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Business Plan

Fundamentally, the start of this small business would call for an adequacy into a well-modeled business plan.  Due to limitation into the resource factors (capital) accompanied by the diversity into its requirements, this business would be adequately performed well with a guide of a business plan. Ideally, business plan implies a statement drawn in a formal manner that indicates the various goals of the business, on authentic attribute of their possibility for achievement above the corresponding drafted plan which is drawn for a achieving them.

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My small business will however be not an exceptional to a well drafted plan which helps for a successful performance.  In the plan, the package of 10,000 pounds from my personal savings and 10000 pounds eligible through a bank loan will pivot the structure of the budget.

Various assumptions will however be employed into the activities and financial estimates.  A comprehensive outlay of the financial statement of the business will form the benchmark of the plan activities.

Executive summary

This is the business plan for the sale of soft drinks.  The venture will be placed at my nearest states city.  The business idea comes into mind after an evaluation of the market conditions of the product together with the enabling environment conditions for a good support into the business.  Either, it’s a basis of long time-craved desire for starting a business.  The hot environmental condition within this city provides a good support for adequate market.

However, the high state of competition would be perhaps the biggest crisis in the involvement into the same business.  The nature of the entity will be in a retail capacity with packages of various brands of soft drinks.  Customers will be provided with two consumption alternatives; consuming the product within the entity or a take –away consumption service.  Some brands will however call for a higher purchase cost at the take away system.

There is considerably a great expectation about the finances, which could include; sales turn over, cash flow, the profit and investment returns. However with the good plan layout, their nature is assumed to be highly positive and providing a support for a good performance.

The capital need for the business is estimated to been 20,000 pounds.  From the same, 10,000 pounds a deemed to be provided from my personal savings with the remaining amount got as bank loan.

Since the business is a new venture, much about its current position and achievements would be left for future bases.  Elsewhere, due to the diversity in the structure of business plans my plan will only be limited to the financial budgets.

Business description

The nature of the business will take the form of a retail venture / business comprised of stocking and sales of soft drinks.  The products (soft drinks) will comprise of various sets of brands collected from various bottling / distilling companies.  Product would also be in terms of various sizes (in terms) of volume of bottles.

Either, the business will take off as a small business due to my personal decision of operating as a retail outlet under the nature of sole proprietorship.  The small business will however be a new business launch and before the same disintegrates to expanded frontiers of being a nation wide distributor and perhaps enter the foreign market.  The business will be in form of a new startup.  With the structural nature of the business, it will be operated as sole proprietorship.  The mode of sales will be to the final consumers (in small quantities from the business point at the city).

The nature of the business will perhaps provide the deepest ingrient to providing a high competition into the market full of competition.  Due to one commodity stocking by most of the competitors, the business will invite for solid base for a high level of competition within the market because of the good environment of having a variety of products.  To ensure a high state of competition at the market place and hence a higher level of profit, various strategies that ensure a high level of profit and competition will be formulated.

Market strategies

With the complexity in regard to the market competition, a complete package of market strategies will be employed to provide a good competitive scenario.  However, the market of operation is comprised of a highly perfect competitive competition.  There are many entities within the city with the same business characters.  The pricing system is highly competitive with different pricing techniques been used for a higher customer attraction.  Generally, there is a good turnover for the other entities of the same nature.

The nature of my business will capture various market differentials that make it compete adequately within the market.  This size of the market is big with both small and big consumers and suppliers.  Over the years, the same has experienced a growing trend with high business turnovers and prospects.  Due to the hot climatic condition and general leisure activities within the city, the business has been voted to considerably been growing.  The same information have been gotten form a scanning into the market statistics of the other competitors.

At the market, various fundamental attributes will perhaps position my entity at a higher competitive edge.  Firstly, my business will incorporate a broad set of brands from different manufacturers.  Only few of such business are available at the city.  Majority of the vendors provide only one or few of the brands.  Provision of a broad package of brands gives my entity a better place to compete adequately within such a market.

Either, the system of sale will be to the final consumers where interpersonal relations will be used to provide the biggest package of conditions for high sales turnovers.

Competitive Analysis

The market of entrance is however not easily permissible.  It is packed with diversity in the business of my venture both of big, medium and small businesses.  However, the formality of my strategies will provide a package of high competition. With the perfectly competitive market, the market forces of the demand and the supply are vulnerable to determining the equilibrium prices.  At one point therefore, the aspect of demand by the consumers and the level of supply (by the business units) interacts considerable to provide an equilibrium level of price.

However, pricing is a subject of the cost factor and the nature of the entity’s goals and objectives of the profit.  Competition within the market is an aspect that has led to diversity into the activities allied to the marketing and competition.  The cost component of the products implies asset of various fixed and variable costs outlay.  Consequently, vulnerability of entities within the environment has also been commensurate within the level of assets which the different investors have. They yield various economies of scale factors in the costing aspects.  Either, the subject of costing is enabled by methods of ensuring optimal costing.

Through optimal costing, the business entities ensure the least cost variable with the biggest level of benefits.  Consequently, the organizations are able to adequately compete well with such a good state of costing factor.  For success into the market place, I will however employ various strategies.  This will include, advertising, adequate pricing, fountain distributional techniques and engaging in promotions.  Such factors have been arrived at through functional methods used to weigh out the relative economies behind the different methods of employing competitive strategies.  These strategies are aimed at providing a strong sense of competition and provide a package of high sales turnover. (Ulijn, Duill, Robertson, 2004, p. 69)

Development of the plan

Certain variables and parameters will ideally be used to develop the plan.  However, the same development schedule is focused to be in some three planes.  These would be on organizational, products and market developments.  At the market level, structures will be used to provide good scenery about the market place.  The basic of these structures will be related to the aspect of the market place competition level above that of formulating strategies for adequate competition within the market.  From the product development level, it will involve the fundamental basics that help to provide structures for a broader and user friendly product brands within the market.  This will never be compromised as the organization continues to seek for diversity in its product lines.

Alternatively, organizational development will never be overlooked.  This is in the realization of the role played by the organizational structure and management / governance in the pursuit of achieving the goals and objectives of an entity.

Adequacy in the organizational outlay remains a benchmark into the activities of the business.

Management plan

The management will relate to the roles played by the different persons within the entity.  Adequacy of management plan will seek to reduce any cases of conflict within the organization.

The financial components

The business plan is depicted to have a good package of financial update.  This tries to illustrate various financial  components as stated within the plan budget.  The nature of the financial budgets will help to formulate various decisions about the business outlay.  They will help to weight the different opportunities and abilities to pursue well at the market place.  These will include;

Fixed assets budget.

This is a plan of expenditure on the fixed assets of the business.  Fixed assets also relate to the worth of the assets whose accounting influence is generally perceived over a long period of time.  Fixed assets are the structures through which the operations of the business activity are provided for.  They will include, cooling equipment, lease on building, and purchases of packaging facility above others.  The loss to the fixed assets will be calculated through a tear and wear process of depreciations.  The aspect of depreciation will be in recognition of the annual loss in the value of the fixed assets.

To calculate this, an adequate level of rate of depreciation will be used to calculate / estimate the value of the depreciation. For my business, a budget of the fixed assets is an important tool. The assets will relate to the value and worth of the business. Fixed assets will show the existing worth of the business at a particular time. However, for the sake of my business, the budget for the fixed assets will only be limited to one year.

Sales budget

The sale budget will be an outlay of the sales in terms of the quantity and the unit price of the product.  However, for feasibility in my business plan, a lump sum of the total sales values will be evaluated (sales revenue as a whole).  The estimates of the sales revenue have been important in formulating various decisions about the profit and loss level in the business activity.

Production budget

This will relate to the cost of the production activity which will include the cost of all activities that could be performed within the market place to bring the product to the right place (business point) for further sale to the consumers.  It will be a concise budget cost for both fixed and variable cost in the business activity system.

Purchases budget

This will be an estimated illustration of the product purchase for use in selling.  It will include the cost of product purchases as stock (inventory) for further selling to the available customers.

Cash budget

Cash budget will illustrate the estimated amount of the capital (in cash form), which the business is estimated to have at the commencement period.  However, this will include a composite value of both the personal saving and the bank loan used to finance the activities of the business.

Budget profit and loss account

This will be an illustration of the relationship of the sales value and the purchases.  It will be an estimation of the possible profit or loss that may accrue in the business process.

Budget balance sheet

It will draw a relationship between the budgeted liabilities and assets at the operating period of the business.  However, it will be a one year estimate.

Break-even point

This will state the amount of sales revenue that will be required to make the business recoup its operating costs within the first one year.  It will be the volume of sales that makes the level of cost (expenses) and revenue to be equal.

Margin of safety

This will be the amount of activity which the business should operate in to be able to achieve a certain level of budgeted level.  However, this will be calculated in terms of sales revenue and as a percentage of the total budget sales.

(Note:  Personal assumptions will be made in building up the financial components).

Bibliography

Ulijn, J., Duill, M., $ Robertson, S. (2004) Teaching Business Plan Negotiation: Fostering Entrepreneurship among Business and Engineering Students. Business Communication Quarterly, Vol. 67

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