. Above all, this business plan gives a clear description of a healthy food industry with well established prospects, looking forward to gaining an international popularity.

Mission

Pizsho has a mission of creating a pleasant and responsive environment for the esteem customers in a productive and well designed atmosphere that facilitates a good work place for all people.

Vision

To be the leading food industry that creates and nurture creative, healthy and respectable environment that people can sit, relax and enjoy the best foods in the region. In striving to achieve this, it ensures that the workers are fully compensated and motivated to respect the customers and produce quality pizzas.

Objectives

The objectives of Pizsho are:

  1. To maximize profits at any given time.

  2. To create a stable market place able to sustain sales and marketing goals Competitive advantage

This will give Pizsho an upper hand over its competitors and generate a better value to the shareholders and the firm. Essentially, the more the competitive advantage, the more complex it is for the market rivals to neutralize that advantage.

The shop will have vast sources of competitive advantage. These include:

  1. Strong research and growth capabilities

  2. Distribution or restricted re-selling rights

  3. Having superior products and services

Company summary

Pizsho is a private shop dealing with the sale of pizza. It offers special menu that does not currently exist in the region. The target groups are the students and young families in the area.

Company ownership

The stakeholders of the shop will be Mr. and Mrs. Jean Paul and are the owners of the business. The shop will be registered as Limited liability Company.

Start up summary

The start-up cost will include of renovation of the site, professional fees and other start-up expenses. The owners will directly meet these costs. However, they will supplement by loans from banks, private investors and from friends. The assumptions are as shown in the figure below.

Products and Services

Pizsho provides the best quality pizza to the local community and town dwellers which at the moment, has limited access to the food shops and restaurants. At the commencement, the shop will provide supper daily from Monday to Saturday. It opens at 5.00 am in the morning and close late at night at 10 pm. Sunday will be closed to allow the workers to relax and worship. However, the shop will be very flexible to accommodate all the customers, even those who come early or arrive late.

Market Analysis Summary

The main target market is the local people who have great desire for family oriented and comfortable atmosphere for dine-in pizzeria. Nevertheless, the secondary target market is pizza delivery to other industries.

Shop location

The shop is located strategically next to central business district with easy access to many people. The shop is very spacious with modern a lot of room for parking and recreation. This will facilitate ease of flow of operations.

Risk assessment

Pizsho is prepared to take risk and venture into the market. At its initial stage, the business will employ very competent workers, experienced in catering and hospitality.

  1. Deciding who/what may be a victim and how

  2. Risk evaluation and deciding on precautions

  3. Recording the outcome and implementing them

  4. Reviewing the assessment and updating where need be.

Procurement and management of firm resources

Pizsho has put in place managers that control the flow of resources. The procurement manager, for instance, ensures the purchase of firm’s requirements. He is entitled to all the purchases and is answerable to the general manager. The manager ensures proper utilization of resources without any wastage.

Staffing

Qualifications

  1. Holder of bachelor degree in human resource management/ business administration

  2. Computer literate

  3. Good communication skills

Duties and responsibilities

  1. Managing all the affairs of the business

  2. Assign other staff duties

Human resource manager

Qualifications

Hold bachelor degree in human resource management

Computer literate

Qualifications

Hold bachelor in purchasing and supply

Computer literate

Procure all the business materials, equipment and goods

Keep procurement records

Qualifications

  1. Hold at least diploma in food and catering

  2. Have a certificate of public health

  3. Have experience in hospitality industry

  1. Prepare food

  2. Serving of customers

Security officers

Qualifications

  1. Have a certificate of good conduct

  2. Hold at least a certificate in criminology/public administration/security services from a recognize institution

  1. Provide security to the business premises

Recruitment and Promotion of Personnel

Recruitment

This refers to the efforts made by the enterprise in attracting and finally engaging the workforce in the specific assignment. In the conceptual stage, the business will consider applicants as a source of recruitment. These will comprise of people who will personally come to work for the reliable job opportunities and others who will approach the proprietor through letters or cell phone

Reasons for recruitment will be

  • To find and employ best qualified persons for every job

  • To retain the most promising of those hired

  • To offer promising opportunities for lifetime working learners

  • To improve the program and facilitates for personnel growth on the job

The initial recruitment will be considered and it will include permanent workers, present casual or retired employees.

These sources will be preferred because of the following reasons

  1. Morale of the employees can be improve

  2. Cost of selection can be minimized

Training

The owner of the proposed business has the obligation of training the staff for effective execution of services and meeting the business goals.

The initial recruitment will be considered and it will include permanent workers, present casual or retired employees.

These sources will be preferred because of the following reasons

  1. Morale of the employees can be improve

  2. Cost of selection can be minimized

Promotion

Workers will receive promotions basing on:

  1. Academic qualifications

  2. Professional excellence

  3. Loyalty and honesty

Remuneration and Incentive

This is payment of services rendered. This will come in the form of salaries and wages and associated allowance such as house, medical. The owner of the proposed business intends to adopt a competitive pay system so as to avoid a situation where its staff will be poached by existing and upcoming competitors. Employees will be rewarded or remunerated depending on individual performance.

Market segmentation

The city dwellers and the neighboring communities are among the market segmentation. However, only the outskirts residents are among the delivery, since the delivery diameter is seven kilometers from the central business district of the town. Approximately 60% of the target population lives within the radius of 3 km.

Pizsho’s strategy is entirely based on providing the best customer value proposition within the niche market. Currently, there are a thousand and one families with continuous demand of dining facilities. The shop therefore strives to provide the town and its outskirts the best choice of food options.

The services are mostly offered by the vendors which deal with email newsletter software, giving the business organization an opportunity if integrating advertising messages in the transaction mails. Other software companies have specialized in offering state of the art marketing services for transactional emails. Such services include facilitating personalized and targeted transaction messages in addition to the customer referral marketing campaign (Raulas & Merisavo, 2003).

The services provided via stores and internet to enhance development. This is basically as a result of effective information sharing, interactivity and instant feedback on product and services via social media platforms like facebook and twitter.

License and Permits

The owner of the business will seek license from various local authorities for smooth business operation.

The following legal requirements will be required at the start of the business

DESCRIPTION COST (£)

  1. Certificate by ministry Health 100

  2. Ministry of local government 180

  3. Trade license 720

TOTAL 1000

Support Service

The proprietor will require other support services such as banking services, legal services, and audit and insurance services

Banking services

The proprietor intends to open an account with the Family Bank

The Legal services

The proprietor intends to appoint a lawyer who will be expected to give legal advice. His contacts will be Experts & CO. Advocates Ltd.

Insurance services

British Insurance Company will be preferred as an insurance company to insure the premises against theft, fire and nevertheless, the workers will be insures under medical insurance for the sake of their health.

Sales Forecast (£)

Breadsticks

Total Sales

Direct Cost of Sales

Breadsticks

Subtotal Direct Cost of Sales

Financial plan

The picture of financial projections is quite interesting. At initial stage, the business will invest most on own asset and reluctant to take loans. Nevertheless, the business will apply for loans from various financial institutions.

Assumptions

  1. The financial plan will entirely depend on some assumptions, a few of which are listed below.

  2. There will be a fairly high growth of pizza economy in town, provided that there is no competition in the region.

  3. There is insignificant effect on technology changes which may render the business and its products and services obsolete.

  4. The available equity capital will sustain and finance all the business activities comfortably as shown in the table:

General Assumptions

Plan Month

Current Interest Rate

Long-term Interest Rate

Break-even analysis

The beak-even analysis is majorly based on the ‘burn-rate’ costs incurred in maintaining the business and running costs. The most essential insight is the fact that sales are stable enough to run above the break-even point.

Projected Profit and Loss

The business expects a commendable profit during the first year of its inception, with huge gains at the subsequent years.

Projected Cash Flow

The table below shows projected cash flow for the first year

Sales Forecast

Breadsticks

Total Sales

Direct Cost of Sales

Breadsticks

Subtotal Direct Cost of Sales

Projected cash flow for second and third year

Cash Received

Cash from Operations

Cash Sales

Subtotal Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received

0

0

New Current Borrowing

0

0

New Other Liabilities (interest-free)

0

0

New Long-term Liabilities

0

0

Sales of Other Current Assets

0

0

Sales of Long-term Assets

0

0

New Investment Received

0

0

Subtotal Cash Received

Expenditures

Expenditures from Operations

Cash Spending

Bill Payments

Subtotal Spent on Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

0

0

Principal Repayment of Current Borrowing

0

0

Other Liabilities Principal Repayment

0

0

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

0

0

Purchase Long-term Assets

0

0

Dividends

0

0

Subtotal Cash Spent

Net Cash Flow

Cash Balance

Projected Balance Sheet

Pro Forma Balance Sheet

Current Assets

Inventory

Other Current Assets

Total Current Assets

Long-term Assets

Long-term Assets

Accumulated Depreciation

Total Long-term Assets

Total Assets

Liabilities and Capital

Current Liabilities

Accounts Payable

Current Borrowing

0

0

0

Other Current Liabilities

0

0

0

Subtotal Current Liabilities

Long-term Liabilities

0

Total Liabilities

Paid-in Capital

Retained Earnings

Earnings

Total Capital

Total Liabilities and Capital

Net Worth

Reference list

Finch, B., 2013. How to Write a Business Plan. Sydney: Cambridge University.

Fiore, F., 2007. Business Plan. Write a Business Plan in No Time, 1, pp.231-49.

McKeever, M., 2012. How to Write a Business Plan. New York: Sage.

Pinson, L., 2008. How to Prepare a Business Plan. Chicago: Cambridge.

Rhonda, A., 2003. The Successful Business Plan. NY: Cengage.

Rogoff, E.G., 2010. Bankable Business Plans. Expert Solutions to Everyday Life, pp.34-67.

Stutely, R., 2012. The Definitive Business Plan. London: Macmillan.

Appendix

Pro Forma Profit and Loss

Direct Cost of Sales

Other Costs of Goods

0

0

0

Total Cost of Sales

Gross Margin

Gross Margin %

Expenses

Sales and Marketing and Other Expenses

Depreciation

Utilities

Insurance

Payroll Taxes

Maintenance

0

0

0

Total Operating Expenses

Profit Before Interest and Taxes

Interest Expense

Taxes Incurred

Net Profit

Net Profit/Sales