Category: Business Planning

Executive Summary

PMU Salon and Spa will be aimed at providing the female students within the university a wide range of salon and spa services. The firms spa will be devoted towards providing the customers with holistic services with regard to body work, massage, and energy work. These services will be offered in a relaxing setting. With regard to the salon, the firm will offer a wide range of treatments such as hair and nail treatments.

Its location within the university will provide convenience to the female students in an effort to improve their physical appearance and well being. The firm will offer a wide range of salon and spa products so as to satisfy the customers. This is inline with its customer focus strategy. In addition, the firm will ensure that it offers personalized services to the customers in order to ensure that the customers receive a unique customer experience.

This arises from realization of the fact that attainment of customer satisfaction plays a vital role in enhancing repeat purchase behavior amongst the consumers. Additionally, the firm will create an atmosphere that is conducive for promoting unique customer experience. This will be achieved by inclining all its strategies towards the customer which means that the firm is customer oriented.

To achieve its customer focus objective, the enterprise will effectively formulate its marketing strategies. One of the main marketing strategies that the firm will be concerned with is pricing. The pricing strategy will be formulated in such a way that it addresses the customers price sensitivity considering that most of them are students and they do not have a source of income. The firm will also maintain a fair and friendly environment. The firm will ensure that its employees are highly qualified so as to offer quality services.

Company Description

PMU Salon and Spa will operate as a private limited company within Prince Mohammed bin Fahad University. The Salon and Spa will be strategically located within the Universitys sports center. In order to attract a large number of customers, the management team will ensure that it has qualified personnel.

This will contribute towards provision of expert services. Considering that different individuals have different tastes and preferences, the firm will ensure that it offers diverse salon and spa services. All the firms operations will be customer centric which means that the firm will primarily focus at the customer. To achieve this, the entrepreneurs will conduct a comprehensive research in the University to determine the most preferred products and services.

According to Green (2001, p.7), every firm should have a mission statement which illustrates its purpose of existence. The firms mission will be to offer services with the objective of enhancing their customers physical beauty and mental relaxation. The firm will be committed at ensuring that its clientele is satisfied.

This is inline with the firms value proposition which will be guided by the need to offer unique relaxation and a sense of fulfillment. The resultant effect is that the firm will be able to motivate the customers to develop a sense of physical, mental and emotional balance.

Some of the core aspects which will guide the firm include improving the customers beauty, appearance, health and well being. In order to establish a strong customer relationship, the firm will offer personalized services. This will play a vital role in creating a strong bond with the customers.

It is the objective of the management team that effective provision of services will contribute towards the firm attaining a substantial clientele base. Additionally, the salon and spa will be well designed so as to appeal to the customers. By the end of the first financial year, the firm intends to be established as a beauty and well being destination within the University.

Industry analysis

On a global scale, the salon and spa industries have witnessed a rampant growth over the past few decades. This arises from the large number of firms in the industry. The industry is composed of a wide range of enterprises ranging from small, medium to large enterprises.

As a result, the global salon and spa industry is concentrated. The concentration in the industry has arisen from the high rate at which investors are venturing into the industry. For example, in the Middle East countries such as Saudi Arabia, the high rate of concentration arises from the fact that salons and spas are also being incorporated by firms in the hospitality industry such as hotels within their business structures.

Despite the high level of industry concentration, the industry is very lucrative. This is evidenced by the high rate at which the industry is growing. Salons and Spas in Saudi Arabia have become very innovative in their operation. Currently, the Saudi salon and spa industry is worth a number of billions of Riyals.

This growth was experienced since the beginning of the millennium. The Saudi Arabian salon and spa industry is undergoing a double digit growth rate every year. The high growth rate is associated with the high rate of economic growth experienced in Saudi Arabia. Currently Saudi Arabia ranks as the largest economy within Middle East.

Despite the 2008-2009 economic crises, the industrys performance was not adversely affected in most countries as indicated by the salon/spa performance index. The index has a steady-state level of 100 points. If the performance index is above 100, it indicates that the industry is expanding.

On the other hand, if the index is below 100, it is an indicator that the industry is contracting. In 2010, the industry witnessed a significant expansion as a result of increased in customer traffic. During the 4^th quarter of 2010, the salon/spa performance index increased with a margin of 0.5% to reach its all time high of 103. Salon/spa owners expect that the industry will experience a significant growth in the future as a result of increment in retail sales (Professional Beauty Association, 2010, p.1).

Market analysis

Prior to venturing the market the entrepreneur has appreciated the importance of undertaking a market research in the success of the firm. The research will be focused at a number of market variables which include the consumer, market size, market trends and competition.

The consumer market research will be aimed at understanding the consumers needs so as to determine the market potential. The firms core target customers are the individual consumers. Identifying the customers will make it possible for the firm to offer products and services which meet their requirements. The research will also enable the management team understand the consumers decision making process. As a result, it will be possible to formulate marketing strategies that influence their buying process.

Findings of a market research conducted in Saudi Arabia revealed a change amongst Saudi Arabian consumer behavior with regard to beauty, personal health and wellness. Over the past years, Saudi Arabias culture has been very strict with regard to dress code especially amongst women.

However, this is changing in the 21^st century whereby individuals are increasingly developing a desire to look and feel being at their best despite the restrictions. A large number of consumers especially women are spending a significant amount of their money on improving their appearance.

This has played a vital role in the transformation of the salon industry in Saudi Arabia. The industry is providing the ladies an opportunity to transform their appearance in a number of ways such as through modern styles and hair color. The desire to change appearance amongst women in Saudi Arabia is seasonal. Changing appearance is usually a mark of a life changing event for example when one is entering college.

In addition, the rate at which women are entering into the job market is relatively high. Young women are advancing their education to 2^nd and 3^rd level. Most of the salons and spas in Saudi Arabia especially those located in Riyadh and Jeddah are reporting that most of their clients are university students and graduates.

The high rate at which young women are entering universities located in different provinces indicate that there is a high market potential. Additionally, women are also being employed which means that their disposable income will increase in the future.

Another trend which is evident in the market arises from increased utilization of the internet. Most individuals especially college and university students are searching for information regarding beauty from the internet and other media. This has made them to be sophisticated with regard to beauty in their consumption patterns. They are increasingly demanding more salon and spa services other than the local fashions.

This has significantly strengthened the markets for salon specialists such as that of hair stylists. This has been raised to a different level as a result of change in attitude towards beauty and health.

A study by International Spa Association conducted in 2010 on the global salon and spa market revealed that spa and salon owners experienced a 46% increment in the volume of short term treatments. The most common form of short term treatment sought included manicure touchups. Currently, salons and spas are not a preserve of the super-rich. Even individuals with lower income have become conscious towards self-care. However, they are currently seeking less expensive services which fit their budgets.

One of the sectors which have gained prominence over the past few years is the medical spa salons. These enterprises offer both spa and salon services. Baby boomers and the young women have increased their demand for these services.

Product Design and Development

In an effort to deliver unique customer experience, the firm will help the customers be relieved of their stress. The company shall stress on originality, quality and constancy of service. The firm will differentiate its products and services offering from those of its competitors located within the University by ensuring that it employs qualified personnel. Additionally, the firm will also train its employees on how to relate with its customers. The resultant effect is that the firm will be able to offer quality services.

The salon and spa will be designed in such a way that it can accommodate 14 workers at full capacity. This will enhance the firms opportunity to serve its customers efficiently. The firm will diversify its product and services offering by integrating different spa and salon products which will be aimed at meeting the customers beauty and appearance needs.

Marketing plan

Marketing has undergone a significant transformation over the past decades. However, one of the most critical factors which firms should consider in their marketing practices is marketing value (DAngelo, 2010, p.216). To be effective, firms should identify the consumers needs and wants. Upon identifying the customers needs, a comprehensive plan should be devised so as to determine the most effective ways of opportunities presented in the market.

Market targeting

As the entrepreneur, it will be ensured that the consumers needs and wants are satisfied. To achieve this, the firm will integrate the concept of market targeting. The firms core target market will include the female students aged between 19 to 26 years within Prince Mohammed bin Fahad University.

The University has a substantial number of female students whose age range between 19 to 26 years. In addition, these students are more concerned with their beauty and physical appearance. Considering the fact that the university is composed of female students from different background, the firm will ensure that the needs of the specific customer category are met.

Marketing mix

In an effort to effectively penetrate the market, the firm will incorporate the concept of marketing mix. This will ensure effective formulation of marketing strategies to be used in the marketing plan. The four components of the marketing mix which include price, promotion, distribution and product will be taken into account. This arises from the fact that they affect the effectiveness with which a firm penetrates the market.

Products

To be successful a firm should offer products or services which effectively meet the prevailing market demand. In an effort to increase its customer base, the firm will offer a wide range of unique spa and salon services. This will be achieved by ensuring that the firm has all the necessary equipments for the operation of a spa and salon. This will increase the probability of a large number of customers being attracted to the firm.

The equipments to be fitted include barber chairs, bowls, shampoo bowls, dryers, dryer chairs, hair processors, hair steamers, heat lamps, facial beds, facial bed machines, facial accessories, light therapy, waxing and paraffin, stone massage, manicure tables, mats, massage beds and tables, pedicure spas and tubs, salon irons, blow dryers, salon stools, shampoo chair, backwashes, spa/Vichy/hydrotherapy, styling hydraulics, styling stations and tanning booths.

Some of the equipments range from basic managerial equipments like computers, office supplies, phones, cash registers, and appropriate furniture. The products which the firm will offer are listed in the table below.

Pricing strategy

The entrepreneur appreciates the fact that determining the price of a product or service is a vital component that will ensure that its products and services are priced moderately in an effort to meet the needs of the consumers (Greene, 2011, p.45). The firms core target customers include the female students. Most of these students do not have a source of income. However, they depend on their guardians for their necessities.

In order to be effective in its pricing strategy, the firm will utilize penetration pricing strategy. Baker (2011, p.66) defines penetration pricing strategy as a strategy which entails setting the price of the firms product and services at a low point compared to the competitors. To be effective in its pricing strategy, the firm will conduct a competitor market research to determine how other salons and spas located around the university price their products and services.

However, the pricing strategy will ensure take into account the cost of providing the products and services. In determining the price points, the firm will also incorporate the concept of psychological pricing strategy. This strategy entails setting the price at a point which influences the emotions of the customers. The table below illustrates the price of the products offered by the firm in Saudi Riyal.

Promotion strategy

Product and service awareness is the initial level which promotes a consumer to purchase a product. The firm will put effort to ensure effective creation of market awareness. A comprehensive market communication program will be integrated. The program will entail both traditional and emerging market communication strategies. The traditional promotion mix which the firm will use includes public relations, advertising, personal advertising, and sales promotion.

In launching the firm, the management team will organize a concert within the university. The concert will be aimed at creating awareness on the products and services offered within the spa and salon amongst the students. During the first day, the firm will also conduct sales promotion by offering some of its services such as manicure and pedicure free to individuals who will participate in the salon and spa opening event.

In order to reach a large number of students within the university, various mediums will be used in the firms advertising campaign. These include print media such as magazines and posters. The firm will post adverts in the universitys newsletter. The posters will be elected at strategic positions within the university such as the universities pavements leading to the lecture .

This will enable a large number of customers to access the information. The firm will also ensure that it has employees who have effective interaction and interpersonal skills in addition to their qualification. This will play a vital role in creating an effective customer relationship.

The firm will also incorporate public relations campaigns. This will be achieved by sponsoring the university beauty contests. For example, the firm will offer the beauty pageants free services such as hair styling. This will play a vital role in strengthening its relationship with its customers.

Considering the growth in technology, the firm will make use of emerging market communication technologies. One of the technologies which the firm will incorporate is the internet. To achieve this, the firm will develop a website through which it will post information regarding the products and services it offered at the salon and spa.

Through the internet, the firm will be able to undertake direct advertising effectively considering the fact that university students visit the internet more often in their effort to search information. Web 2.0 will also be integrated to enhance sharing of information and to build and online community. Additionally, the firm will also enter into a contract with search engines such as MSN and Yahoo. The contract will ensure that information regarding its products and services is posted on the homepage.

The firm will also incorporate emerging social communication networks such as Blogs, Wikis, Facebook, and You Tube. The social networking tools such as Wikis, Facebook and Blogs will give customers an opportunity to interact with the firms management team. In addition, consumers will be able to air their complaints and complement. The interaction will culminate into creation of a strong customer relationship.

Place

Place refers the ability of customers to access the product more easily. This is achieved through a number of ways such as opening outlets to distribute the product. In their distribution strategy, firms use different distribution strategies which include both direct and indirect methods. However, distribution of a service is different. This is due to the fact that it is difficult to separate the place from the service provider. With regard to salon/spa business, an entrepreneur should ensure that there is a high degree of convenience.

To ensure that the salon is easily accessible, the salon will be located next to the Universitys sports center. This will enable the customers to easily access the salon and spa. Decision to locate the salon and spa at this location was considered after consideration of the traffic around the area. Additionally, convenience will also be attained by ensuring that the salon/spa is customer oriented. One of the ways through which this will be ensured is by emphasizing on the concept of affordability.

Financial projections

In its financial plan, it is the objective of the firm to initiate and maintain the various factors that lead to creation, increasing and stabilizing a firms cash flow. In developing the financial plan, it is assumed that the firm will access the required equity capital. Additionally, it is assumed that there will be no economic crash which has the effect of reducing the firms target market consumption patterns.

A comprehensive research was conducted to determine how the salon will be started. A number of financial projections regarding the firms operations have been made. Upon its establishment, it is expected that the firms sales will be relatively low. However, the firm projects its sales to increase every month with a significant proportion for the first four months upon its establishment. After some time the sales will stabilize and then increase again. The chart below illustrates the firms sales forecast for the first 12 months of its operation.

Figure 1: Table showing the Elegant PMU Salon/Spa sales forecast

Figure 2: Firms pro forma income statement amount in SAR

Pro forma balance sheet

The firm has a well formulated balance sheet which makes it possible to meet its debt obligation.

Firms projected cash flow analysis

Considering the fact that the firm operates as a luxury business, the firm will required to have an initial amount of money to cover its operations. After its inception, it is expected that the firm will have a continual cash flow to meet its milestones.

The firm has incorporated the concept of electronic commerce. As a result, it will be possible for consumers to pay using credit cards. Use of electronic commerce will enable the firm address diversity in consumers payment methods. The resultant effect is that the firm will be able to maximize on its profits.

Problem solved by the firms products and services

Findings of a research conducted revealed that female students are within Prince Mohammed bin Fahad University are increasingly being concerned with their beauty and wellbeing. In their quest to achieve this, they are increasing their consumption of salon and spa products. The salon and spa will ensure that the female students and their female relatives achieve their requirements by supplying them with different salon and spa products.

According to Jordan, it has become a routine amongst female consumers to patronize spas and salons for professional treatments such as hair treatment, manicure, facials and pedicure (2008, p.354). To alleviate their aches and pain, female consumers are patronizing spas for various body treatments such as massage. PMU salon and spa will ensure that the female consumers within the university receive these products more effectively.

Solution

In order to ensure that the customers are satisfied, PMU salon and spa will be well equipped to with salon and spa facilities. Some of these facilities include steam baths, therapies such as crystal healing, and saunas. As a result, it will be possible for the firm to provide the customers with the required beauty and well being needs. In addition, the firm will also ensure that quality services are offered by hiring professionals with regard to beauty and wellbeing.

Opportunity and Target market

The salon and spa will target the female students aged between 19 to 26 years within the university. This arises from the fact that the demand for salon and spa services amongst these customers is relatively high. As a result, there is a high probability of the salon succeeding in this market.

By offering quality services to these customers, there is a high probability that they will refer their female relatives to this facility. This presents an opportunity for the salon and spa to increase its customer base. Therefore, setting up a salon and spa within Prince Mohammed bin Fahad University is very feasible since there is an opportunity for future growth.

Competition

Prior to entering the market, entrepreneurs are required to conduct a competitor analysis. According to Sandlin (2010, p.50), the analysis is aimed at determining the number of competitors operating in the target market. The firms management team will conduct a competitor analysis. The analysis will be aimed at determining the competitors strengths and weaknesses. This will enable the firm to relate to its weaknesses and strengths. The resultant effect is that the firm will identify gaps which it can capitalize on.

The firm will face intense competition from other salons located around Prince Mohammed bin Fahad University. Findings of a market research conducted revealed that there are a number of salons and spas located within the universitys vicinity. These firms have been in the industry for a number of years.

In addition, the salons and spas have diversified their product and services offering. For example, they offer salon and spa products females. This means that the salon and spa will be faced by direct competition. Considering that they have been in operation for a number of years, they have gained substantial recognition.

Despite the intensity of competition, the firm intends to attain a high competitive edge by offering unique services. Coupled with its strategic location, there is a high probability of the firm attracting most of the female students from within the university who had been customers to these salons and spas.

This arises from the fact that customers store loyalty is determined by its proximity to the customers place of residence, work or school. Through provision of a holistic and integrative salon and spa, the firm will enhance creation of a strong customer satisfaction and trust.

Marketing and sales

The firm will ensure that it is effectively positioned as the top spa-salon within the university. According to Porter, effective market positioning can contribute towards a firm improving its competitive edge. This is due to the fact that its positioning acts as a defense against its competitors.

Prior to its establishment, the entrepreneur took into consideration a number of key success factors. The core factors considered include location, environment, reputation, and convenience. The firm is effectively located in an area with a substantial population of females.

The firm will also provide an environment that is relaxing. A high degree of convenience will be ensured through provision of a wide range of salon and spa products and services. In collaboration with the employees, the management team will ensure that the marketing activities are undertaken effectively by offering personalized services.

Management team

The firm will be effectively managed in an effort to enhance customer satisfaction. Effective organization will also be aimed at creating an environment conducive for working and employee development. This is inline with the firms management philosophy which entails respecting the employees and the customers.

In its operation, the firm will have a management team composed of two key personnels who include the founder of the firm and the vice president. The founder of the firm will act as the Chief Executive Officer. He will be charged with the responsibility of overseeing the overall operations of the firm. This means that it is his responsibility to ensure that all activities are undertaken effectively and efficiently.

On the other hand, the vice president will be charged with the responsibility of ensuring that all the administrative functions are smooth. For example, he will ensure that the employees are in good relation. Additionally, he will be charged with the responsibility of overseeing other activities such as marketing, and public relations.

Initially, the firm will operate with a human resource base of 17 employees. The employees will be organized into two departments which include the salon and the spa. The spa will have a 1 nail specialist, 1 energy therapist and 3 massage therapists while the salon will have a total of 10 stylists and a receptionist. Each department will have its own receptionist.

Current status

Currently, the firm is in the process of formulating it operational strategies. The firm is also seeking for investors who can assist in lending financial capital to the firm. In addition, the firm has also posted an advert in the local dailies as the initial recruitment drive.

Financial sought

The entrepreneur has estimated the set up capital to be SAR 700,000. The firms core source of startup capital is from investors. The firm will seek financial capital from investors who intend to venture into the industry by lending their money to the entrepreneur. In return, the investors will receive a return on the amount advanced. The interest rate will be relatively higher than the rate offered by banks.

In summary, it is expected that the firms plan will attract investors to invest in the business. This is due to the fact that there is a high probability of the business having high returns.

Reference List

Baker, R. (2011). Implementing value pricing: a radical business model for professional firms. Hoboken, N.J: Wiley.

DAngelo, J. (2010).Spa business strategies: a plan for success. Clifton Park, N.Y: Milady Cengage Learning.

Green, M. (2001). Salon management. London: Thompson Learning.

Greene, C. (2011). Entrepreneurship. Mason, OH: Cengage Learning.

Jordan, T. (2008). Vancouver: the complete residents guide. Dubai: Explorer Publishing.

Professional Beauty Association. (2010). Salon/Spa performance index gained 0.5% in the first quarter amid rising sales and and customer traffic level. PDF File. Web.

Sandlin, E. (2010). Start your own hair salon and day spa: your step by step guide to success. New York: Entrepreneur Press.

Executive Summary

A business plan is nothing but a bit of fiction with immense ideas. It offers an insight to investors before they venture into invest in any business.No doubt, the product should be not only have strong market demand but also have experienced management team. Any investor will ready to invest in enthusiasm and vision. A business plan must primarily focus on testing the service or product offered and should be defining its business model.

If you have a perfect business model, professional investors will find no difficulty in investing your project. A business plan will serve as a map for ones companys future and also highlights whether the business idea is feasible or not. A business without business plan is juts like a boat that is drifting in the middle of ocean without direction or parameters for determining its progress. Thus, a business plan will contain all essential information to attract investors and guide the promoter in right direction. (Wadhwa, 2008).

Real International, Inc is a newly incorporated company and its promoters want to fund $, 100,000 as start -up capital and to raise a loan of $ 1,400,000 to bring their innovative product to market. Further, promoters anticipated $27, 00,000 as sales revenue at the end of the second year of business operation. The promoters wishes to raise the loan portion either from the venture capital market or by way of bank loan at an annual interest of 7%

Real International Inc intends to manufacture two products. Scroll Fast is the first product which displays graphic, alphanumeric and animated figures in excellent color and is of commercial in nature. Novel Scope is another product which has a skin texture of a small sized monitor which displays optic vision in retort to the human music, voice and other related sounds and is of entertainment in nature.

The estimated revenue for these products at the end of second financial year has been projected as follows:

Projected Gross Revenues:

Further, the above sales estimation is regarded as conservative as they are footed on a market penetration of just 6% only. (McKeever, 2008, p.238).

Current economic policy of federal government is to improve economic recovery by minimizing discount rates and to encourage consumers to spend. Will favor the Real International Inc. With present government action and with anticipated future economic recovery, majority of individuals disposal income will be likely to swell in the next five years. This connotes that more people will have more money to spend on entertainment activities.

Since, Real International Inc has the patented technology and the product being innovative and unique in nature, the company has optimistic view that it will penetrate the existing market and will able to capture at least 10% of the market share of the industry.

Description of venture

Real International Inc is intended to manufacture and market electronic display products for both recreational and commercial purposes. These products are based on the technology that has been covered under a U.S. patent and the company owns an exclusive license for the product patented. All the stocks of the Real International Inc is owned by its promoters namely John Cook and Henry Mathew who are also acts as directors of the company. In case of investment by any venture capital fund or by any third party in the stocks of the company, the promoters are ready to enter into a shareholders agreement with the notion of safeguarding the interest of the minority shareholders in the future. (McKeever, 2008, p.235).

Real International Inc intends to manufacture two products both relied on the patent owned by the company. Employing its patented technology, the corporation can develop a moving electronic sign which is more adaptable, economical and attractive than the products existing in the market. One product named as Scroll Fast and this displays graphic, alphanumeric and animated figures in excellent color. The specialty of the product is that it can be produced in various sizes.

At initial stage, the corporation intends to start four feet vertically and five feet horizontally. This is a unique product and this can be used by any kind of business which includes banks, shops, restaurants, supermarkets, stores, bars, airline terminals, real estate offices, railway stations and bus stations. They can inform the consumers about the special features of their services or events or any special offers they make.

If there are any tie-ins for reimbursement of expenses, the cost of the unit will be further minimized. This product is an excellent tool for brand promotion as corporations that extends services or manufactures products in soft drinks, insurance or clothing may provide better discounts to retailers by way of better discount in barter for advertising. (McKeever, 2008, p.237).

Industry Analysis

Industry Research

Source: (McKeever, 2008, p.235).

In the market survey conducted, it has been revealed that though Scroll Fast is a new product, it is going to triumph down the other brands in the market that is having relevant market share as per the above table. Though , competitors are currently is owning a good share of the market , once the Scroll Fast is introduced in the market, no doubt it is going to revolutionize the market due to its uniqueness and products distinct advantage.

If one look at the above data , they may understand though a good market share is being owned by the competitors , they are going to loose their market share once the Scroll Fast is introduced due to three factors namely price advantages , quality and innovation.

The management also aware external factors like industry trends , the competitive trends , the make up of the market , demographic trends , economic climate and the role of technology. Further, management has to concentrate also on legal, social and political aspects that could hinder with the business activity,

Since, promoters are dealing with an emerging industry, though there are many opportunities that are ripe, it may also pose a significant risk. It is difficult to identify in emerging industries factors relating to success and failures. Recognizing ones skill sets and a plan to change speedily and evolve the business plan will be the critical success element and the business plan should clearly demonstrate how it is going to plan to respond to industry growth.

IRS (Internal Revenue Service) produces every year an industry balance sheet. This is a sum of all the balance sheet filed in a particular industry and is compiled from the corporate tax returns. This acts as an excellent tool for evaluating the financial health of the industry as well as to compare the financial projection of Real with that of industry and to analyse whether business assumptions have been made on prudent basis or not.

For instance, if Real has forecasted staff salary on higher terms, then it could be compared with the industry average and then fine tuning can be made in the Real financial projections. Thus, industry analysis will be of immense help and will offer unbiased style to examine business plan assumptions.

Real should consider the following questions while making assumptions on industry analysis.

• The present financial status of the industry.
• How many players are there in the market
• The magnitude of split in the size and about number of large vs. small companies and their sales volume.
• What market areas are underserved and what market areas over served and which market demonstrate the most conducive climate for future growth.
• What are the competitors promotion and advertising strategies?
• What successful value-added factors are being employed
• What are substitute services or products that exist in the market
• Who is having bargaining power and whether it is with suppliers or consumers. (Balanko-Dickson, 2006, p.26).

Real has to look into the loyalty factor that exists in electronic industry in which it operates. If the competition and industry is robust, Real has to evaluate how realistic is it that one can get customers to switch their loyalty and transform their buying preferences.

Real has to ascertain whether the industry demands large volume of accounts receivables and if so, this may negatively impact its capacity to pay staff and suppliers. Thus, Real has to recognize those industry factors that negatively impact its cash flows.

Real has to pay attention how change in technology can upset its business activity in future? For instance, there has been sudden change in the technology in the music industry and how Apple Computers was able to successfully dominate the online music market. There has been a strong case for the business model for selling music was aggravated by the more than 200 million computers that have installed Apple iTunes software alone. (Balanko-Dickson, 2006, p.26).

Marketing Plan

Marketing plan acts a pivotal role in sales projections in any business plan as this will give promoters some sense of support as they plan to introduce a new product. It has become essential on the part of the promoters to develop a logical sales revenue forecast. As the majority of the new products launched in any market always fail to produce adequate profit, lenders and investors always want to have a vibrant data to substantiate a claim that a new product will be an innovative.

Further, the promoters also try to introduce two new products employing the same technology. The first is intended for the commercial market and hence it is priced at high level. Second product is intended for the consumer market and priced at lower levels. (McKeever, 2008, p.234).

Real International Inc intends to have their sales representatives and its product distributors to handle the major part of the marketing activity of the company. Since, the promoters are introducing new products and the company is being a small business, it is wise not to leave the marketing to outsiders as it may result in a disaster. When a product is a novel one, no wholesale or sales representatives or retail outlets will be likely to have much control in its triumph. (McKeever, 2008, p.234).

At the outset, Scroll Fast has the following strong market and sales capabilities:

• The product is distinctive as its style of operation and its unique technical capabilities. For instance, it offers at least thrice the visual resolution what is being offered by other scrolling signs.
• There are very few other manufacturers who produce programmable strip signs that cannot match Scroll Fast function.
• The gross annual turnovers of these products at industry level are projected to be $11,000,000 as estimated by Advertising Graphics Magazine, fall 2008. This symbolizes an increase of 30% from that of previous year. The existing products are analogues in nature. It is really interesting to note that no one existing manufacturers sways a major share of the market.
• Further , Scroll fast is having a distinctive price advantage than compared to its competitors product The other competitors products are having a price label of $2000 to $2500 and whereas Scroll Fast is being priced at only $1599 only. Thus, Scroll Fast is not only competitively priced but also is having high efficiency of design inbuilt in the patent method employed.
• Further, service contract for Scroll Fast is being offered at an above average for the industry.
• Moreover, Warranty policy for the Scroll Fast is also being offered at above average of the industry level.

Further, it is estimated that entire market for programmable signs in U.S.A is to be around $ 13,000,000 and Real International Inc has projected sales of 1500 units Scroll Fast and 1000 units of Scope Novel at the end of second year of production at a wholesale price of $ 1599 and $ 300 each respectively.. However, these sales estimation is regarded as conservative as they are footed on a market penetration of just 6% only. (McKeever, 2008, p.238).

Novel Scope is another product which the corporation is going to introduce and it is also a unique product. This product has a skin texture of a small sized monitor which displays optic vision in retort to the human music, voice and other related sounds. The display is being made in vivid colors and the prototypes generated in retort to sound are really astonishing. It could be very famous among young children, who could experiment with the echo of their own voice. In a consumer survey, it was found out that Novel Scope has been preferred by more than 60% of the consumers..

Production/Operation Plan

Productivity and success are laced to employ ones mind creative process to full extent. A business plan will make one to think in novel and creative means about a business that one has not imagined before. Further, a business plan also forces one to create goals and offers the mechanism to control the result. In short, a business translates ones ideas into actions. (Klein, 2008).

The promoters of Real International Inc are of the view that a successful business requires at least two products to survive. This view is partly true as diversification can attain vibrant advantages if one product encounters resistance in the market. (McKeever, 2008, p.234).

Scroll Fast product has been entirely developed and examined. The first 150 units have been already been finished and a production capacity of 250 units per month has been already set up. It is estimated that the sales rate will be maintained at a minimum of 150 units per month. This sales projection as well as long-run sales estimates for the product is footed on extensive research into the requirement for this variety of product as well as into the sales track record of present and existing but low quality product. This research also included consumer surveys where probable consumers were requested to rate a series of existing products against the Scroll Fast. (McKeever, 2008, p.237).

The present manufacturing facility is being carried on a leased facility over 2000 square feet on a moderate rental. This carpet area is being employed for both manufacturing and office purposes. For storage purposes, another 400 square feet area is being rented on an adjoining place. There is no serious worry about the continuation of the lease as Real has entered an option to renew once in three years with a ten percent increase in rent. In case of future expansion, adequate space is available in the same area.

Organizational Plan

Real International Inc is a corporation where there will be two share holders who are currently directors of the corporation. There will be following position for the management of the corporation.

• One director will act as a president and treasurer.
• Another director will function as vice-president and secretary of the corporation.
• One employee will officiate as project manager cum accounts payable manager.
• The above key officials will be assisted by managers and assistants.

Real International Inc has been incorporated as a for profit Subchapter S corporation. This kind of incorporation will facilitate to capture both the advantageous of corporate status offered by the limited liability to the shareholders and also the capacity to be taxed as a partnership firm and this will facilitate the formalities of transferability of interests if need arises in the future. Each promoter has now half of the original stock issue.

Assessment of Risk

At start, Real will function with restricted number of wholesalers and sales representatives who have proven track record in marketing new electronic products. Further, the stress will be given on foraying into market penetration in a selective region which is close to Reals manufacturing unit. The prime cause for this cautious approach is to recognise effective pricing strategies and marketing techniques. Data collected will be employed in calibrating manufacturing rate needs, inventory requirements etc especially for general North American marketing part. In a nutshell, Real want to be more cautious while walking with a steady and firm tread before it can start to run.

Since the present manufacturing unit is having limited production facility, Real want to emphasis on improving to higher manufacturing volume as this will result in lower price as well as to enhance its products features.

Costs and selling prices of the products

The estimation included in this business plan is footed on various estimation about product cost and its selling prices.

Wholesale Selling Price

Direct (variable) Cost of Each Unit

The above projections do not include any corporation administrative overheads like management costs, rent etc. The above costs are solely related to manufacturing cost of each unit. With the help of extensive market research, all costs and selling prices have been arrived at. These assumptions highlight not only the realities of the market place but also the managements price objectives.

(McKeever, 2008, p.244).

Financial Projections and Statement

Real International Inc is in the start-up stage and hence no cash flow has been prepared. However, Real has prepared projected profit and loss account and balance sheet for the next five years. As per this financial projection, Real is really in need of $150,000 as equity capital. The promoters have injected just fifty percent of this i.e. $75,000 and seeking the balance from the investors. (McKeever, 2008, p.244).

References

Balanko-Dickson, Greg (2006).Tips and Traps for Writing an Effective Business Plan. New York: McGraw Hill Professional.

Diane Publishing Company. (1995). Wood Pelletization Source Book: A Sample Business Plan for the Potential Pellet Manufacturer. New York: Diane Publishing.

Klein, K. (2008). Do You Really Need a Business Plan? Business Week Online.

McKeever Mike P. (2008). How to Write a Business Plan. New York: Nolo.

Wadhwa, V. (2008). Before You Write a Business Plan. Business Week Online.

What is a beauty salon business plan? Keep reading to find out! Here, youll get an idea of how to write it with the example of Trendsetters Glamorama salon business plan.

Executive Summary

Trendsetters Glamorama is a proposed full-service salon and day spa with an upscale and therapeutic atmosphere for a premium price. The business will open its first location in the suburbs of Houston, Texas, in the spring of 2017. It will start with a single business in this location. The business will be dedicated to the provision of the highest quality services to the most discerning client.

The companys focus will be the provision of beauty services in the area, with plans to expand to the surrounding states. However, it wishes to spread its operations later to the national level. The companys focus will not only be on glamour and beauty, but also educating clients on healthy hair, skin, and nails with a whole-person approach to inner beauty and tranquility.

Apart from offering the above services, Trendsetters Glamorama will also use and sell only-top-of-the-line beauty products. The provision of these products will most definitely place it above competitors in Houston who mostly provide the services without attendant products. The company will operate as a Limited Liability Corporation (LLC) with plans of incorporating and expanding as needs dictate. The housing of this installation will be crucial just as it is for the case of its location.

The salon will be housed in a state-of-the-art 5,000 square feet retail shopping center. This bazaar will also be located in a prime area of Houston. To ensure adequate competitiveness, Trendsetters Glamorama will have operating hours that are suitable for targeted clients. The salon will work from Monday through Wednesday at 6 am10 pm. Since most of the targeted clients are free during weekends, the salon will also operate on a 24-hour basis from Thursday through Saturday. However, it will remain closed on Sundays.

The target clients include professional women, the working diva, stressed moms, and any person who might like to experience World Class Service and be Red Carpet ready. The client will be the most important stakeholder in this institution. He or she will have the opportunity to experience an array of professional beauty services that range from a simple wash and blow-dry to a full-scale makeover, facials, body treatment, and massages.

In addition to the above services, the clients will also have the option of complimentary beverages and snacks. The staff members who are to provide the services for the clients will be selected based on experience and qualification.

The industry that the company will operate in is the beauty and cosmetic industry. Competitors will include people who are already operating here. The following is the analysis of this industry, its target customers, competitors, and its products and services. The paper also formulates a marketing plan, a management plan, location, and financial plans.

Business Idea

Since I will spend one day like to be a salon owner, the business idea that I will base my business plan on is a salon. I would like to establish a full-service salon. I will be operating it from a storefront location, but in addition to that, I will also offer mobile salon services. I will not only focus on beauty, but I will educate my clients on maintaining healthy hair, skin, and nails.

Company Description

Trendsetters Glamorama will be a full-service salon and day spa with an upscale and therapeutic atmosphere for a premium price. Since this implies a high price, the business will have quality as its key business strategies so that it can capture clients who expect premium services. Opening its first location in the suburbs of Houston, Texas, specifically at Washington Avenue/Memorial Park in the spring of 2017, Trendsetters Glamorama will be dedicated to providing the highest quality services to the most discerning client.

While our focus will not only be about glamour and beauty, we will be educating the client on healthy hair, skin, and nails with a whole person approach on inner beauty and tranquility. We will also use and sell only top of the line beauty products.

So far, we have managed to do the groundwork, such as determining the specific business location. We have also made, so efforts to inform our friends verbally and on phones about the coming business. This salon will be superior to other salons in Houston because of its unique approach to catering to the client. In addition, its high-quality services will differentiate it from the rest.

Trendsetters Glamorama will be operating as a Limited Liability Corporation (LLC) with plans of incorporating and expanding as needs dictate. The salon will be housed in state of the art, 5,000 square feet retail shopping center. Trendsetters Glamorama will have very competitive operating hours. Monday through Wednesday hours will be from 6 am  10 pm and Thursday through Saturday will be open 24 hours and closed on Sundays.

Trendsetters Glamorama realizes that each client has a unique schedule and preferences, but the majority of clients love to be beautified toward the end of the week. This finding reveals why we chose to cater to demand with 24-hour services on Thursdays, Fridays, and Saturdays.

However, on Sundays, the business will run from am to midnight to capture clients who would have probably not had time the previous days and ones who would wish to begin their week with their hairs well made. Therefore, Sunday will be the best for this category of people.

Trendsetters Glamoramas target market is professional women, the working diva, stressed moms, and any person who would like to experience World Class Service and be Red Carpet ready. Our clients will have the opportunity to experience an array of professional beauty services that range from a simple wash and blow-dry to a full scale makeover, facials, body treatment, and massages. We will also provide complimentary beverages and snacks.

Besides our atmosphere and years of experience, one distinct advantage our salon will have is the availability of a staffed and licensed daycare for our customers while they are being pampered and beautified. Since the business is expected to grow significantly, it will later introduce mobile salon services to its elderly clientele. However, this introduction will be based on whether we will have instances of such people demanding our services since most of them do not prefer salon services.

The Industry, Target Customers, and Competitors

Beauty Industry

The industry in which the business will operate in is the beauty and cosmetic industry. This industry is a strong one in the United States. Many other institutions operate within the same industry. Some individuals have placed the salon business in the beauty industry. Their reasons include the returns of the services that are provided in the institutions.

The many salons that operate in this industry offer a variety of services to their clients. The industry is performing very well. In fact, organizations that have been established here have reported massive profits over the last few years.

Companies that offer leisure services mainly dominate the industry. The global economic crisis may have affected the beauty industry significantly. However, with the measures put in place, the economy has improved to the extent that people have more money to spend in this part of the economy. The freedoms enjoyed in the US have also contributed to the industry. Clients use this industry as a means of expression. The service industry within which this sub-industry is positioned is a lucrative one.

Most successful organizations have operated from the place. The major companies that operate within this industry have ensured the provision of services to their clients in a friendly manner. The beauty and cosmetic industry play an important role in the US economy, thus contributing significantly to the countrys GDP.

This industry has employed thousands of individuals. The proposed business will contribute to the employment of more employees. As a result, it will create employment for the unemployed in the country and state. The industry was selected based on its growth potential, diversity, and ease of investment.

Target Customers

The targeted customers include women in general, who are the main buyers of services in the target industry. Apart from this target group of customers, the company will target busy women, corporate women, and other individuals who are unable to seek beauty service during conventional times. Most women in the business world have a desire to look beautiful and still manage to perform their corporate roles. Trendsetters Glamorama will ensure that these clients have the best services in the form of beauty services at their own convenience.

The United States clients have demonstrated a preference for beauty services. The demand for these services is driven by the improved economic performance of this region. The characteristics of the targeted customers include women who are working and are unable to seek beauty services at common times.

Trendsetters Glamorama targets to offer services to employees of large organizations where companies contract the business to seek beauty services for their employees. By offering services on weekends, the company will attract people who are largely working during weekdays.

The characteristics of customers that are targeted by this company also include their ability to pay for the services offered. The company targets high-end customers. It will use this level as a baseline in its service delivery. Just like most organizations, this business is focused on profit generation, and hence, the reason for the high pricing of the rendered services. The company will focus on marketing itself to corporate women as the best for their class.

In the state of Texas, where Trendsetters Glamorama is to be located, there is a high demand for beauty services among women. Most of the available competitors offer services to the general population. Few of them offer premium services. By targeting the high-end market, Trendsetters Glamorama will ensure that it stays on top of the competition while at the same time recording a high-profit margin.

Competitor Analysis

Competitors

The existence of competitors for an organization is important since it keeps the organization on toes when it comes to looking for ways of remaining on top of the competition. Trendsetters Glamorama has few competitors in Texas. The existing companies are Body Envy Houston, SOK Salon, Hot Tops, Taura, SeBon Hair, and Delacour Hair.

These companies serve a number of customers. Most of them offer a variety of services that are different from those offered by Trendsetters Glamorama. Although these businesses are the largest of the competitors, many other smaller salons have a well-defined clientele. The competition will be significant for these companies. The first few years are expected to be the most competitive.

Body Envy Houston, which is one of the largest competitors, operates a number of beauty outlets in Houston. This business will be the main competitor that will offer stiff competition to a new company. This company also targets the corporate women using the strong brand name that it has built over time to attract these customers.

On the other hand, SOK Salon operates small salons in Houston, with the target customers being different from those of Trendsetters Glamorama. This salon offers its services to a wide variety of clientele. It uses pricing as the main strategy in competition. Its services are low-priced, thus attracting many of the clients in the areas where the salons are located.

Hot Tops is another salon that is located in Houston. It will also offer competition to Trendsetters Glamorama. Focusing on the high-end market for Trendsetters Glamorama will make it compete against this company. Most of the smaller salons in Houston are dependent on their loyal customers, thus providing their services to these customers at their preferred rate and convenience. Trendsetters Glamorama can offset this competition through the provision of the targeted high-end pricing.

Competitive Advantage

Trendsetters Glamoramas competitive advantage is in its ability to offer services to the defined target customers. Unlike most of the salons in Houston, Trendsetters Glamorama targets to offer services for a distinct group of women in the corporate world. Few of the available salons offer these services. Hence, the company will win the competition along this line.

Pricing is another factor in any competition. Companies can use their prices to their advantage. When organizations set low prices for their goods or services, they are able to attract a large number of customers since most of them can afford these products and services. However, these types of companies are forced to cut on their profits since they offer large volumes of goods or services at a cheaper rate and lower profit margins.

Trendsetters Glamorama will offer the services at a relatively higher rate in relation to the other salons, thus providing an array of services to the corporate women.

The premium services that will be offered will also be unique, with the company providing a variety of goods and services in the industry. The other competitive advantage that the company will use is the promotion of extra services in addition to the offered hair and beauty services. Trendsetters Glamorama will offer a variety of services to women who seek services from this company.

Products and Services

Trendsetters Glamorama will be dedicated towards the provision of the highest quality services to the most discerning clients. This company will focus on the provision of services that make women more presentable while incorporating the latest in the field of beauty and fashion. Clients will be assured of the latest fashion where they can afford to choose the latest form of designs.

The focus of the company will not only be on glamour and beauty. The other role will be educating the clients on healthy hair, skin, and nails with a whole-person approach to inner beauty and tranquility.

In most of the salons that are located in Houston and its environs, the main practice is the provision of beauty services without education on how to maintain healthy skin. These businesses do not also train clients on how they can maintain a beautiful body on their own without major chemical interventions.

Trendsetters Glamorama will train patients on this and many other interventions that they can make to keep their hair and skin healthy. Apart from offering the above services, Trendsetters Glamorama will also use and sell only top-of-the-line beauty products. The provision of these products will most definitely place it above its competitors in Houston who mostly provide the services without attendant products.

Customers will be advised on the best products for their various needs. They will be provided with additional information on how to use each of the products.

They will also be educated on the effects of the various chemicals in use at such installations, thus ensuring that they are able to use them safely without inflicting any self-harm. Therefore, the salon will also serve as an outlet for beauty products. These are in high demand for these services. As a result, clients who seek services here can also get an opportunity to use the products at the same place.

Marketing Plan

Marketing is the most crucial part, especially the early stages of the new organization. It will require a mixture of many practices. In any organization that plans to put up a successful marketing campaign, there is a need for a working marketing plan. This section provides the marketing plan that may be applied in the company.

Marketing Objectives

Every marketing plan needs objectives. The objectives of the developed marketing plan include promoting the company and/or increasing awareness of the general population on the existence of its operations. The other objective is to increase the number of customers who visit the company each day. There is a need to advertise the services that are offered at the organization. Hence, the other objects will be to increase customer knowledge of the goods and services that are available at Trendsetters Glamorama.

Targeting and Positioning

The marketing campaign will target the female professionals that the company hopes to attract as clientele. The approaches used in the marketing campaign will reflect the targeted group of people.

The companys marketing plan will also target the busy professionals who work in large organizations together with those who work in other areas and are interested in beauty and cosmetics. The company will target the area of Houston and the state of Texas in the first few years. However, it will only target other areas of the country after expanding to the other states.

The area of Texas that Houston is located in is densely populated. Many corporate women and other individuals in this place require the services being offered. The marketing plan will seek to ensure that the population is aware of the services that are offered at Trendsetters Glamorama. Many women in the area of Houston work in the companies around here. However, these companies will most likely exhibit a high demand for the services that are offered at the company.

Market Penetration

The location of the store that will house the salon is important since it will dictate the visibility of this store. A more visible and appealing store will be a major attraction for the target audience. This case will contribute to profitability for the organization. In the first few years after the start of operations, Trendsetters Glamorama will operate in one of the 5000 square feet retail shopping centers in Houston. This location will be enough to allow a large number of customers. It will create a room for the various services being provided in this business.

Pricing Strategy

As stated earlier, the company will use pricing as a major strategy to promote itself as the best option for the Houston inhabitants. The company will offer its goods and services at a premium price. The strategy is expected to attract corporate women that work around the area. The products available at the salon will be provided at an appropriate price to customers, with those attending the salon receiving goods at a lower price.

Marketing Mix

Different modes of marking will be employed in the company. The main advertisements will be printed on paid adverts, which will be in magazines and newspapers. The company will also use billboards for advertising itself while at the same time popularizing the goods and services that it offers. Television is a major marketing tool. This organization will put up adverts in the local television stations to ensure that the public is aware of the products and services provided in the organization.

The company will hire vehicles that are specifically created for marketing. It will use them to spread the word on the new company. Apart from the use of television in broadcast, the radio is another important tool in marketing. The company will utilize it in the marketing plan.

A program will also be created where the most frequent clients will be awarded special gifts as a form of appreciation. The internet is rapidly growing as a tool for marketing. Trendsetters Glamorama will operate a website where individuals can make appointments or confirm the events and the services offered at the institution.

Management Plan

The company will have a management plan that allows room for rapid growth. In the initial years of operations, the company will be directly managed, with the owner being the Chief executive officer. The manager will be responsible for the operations in the company.

The responsibilities of the CEO will include the control of the overall functions of the organization, including the financial analysis of the company. The performance of this company will also be under review from the CEO. The manager will be responsible for the daily operations within the company where he or she will provide administrative functions to the company.

The company will have several departments for easy management. The department that will be important at the start of the company is the marketing department, which will be responsible for popularizing the company. The department will be responsible for the implementation of the marketing plan that is highlighted earlier. The other department that will be formed is the human resource department that will be responsible for the employment and motivation of staff.

The company will require highly qualified and active staff members. This department will oversee the implementation of this activity. The finance department will be responsible for the companys financial performance. A manager will run each of these departments. This staff member will oversee the execution of plans for the respective departments.

Location Plan

The company will be strategically located in Houston, Texas. The location will be close to the target clients. The companys strategy is to operate in a location that is open to corporate women and presentable enough to allow easier marketing. The company will target a population that is mainly between 18-50 years.

Houston is a place to find this generation of women. Hence, the company will be located close to the central business district, where there are many companies with women working in them. The location will also target customers who spend most of their time in the central business district.

The site that is selected for the company should be accessible to the clients on foot together with those who have their cars since there is available parking. Therefore, the building will also house secure parking for its customers, with most of them being expected to drive here. The building should be within sight from the town to enable easy access for the clients. The neighbors of the organization need to be well chosen. The company should be far from the competition, but within areas that are busy enough to guarantee successful operations.

The companies that should be in the neighborhood of this corporation should be synergistic to it to provide the resources that are needed to operate the business. Such a neighbor will also provide customers to the organization. The plan is to house the salon in a state-of-the-art, 5,000 square feet retail shopping center. This building will have adequate parking and a host of other businesses within it.

Financial Plan

Trendsetters Glamorama needs a well-defined financial plan to ensure that it succeeds. This section contains the unit economics of Trendsetters Glamoramas first store that will open in Houston. The company targets to serve about 100 customers in a day for this first store, which is about 50% of the daily 200 customers who are targeted in the first year of operations. The number is expected to have stabilized over the next three years.

Hence, the company should be recording the targeted profitability by the third year. The company will source its funds from investors and savings. It will get $500, 000 from investors and $200, 0000 from savings. An estimate of the earnings per customer is about 80 dollars. This figure is the average expected payment of services. Therefore, the company will make about $8000 a day, with a monthly return of $240,000 dollars at the peak of its operations.

The operating expense will increase as the company grows and opens more branches in Houston and other parts of Texas. The amount of money that will be used to popularize Trendsetters Glamorama is $10,000 for the first year, which will mainly go towards the implementation of the marketing plan. Trendsetters Glamorama will have full-time employees. Hence, the company will also spend significant sums of money on the employees salaries and wages.

The estimated value of the salaries and wages for the first year of operations is $100,000, which will pay the founder, the general manager, and the other staff members. The company will be housed in a rented store for the first year.

Hence, the rent will also contribute to operating expenses. This expenditure is estimated at $50, 000 for the first year. The overhead costs will also be important for the company, including the payment of electrical bills. The sum of money to be used for all the overhead costs is about $20,000 for this first year.

Executive summary

Sanford Sandwich Company is a newly formed business that deals with the production of the finest sandwiches manufactured with natural ingredients and the best bread. I hope to establish a dependable big following by providing tasty and fresh sandwiches produced from local ingredients available. The ingredients will be supplied by the local providers. By the end of the first year of business, our profit target is set to be $20,500. The projections for the expected profits of the second and the third year are $71,100 and $159,700 respectively. All of this will be realized from a starting investment of $15,000. Our current investment is $5,000, against the total required investment of $15,000; this means that there is a deficit of $10,000 that we still need.

Business Overview

Weiss Sandwich Company is a newly formed business that deals with the production of the finest sandwiches manufactured with natural ingredients and the best bread. I hope to establish a dependable big following by providing tasty and fresh sandwiches produced from local ingredients available. The ingredients will be supplied by the local providers. The ingredients will be prepared on site with the aim of giving the customers a fresh natural taste. The reason for using local suppliers is to personalize them, thereby making our sandwich experience more exciting and unique. We also plan to carry out a contest for customers to showcase their talents by making their sandwiches in our outlet so that we can evaluate them and check on what we can add.

By the end of the first year of business, our profit target is set to be $20,500. The projections for the expected profits of the second and the third year are $71,100 and $159,700 respectively. All of this will be realized from a starting investment of $15,000. Our current investment is $5,000, against the total required investment of $15,000; this means that there is a deficit of $10,000 that we still need.

Financial overview

Our target is to expand the business by at least 5% every month. In order to achieve this, we have strongly emphasized on robust sales for the first year and we intend to improve on that in the second and third years respectively. Our sales projections for the first year are $85,348. For us to achieve this, we have a plan to aggressively increase our sales month by month. This target is in line with the tendency of the customers within the area to buy sandwiches. By the end of the third year, we expect that the sales will have tripled. The business intends to draw down a minimum amount for it to have enough working capital to sustain it during its first year of operation. The figures below indicate the projected cash flows and profit and loss.

Mission statement

Our intention is to give our customers good quality and good price. This will be attained by providing first-class sandwiches and competitive pricing of the sandwiches. Our ingredients will be sourced locally; this implies that our customers will get the finest locally produced sandwiches. We will take advantage of the fact that the consumers from the area normally want to support their local enterprises. Eventually we want to be branded as the best sandwich outlet in the South East, in addition to being recognized for supporting local suppliers and farmers.

Business objectives

Short term objectives

Our short term objective is to expand the business by at least 5% every month in order to realize a total sales target of $85,348. This means that we intend to sell twenty breakfast sandwiches and ninety lunchtime-sandwiches daily for 365 days of the year.

Mid-term goals

Our main aim is to continue growing the business by bringing on board additional customers month by month; this translates to the fact that the business will grow exponentially. In addition, we intend to excel in our services till we become recognized as the best sandwich outlet of the year. Consequently, we plan to expand by opening up another sandwich outlet in the region.

Long range goals

Expansion is our key strategy. We need to expand within and without and continue spreading to other parts of the world. The expansion does not just end there; we intend to expand beyond our borders to reach the other countries of the world.

Openings and fears

Openings

The main reason why we are setting up the sandwich outlet is to be exclusive in regards to the quality of our sandwiches, for instance:

1. Our customers will be highly entertained by our high profile sandwiches.
2. Our location is in a highly populated business environment; hence, we will have many customers.
3. We will offer packed breakfast or packed lunch to our customers.
4. There are new office blocks under construction within the area, which translates to additional customers.

Threats

Even though we expect our business to be successful, there are threats that it is likely to face, for instance:

1. Stiff competition from other sandwich outlets which are located within the same area.
2. We will be constantly on our toes to maintain our unique identity in order to stay ahead of our competitors. Our focus will entirely be on quality as we make use of the locally available ingredients.
3. Maintaining a competitive price for a new business is tricky; pricing still will remain to be our main focus.

Exit strategy

Best case

Just as it has been stated in our business objectives, our main motive is to make the sandwich outlet successful and consequently expand to a level where we open up other additional outlets within the region and beyond the region. Therefore, if everything works out as planned, we will appoint a professional manager and establish a professional team to run the business.

Worst case

If we fall short of our first years targets, it will mean that our business model is not viable; therefore, we will have to track and monitor the business activity and operations on a daily basis. We intend to do a monthly examination of our sales and revenue so that we know our exact position. Also, the progress of the business will be checked at half a years time. If we still fall short of the targets we should re-assess our marketing and publicity. When our efforts do not pay off, then we will adopt the next option, which is to liquidate the business and pay off the debts which will have accrued by then. Actually, these debts will be negligible.

Market breakdown

Market research

Our business idea and business plan have been validated through a market research that we carried out. The sandwich market in the US is growing rapidly and it is highly valued. Very many people will have a sandwich for lunch. Our location is very strategic to capture the attention of the surrounding residents and businesses. We offer the best sandwich prices than our competitors, which enables us to earn good revenue. The basis of the market research is to make us stand out among the other sandwich outlets. Our market research focused on the competitors, whereby we looked at their pricing, products, customer service, and the general business. In addition, we developed a short questionnaire to interview the surrounding residents and the business with an aim to give us a clear picture of their expectations.

The US sandwich market

The US has the highest valued sandwich market all over the world. The market is valued at more than 3 billion pounds (Mortimer, 2011, p. 20). At least half of the US population consumes a sandwich every year, considering that more than one and a half billion sandwiches were sold in the previous year (2014) with an optimum price of $1.66 (Cushing, 2005, p. 62). Of the many sandwiches that are bought, 55 percent is take-away and the customers consume them over lunch. 7 percent is considered to be snacks (Gallaugher & Ransbotham, 2010, p. 200). Men are the leading consumers of sandwich as they account for 58 percent of the sandwiches sold. The optimum price of a sandwich is $1.67. The age bracket of the majority of the sandwich consumers is between 25 years to 44 years and they account for 51 percent of the sandwiches sold.

The local area profile

The profile of the local area where the business will be set up is as per the government records. The area has a total population of 259,536 people, in which 125,473 are males and the rest (134,063) are females. 48,697 individuals are aged between 0 to 15 years. 191,158 individuals are aged between 16 to 75 years (Kumar, 2005, p. 12). There are 111,243 households with residents with an average size of 2.33 family members. There are many big business complexes; therefore, many organizations are accommodated. The various organizations that are accommodated in the business complex include: shops, restaurants, banks, shopping mall, and many offices. In addition, the area has a local university. The transport system in the area is also effective as there are both a bus station and a railway station.

The findings of our market research pointed out to the fact that the area is a prime location for our sandwich outlet because of the following reasons: there is a large population of the residents, our sandwich outlet will be located along a busy street, the location is our local area and we have a better understanding of the residents, and the residents in the location are considered to be high net worth people who have a higher propensity to consume the sandwiches.

The other sandwich shops are also located along the busy street; this will enable us to compete on the same level. An analysis of the street was also carried out with the aim of monitoring the human traffic in the morning hours and in the afternoon hours. The morning traffic was monitored between 7:30 and 11:00 in the morning, and the afternoon traffic was monitored between 12:00 and 3:00 pm. The research findings revealed that on average at least 1,000 people use the street in the morning while around 2,000 people use the street in the afternoon.

The market research also involved taking a closer scrutiny of the competitors. Along the street, there are other sandwich shops. The Sandwich Deli does not open in the morning; it only opens in the afternoon and it serves an average of 150 customers daily. Just Sandwiches trade from morning and it serves an average of 275 customers daily. Tramezzino also opens from morning, though they start selling sandwiches in the afternoon; on average, it serves 200 customers daily.

Customer profile

In line with the survey conducted on the potential customers, our sandwich outlet has narrowed down to the following attributes that fit our customer profile: we will target the age group of between 20 years and 40 years. Many of our customers come from within the surrounding residents and their delight is to buy from the locality in order to enrich the local suppliers who are mostly farmers. Most of the customers live and work within the locality.

Our sandwiches and service

The price of our sandwiches is set in line with the local forces of demand and supply, considering the fact that the ingredients are available from the surrounding suppliers within the town. In addition to the sandwiches we will provide drinks. The breakfast sandwiches are intended to offer a wonderful dining experience to the intended customers. The price will be set at just $2.00 which is cheaper that what the competitors offer. We have local suppliers who will provide good quality bread to us.

The fillings used for the lunch sandwiches are chicken, beef, bacon, cheese and ham. Some of our specials for lunch sandwiches are smoked ham with garlic mayonnaise, smoked bacon with garlic mayonnaise. The price of our lunch sandwiches is valued at $2.50 each.

Marketing and promotion

Before the launch of our sandwich outlet, we intend to carry out a marketing campaign whereby we will officially announce the launch of the sandwich outlet and we will emphasize how different it is from other outlets in the locality. We will also inform the potential customers on our unique identity that makes us differ from the other sandwich outlets. We will work aggressively in the first three months in order to maintain our profile. We will also use posters to advertise the official opening date and also carry out a tasting session on the due date. Our marketing and sales campaigns will be aimed at capturing the attention of the competitors customers so that we can bring them on board.

Main competitors

There exist three other sandwich outlets along the street on which we want to establish our outlet. The three have been in the business for quite some time with Tramezzino being the oldest. The sandwich deli was established before Just sandwiches. The three outlets are considered to be our healthiest competitors. They have an advantage over us because we are just a new outlet and they have all the customers who we wish to have. Also, they offer good sandwiches, which we intend to improve on. The competitors also have weaknesses, including: poor choice of bread portions, The sandwich deli is not always opened in the morning, and also their primary focus is not just the production of sandwiches. Our main focus is to take advantage of their weaknesses and convert them to our strengths and also improves on their key strengths, thus, making us unique in the process.

Our suppliers

We did a market survey with an aim of understanding the surrounding local farmers who will be our potential suppliers. We were interested to know their terms in terms of prices, supply standards and their terms of credit. We met with each potential supplier one at a time. We intended to understand more about their offers and conditions for payment, and of course, we would choose what works best for us for the interest of our business. Our aim was to identify our sources for bread, meat, sandwich fillings, and vegetable. Also, we interviewed some of the customers of the suppliers in order to confirm and double check the quality of the suppliers produce. All our suppliers will be from the surrounding residents and they have fresh produce. They produce high quality bacon and corn-fed chicken.

Our fresh fruits and vegetables will be sourced from Daves Veg, which produces high quality vegetables. The supplier is also based within the locality. All our bread will be sourced from Bread Fresco, who has agreed for a payment period of 1 month. They boast of being the number one supplier of bread in the town, which everyone really enjoys.

Financial Projections

Sales prediction

Our sales target every month is to sell ten sandwiches for breakfast daily and also fifty lunch sandwiches daily. Our business is expected to grow by at least 5% every month; meaning that by the third year, our sales target will change to sixty sandwiches for breakfast and two hundred and eighty sandwiches for lunch. In line with the sale of sandwiches, we will ensure that at least 75% of the customers buy coffee or a soft drink.

Direct costs

These are the continuing costs that we are likely to incur in our daily production of our products. The direct costs include the amount of money we will spend daily to source or our ingredients for the production of our sandwiches and coffee.

Overheads

These are the costs we intend to incur in the daily business operations. These costs cannot be avoided, and the business can come to a stop if we cease to pay them.

Fixed assets

Our fixed assets will just be the items needed for production and display, for instance: coffee maker, fridges and cookers.

Investments

Out of the $15,000 required to start up the business, I have personally raised $5,000. The total monthly expenses will be $1,500. Every month I will pull $1,800 for my upkeep so the business also moves on. I am searching for an additional investment of $10,000. I am talking to banks and other potential bodies. The projected cash flow, balance sheet and profit and loss account are attached in the appendices.

Conclusion

Sanford Sandwich Company is a newly formed business that deals with the production of the finest sandwiches manufactured with natural ingredients and the best bread. I hope to establish a dependable big following by providing tasty and fresh sandwiches produced from local ingredients available. The ingredients will be supplied by the local providers. By the end of the first year of business, our profit target is set to be $20,500. The projections for the expected profits of the second and the third year are $71,100 and $159,700 respectively. All of this will be realized from a starting investment of $15,000. Our current investment is $5,000, against the total required investment of $15,000; this means that there is a deficit of $10,000 that we still need to accomplish our mission.

Profit maximization is the best gift a business can give to its shareholders. The business achieves this by keeping the marginal cost at the same level as the marginal revenue. The arrangement of the market in which the business operates will influence the decision of the firm to maintain its output to a certain level. The concepts of managerial economics can be narrowed down to the theory of the firm which recognizes the fact that profit maximization is the main objective of a business.

The owner of the firm is recognized to be the key decision maker in the firm, and the most important thing for the owner is value  to create wealth. This can only be achieved by making profits. Economics necessitates the use of limited factors of production to produce goods and services while keeping the costs at a minimum. Using the principles of cost analysis, businesses can adopt this strategy of production and make the best use of scarce resources to achieve a desirable end.

The organization of the market in which the business functions will affect the decision of the firm to maintain its output to a certain level. Non-profit institutions like schools, colleges, community museums, and cooperatives also use the theoretical concepts of economics and strategy in order to make decisions. These decisions help the business to achieve the economic goals efficiently. The concepts of economics are very influential in making relevant optimal business decisions. These economic decisions can be used to predict the outcomes of the business. For instance, an economic decision to use an optimal amount of resources in the production of a certain good will make it possible to predict the economic consequences of the decision in relation to the competition from other businesses in the same line of production.

References

Cushing, K. (2005). Neros welcome. Hotels And Restaurants, 1(1), 62-63. Web.

Gallaugher, J., & Ransbotham, S. (2010). Social media and customer dialogue management at Starbucks. MIS Quarterly Executive, 9(4), 197-212. Web.

Kumar, S. (2005). Branded coffee shops are filtering out the independent operators. Hotels And Restaurants, 194( 4365), 12-13. Web.

Mortimer, R. (2011). Costa coffee comes with shot of customer insight. Marketing Week, 34(40), 18-23.Web.

Appendices

Appendix 1

Appendix 2

Appendix 3

Executive Summary

Cancer is one of the deadliest diseases in the world. It has a very high mortality rate; over 7 million people die from cancer every year (WHO). The only treatment for cancer is chemotherapy, but it is a dangerous process that has a low success rate in the later stages of the disease. Drugs and medicines available to the general population are expensive and inefficient (Masters et al. 793). However, Herbal LCC has made a breakthrough discovery with its latest product, which has proved to cure liver cancer in laboratory mice. This provides a great financial and humanitarian opportunity to build a business that would deliver the worlds first cure for organ-based cancer. The purpose of this business plan is to acquaint all potential investors with Herbal LCCs plan for going global, including marketing, managerial, and financial strategies. The product is expected to have a 100% profit margin, with total estimated sales of 2 billion AED. The project requires an angel investment of 3,000,000 AED in order to conduct clinical trials, pass regulation barriers, and launch an effective marketing campaign.

Introduction

Cancer is one of the top causes of death in the world, on the same level as strokes, respiratory diseases, and ischemic heart diseases. In 2012, over 8 million people died of cancer (WHO). While there is no cure in the later stages of the disease, chemotherapy is one of the few reliable ways of treating cancer in an early stage. That procedure, however, is highly invasive and causes irreversible damage to the body, effectively shortening a persons lifespan by five to ten years (Masters et al. 794). Desperate people across the world spend their money on frauds and charlatans who offer fake promises of salvation but fail to deliver. Still, there is a cure.

Two years ago, research conducted by a small company run by Majid discovered that one of his painkillers cured 75% of lab rats affected with liver cancer. The product, Herbal, is a remedy based on natural ingredients and medicines. The product has passed initial trials on animals, achieving a 100% treatment success rate after being refined to treat cancer. A second stage of trials is planned. Herbal needs investors willing to offer support for the project and give a chance to millions of people around the world.

Approximately 3 million AED will be required to test and refine the product, pass through all the necessary regulatory procedures, and prepare a marketing campaign. Estimated benefits from this product are considerable, both in terms of money and in lives saved. The purpose of this business plan is to present the prospective cure to all and any potential investors who would be interested in becoming the first to promote a life-changing and profitable medical product that has no substitutes anywhere in the world.

Business Description

General Description

As the name of the company suggests, Herbal produces medicines based on natural ingredients and herbs. It has the facilities to test and manufacture its products, and both processes are certified according to the relevant UAE laws and regulations for medical businesses. It is a relatively small enterprise that evolved from a family business. Its current roster, including the board of directors, the laboratory team, and the employees in the production line total 100 people.

Industry Background

Despite its modest size, the company has been a long-time participant in the medical market. Previously, the firm belonged to Majids father, who started the business. The company is known for producing herb-based analgesic medicines, such as Herbal, which was intended to become the companys new product line before its capabilities for curing cancer were discovered. The UAEs pharmaceutical sector is the strongest in the region, meaning that to survive for so long, Herbal had to show a certain degree of innovation, resilience, and business acumen.

Goals and Potential of the Plan

The purpose of this business plan is to attract potential investors to fund the company and help it develop this product that could cure cancer. The products potential is considerable as it would provide relief and salvation to millions of people suffering from an otherwise incurable disease.

Uniqueness of the Opportunity

Although there have been plenty of attempts to cure cancer, Herbal is the first product of its kind to show high rates of success. It has the potential of opening a new niche in the medical market and could completely monopolize sales until competitors could devise products with similar capabilities and in the same price range. Until that time, Herbal will be the only company in the world to provide cancer treatment that does not involve long and unhealthy sessions of chemotherapy.

Statement of Resilience

The resilience of a company is defined by its ability to plan for, recover from, and successfully adapt to various challenges in business (McKeever 34). Herbals resilience has been proven by its survival in a very competitive industry, both domestically and abroad. As it stands, our company is about to make a major breakthrough in the industry and will become a key player in the development and production of a medicinal cure for cancer. Our estimated key performance measures for profit margins are 100%.

Other KPI data:

• Estimated sales: 2 billion AED.
• Number of patients expected to receive treatment in the first year: 100,000.
• Number of full-time employees: 100.
• Income taxes to % of sales: 7.9%.
• Net assets: 20 million AED.
• Net debt: 6.7 million AED.

SWOT Analysis:

• Strengths: Revolutionary new product, potential for Blue Ocean Strategy.
• Weaknesses: Costs associated with research, potential for non-delivery.
• Opportunities: Creation of a new niche in oncological market.
• Threats: Potential competitors may analyze our product and develop similar medicines.

Marketing

Target Market

The target population for Herbal would be patients diagnosed with liver cancer in the beginning and advanced stages. Potential target populations, depending on the results of tests, would include other forms of cancer as well. Our products target market is not limited to one or several countries, as we are planning to ship our product worldwide, wherever it may be needed.

Market Size

According to the World Health Organization (2017), more than 9% of the worlds population has cancer, meaning that the need for our product is sizable. That population keeps growing, as over 12 million new cases of cancer are diagnosed every year (WHO). Since the companys goal is to go global, we will aim to address the majority of the target population.

Competitive Analysis

The National Cancer Institute (NCI) has identified over 200 drugs that are currently used for cancer treatment (Masters et al. 797). The majority of these drugs, however, are considered second-line treatment for patients with advanced stages of cancer. Their effectiveness varies, but none could substitute for chemotherapy. Neither have the currently available drugs, whether alone or in combination, managed to achieve success rates above 30% (Masters et al. 798). This percentage falls even lower as the disease progresses. In addition, the majority of these drugs are expensive, making them unavailable for a good portion of the target population.

Estimated Market Share

The estimated market share for the first year is 20%. This number is driven by the fact that during the first year, our product will need to be tested and advertised. Patients and medical workers alike would be presented with the opportunity, and its effectiveness would need to be shown in practice. After the initial year, the market share is estimated to grow to at least 70% in three years. Once our competitors eventually provide alternatives to Herbal within a competitive price range, the market share is expected to drop to 5060% and remain there due to our brand name becoming known as the progenitor of the original cure for cancer.

Operations

Location of Business

Our company is located in Abu Dhabi, UAE, a large city with a developed infrastructure. It also serves as one of the countrys major commercial centers. The city is home to numerous pharmaceutical and supporting industries, medical centers, and other related facilities.

Advantages of Location

Abu Dhabi is a major transportation hub, which will be beneficial once our company goes global. In addition, the UAE has established a variety of policies that promote business and entrepreneurship; thus, expanding the enterprise and going global would be met with fewer legal and logistical barriers than in any other location. In addition, the UAE practices high standards for quality education, meaning that it would be possible to find qualified personnel without having to invite specialists from other cities and countries.

Zoning Issues

Herbal has existed in a single location for several decades and has integrated itself into the citys structure. It has been placed according to the local zoning laws and ordinances, and no zoning issues are expected. In the event of an expansion, several structures might be purchased that lend themselves to remaining in the same business zone.

Tax Implications

As it stands, Herbal is operating as an LLC, which helps avoid double taxation of the companys profits under the terms of pass-through taxation, which is common for the majority of countries operating under the rules and regulations of OECD. LLC structure protects the companys assets and property, meaning that in a worst-case scenario, Herbal will not lose its means of production. This is akin to the corporate structure but has more flexibility, and tax processes are simpler and more straightforward (McKeever 112).

Transportation and Logistical Analysis

Abu Dhabi is a city with a well-developed transportation and logistics network. In addition, it has a large and well-developed health-care industry. The company imports various herbs and other medical ingredients from the countries of origin for the plants, but most of the medical equipment is acquired domestically. Transportation and logistics for the business involve bringing equipment and materials to the company and delivering the product to customers worldwide, which can be done by land, sea, or air. Since Abu Dhabi is a major trade hub and port, there should not be any transportation or logistical barriers to our company.

Legislation/Compliance

In order to be able to produce and export our product worldwide, Herbal would be required to comply with both national and international laws and provisions related to manufacturing, import, distribution, marketing, prescribing, labeling, dispensing, and pricing of pharmaceutical products (MSH). Additional regulations that the company would need to comply with involve licensing, inspection, and control of the production facilities. Medical legislation is an expensive and cumbersome process as numerous regulations must be followed in order to meet the standards for efficacy, safety, and quality (MSH). While countries develop their national legislative requirements toward medical products on their own, the majority choose to comply with the international regulations established by the World Health Organization. As the UAE is one of the major producers in the pharmaceutical industry, there is little difference between its national legislation and international law. In the UAE, all medicine-related rules and procedures are supervised by the Ministry of Health (Ghazal et al. 69). As it stands, Herbal can be made to comply with these regulations as it is a medicine based on natural ingredients and substances, does not have any psychotropic or narcotic elements, and is produced and supervised by a company with an excellent history of legislative compliance.

Management

Key Management

Herbal LLC is an LLC, and as such, all key management decisions are made by the owner. At the same time, there are several key members who oversee the development and production processes. These members are:

• Laboratory manager  in charge of the drug development team and all lab-related operations.
• Logistics manager  organizes the transportation and delivery sequences for the company, ensuring that the company is always stocked with materials and resources. The manager also oversees the delivery of the product to the customers.
• Financial manager  oversees all financial matters in the enterprise. These include financial reports, accounting reports, tax reports, and any expenses necessary for the continuation of the enterprise.
• Production manager  oversees production processes.

Legal Structure

Herbal is a Limited Liability Company (LLC), a corporate structure where the members of the company cannot be held responsible for the companys debts or misdeeds. It is a hybrid legal entity that shares similar characteristics with a corporation and a privately-owned company. In the future, Herbal has the possibility of becoming a corporation in order to include more shareholders in its shareholder pool (McKeever, 74).

Board of Directors

Herbal does not have a board of directors as of yet since it is an LLC operating under a sole proprietorship. However, it has the possibility of becoming a member-managed LLC, with partners and investors being offered a percentage of the companys profits in return for investments that support the project. The members of a board of directors take part in all major decisions, such as company mergers, while department managers ensure the smooth functioning of their respective departments.

Financials

As it stands, Herbal LLC requires 3 million AED for additional trials, regulatory approvals, and a marketing campaign. The budget will be allocated as follows:

Critical Risk Analysis

Potential Problems and Mitigation Strategies

Several critical risks to the enterprise include the rejection of the product by the market due to inefficiency, the appearance of a superior product within our price range, and force majeure events that could potentially lead to the discontinuation of business. There are several strategies that could mitigate these potential risks. The potential inefficiency of the product can be avoided by conducting thorough tests in order to ensure quality. The appearance of a superior product could be foreseen through market analysis, and the effects could be mitigated by improving our own product or lowering the price to make it more affordable to a larger audience. Lastly, the majority of force majeure events can be prevented through having contingency plans and adequate plant process-planning (McKeever 175).

Environmental Risks

Potential environmental risks to the enterprise include fire and flood. The possibility of fire is higher than that of a flood due to the enterprise being located in a country with an arid climate, a good distance away from the shoreline. The presence of fire-extinguishing systems will ensure that any damage caused by a sudden conflagration can be quickly isolated and kept to a minimum.

Alternative Plans

In the event that the product does not deliver the intended results as a cancer cure, it can be returned to its original design as an effective pain-killing medicine with additional anti-cancer properties. This approach could still earn it a niche market in the oncological industry.

Exit Strategy

Considering the expected rate of company growth, an IPO exit strategy would be optimal for Herbal LCC. This strategy suggests offering a portion of the company to the public market in order to ensure business continuity and with the intent of paying off investors who wish to exit the business. This model will be even more effective with Herbal shifting from an LCC to a corporation. As the company grows, the extra assets acquired from the expansions will become available to be sold on the public market, attracting more investors and shareholders in the process (Hsu 620). Investors who wish to withdraw their investments would be able to do so after the company assets are offered to the market within a one-month timeframe. In the event of Majids death, the ownership of the company passes to the next of kin.

Project Timeline

• Acquire approval from Ministry of Health and perform drug tests involving human volunteers diagnosed with cancer  4 months. This is one of the lengthiest parts of the project, as getting solid results in human participants requires time.
• Data processing and drug effectiveness analysis  1 month.
• Acquiring all necessary permissions and complying with drug registry regulations  1 month. At the same time, the company would be able to submit its documents to acquire permissions to export its product to other countries.
• Launching marketing campaign across the UAE  1 month. Since the UAE is the companys home country, it is logical that before going global, Herbal must acquire a local market.
• Launching drug production and distribution across the UAE  1 month.
• Launching marketing campaign in other countries of the world  3 months.
• Expanding to global markets  2 months.
• Estimated time for going global  1 year.

Works Cited

Ghazal, Rana Mohammed et al. Barriers to the implementation of Pharmaceutical Care into the UAE Community Pharmacies. IOSR Journal of Pharmacy, vol. 4, no. 5, 2014, pp. 68-74.

Hsu, Dan et al. Entrepreneurial Exit Intentions and the Business-Family Interface. Journal of Business Venturing, vol. 31, no. 6, 2016, pp. 613-627.

Masters, Gregory et al. Clinical Cancer Advances 2015: Annual Report on Progress against Cancer From the American Society of Clinical Oncology. Journal of Clinical Oncology, vol. 33, no. 7, 2015, pp. 786-809.

McKeever, Mike. How to Write a Good Business Plan. 13th ed., Nolo, 2017.

MSH. Pharmaceutical Legislation and Regulation. 2012, Web.

WHO. Cancer. World Health Organization.

Abstract

Experts and discipline intelligentsias continue to fill this field with views and ideologies some garnered from experience or newly developed or old recycled models. Unfortunately, no matter how well drafted the desired course in company operations is, it is subject to the business environment. The type of market, economic system and industry in which a firm plies, all play a crucial role in the formulation of a strategic plan. However, due to the high cost involved in formulation and implementation of strategic plans, it is becoming more necessary in the practical field to restrict planning in the short run due to the high rate of change in the business environment that necessitates constant change in plans.

Introduction

Strategic planning is a business concept and term that enjoys wide coverage and little understanding (Romwell 2004. He says that strategic planning is a continuous process that starts with the initial strategic business plan and goes on as long as the business is present. On the other hand he says that a strategic plan will only work if there is strategic management in the business. Macharais differentiates strategic management and strategic planning by saying that strategic planning is the foundation of strategic management. How is this? According to the Merriman-Websters online dictionary planning is a proposed or intended course of action, or a formulated scheme setting out stages of procedure. The oxford dictionary offers a relatively similar definition as formulated or organized method by which a thing is to be done. Strategy is on the other hand defined as the art and science of devising and employing plans to achieve goals and objectives.

Therefore, strategic planning is simply the art and science of using a proposed or intended course of action in a procedural manner to achieve defined goals and objectives. When the objectives are to be achieved in a period of usually less than five years, they area termed as short term while if they are set at more than five years, they are labeled as long term. Johnson & Scholes (2002) draw us to the importance of a strategic plan in business by saying that it is the heart and soul of any scheme, actions and moves in the marketplace that managers should take in order to improve the business financial performance, strengthen its long term competitive position, and gain a competitive edge over rivals. This can be thus doe in the long run or the short run though modern business academics and experts are challenging the applicability of long term strategic planning.

The declaration by Tom Peters that long term strategic planning is not realistic in the modern business environment contrasts a long held view that strategic planning and in this case for long term goals is the key to business success. Failure to plan according to de Gues (2002) is planning to fail. But does Tom Peters assertion that long term strategic planning in business in modern times only exists in theory hold? A closer look at the essentials of long term strategic planning and the modern business environments holds the key to this answer. Grant (2005, pg 18) says that the evolution of business strategy has been driven more by the practical needs of business than by the development of theory. As such, this paper will set to prove that long range strategic planning only remain in theory and its not suited in the modern contemporary business management.

Long Term Planning in Business

According to Stefano, (2006) long term planning in business is one of the most challenging responsibilities faced by the modern business executives. She says that the main obscurity amid this ideology in business planning is the attempt to foresee and predict market and industry trends that will take place several years to come. This is contrary to what Johnson & Scholes (2002) say of strategic planning as a continuous process. In their assertion of this, the authors say that changing market conditions and forces manipulate companies in making their decisions in order to remain relevant in business and so as to stand against competition in the market place. Selson (n.d.) advices that a strategic plan has to be kept up to date reflecting changes in the PEST analysis and taking into account competitors strategies and tactics as they become known.

A strategic plan therefore has to be updated in order to comply with changing market environment. But how does the business environment impact a company? Johnson & Scholes (2002) say there are two ways of looking at the environment and deducing how much influence the aspect ha on the companys strategy. He divides business environment as internal and external while Selson (n.d.) categorizes the business environment into two broad groups as industry and remote environment though the difference is only in vocabulary.

Strategic planning and External Business Environment

Having an ample knowledge of both the internal and external environment surrounding a business does not only equip an entrepreneur with adequate strategies to propel his/her business forward but it also enables him to operate even in the most competitive environment thus gaining a competitive advantage which makes the business successful (Worthington, & Britton, 2003).

The external environment of a business or company is basically determined by the type of industry in which the business operates in though there are major elements that cut across all businesses and industries. They all play a crucial role in determining how relevant a strategic plan is as they keep on changing. According to Macharsi they will mostly have a general impact on the strategic business plan through actual planning, organizing, power, staffing and rewarding of employees and other stakeholders. Ronnma says that in most cases changes in the external environment will either present new opportunities for the business to explore or new challenges for the company to cope with.

Elements of the External Business Environment

Government Regulation and policy

The government influences the type of decision made by the company through three main channels as listed by Brooks & Weatherston (1994):

• Traditional Industry Regulation: Different governments have established different regulatory bodies and authorities to oversee the smooth and fair running of certain industries. In the UK for example the Ofcom is responsible for overseeing media content from the press, media houses and from marketers.
• New Regulation: Creation of new policies by the government through respective government legislative bodies may create new regulatory bodies to oversee the implementation of such findings of the new regulation. One of the best examples is the creation of bodies to oversee new environmental; requirement regulating the amount of for instance emissions a company can release into the environment. In the Us such bodies are CPSC, OSHA, EEOC
• Markets and Competition  Anti-Trust: Increased competition a many players enter the market has called for regulation to ensure fair competition. The establishment of bodies to oversee such is made at national, international and regional levels such as the EU.

Energy and the Physical Environment

In the era of going green many businesses are finding it hard to comply with new regulations. In the short run many of the environmental oriented regulations are hard to comply with as they demand a change in business processes and are expensive to implement. On the other hand Readings (2004) notes that a good environmental policy ensures a good corporate image and cultivates customer loyalty.

Labor and Human Resources

Labor Movement

Collective bargaining in labor poses a serious threat to company executives and many CEOs secretly despise them (Readings, 2004). They are responsible for lobbying for increased wages and better working conditions which are costly to implement and their timing might be not complementary with the companys planning.

Diversity

This is most relevant in cases where previously domestic companies decide to go international and are faced with a diverse workforce throwing an imbalance to the organizational culture of the company.

Immigration Policy

National or regional governments affects long range planning for companies through formulation of polices guiding on labor movement.

Technology

Research and development, technology, information, technological alteration and competitiveness, civilization and ethics in technology, technology indicators and labour all impact on the companys decision in planning. For instance some technologies have eliminated manual labor in labor intensive industries thus an imbalance in the companys long term strategy.

Welfare and the Provision of Public Services

• Public Service Provision  Roads, Sewer, Water, etc..
• Welfare  Welfare Reform
• Social Security

Economic trends

Inflation, unemployment, fiscal and monetary policy, currency, the GDP and other macro-economic factors affect a companys long term strategic planning in their own way.

Regional and national politics

Political instability is the most significant factor in this category. National and regional wars interrupt with the normal function of businesses whereby businesses have no active role to play in ending the interruption. Political or economic association of a country limits or broadens the market of a company. For example a country may impose a trading barrier with another country thus denying an international company part of its market share.

International Events

Global developments such as globalization determine how companies carry pout their strategic planning both in the long term and in the short term. Global economic cycles such as petroleum and energy crises impact on strategic planning.

A number of business management tools have been drafted to help managers and firms identify and address some of the above issues in their environment. Common tools are PEST, SWOT, STEEP, SWOTT etc. their aim is to help managers identify specific areas of the environment relevant to their operation and formulation of strategy.

Economic systems

There are three major economic systems as identified by Kew and Stredwick (2006) that have varying influences on businesses in strategic planning. These are command economy, market economy and mixed economy.

Command economy

According to Ericsson (2005) A command economy is one in which the coordination of economic activity, so essential to the viability and functioning of a complex social economy, is undertaken through administrative means -commands, directives, targets and regulations- rather than by a market mechanism.

Command economies are usually created according to Ericsson (2005) to achieve certain objectives such as maximum resource mobilization, not necessarily in an economically effective way towards imperative and over-riding national objectives dictated by the administration in power, revolutions based on the socio-economic system in a collectivist direction founded on ideological tenets and power-political imperatives (e.g. communism, socialism, Marxism etc), or to simply exercise price controls in the market. In such a market therefore, flexibility of a company in making long term strategic planning and decisions is compromised.

Market economy

This is the most conducive economic system for business performance according to Kew and Stredwick (2005). The authors says that in this type of economy there are no central planners and that producers and consumers in their millions make the planning through their individual decisions by creating demand and supply and hence the law of demand and supply remains as the central policy.

Mixed economy

This is the most popular and common system. While many economies profess to be market systems, they contain one or more aspects of a command economy hence earning the name of mixed economy. Simply put, a mixed economy contains the elements of a market and command economy. While the law of demand applies in majority of the markets, a command economy is manifested through:

• Legal frameworks such as contract law, company law etc.
• Government ownership of strategic companies such as the BBC by the UK government and Amtrak by the US federal government.
• State regulation on economic activity through fiscal and monetary polices.
• Taxation and other forms of levies used in redistribution of income.
• Provision of free social amenities by the government such as education, healthcare, social benefits schemes etc.

Market structures

Kew and Stredwick (2005) propose market structures as determining factors in the formulation of long range strategic planning. There are three contemporary market structures as mentioned by the authors. These are:

• perfect competition
• monopolistic competition
• monopoly
• Oligopoly

Perfect competition

The perfect competition market is the best market to operate in and offers the most stability and life for long range business planning. This is because the market is governed by the law of demand and supply both in the product and money market. As such, it is most common in a market economy. The same way that a market economic system is rare in practical sense, the same way is this type of market. In such a market firms can easily plan in the long term to lower costs of production by influencing the cost of labor and other factors of production. However, this market structure is disadvantageous as severe competition will lead to the most minimal prices in factors of production and the most efficient and cheapest means of production. Failure to do this will keep many firms out of business as it would be hard to achieve 100% efficiency in the production to keep costs at the minimum (Kew & Stredwick, 2005). Therefore, in such a structure firms will make and develop their future strategies as guided by expected minimum prices of factors of productions. Again this structure wipes out the value of research and development as a source of competitive advantage for firms as it assumes perfect knowledge in the marketplace. Unfortunately, this market structure as said earlier only exists in theory and hence brings us back to what Tom Peters says that long range strategic planning is only applicable in theory. This is supported by the false assumptions of 100% efficiency in production and perfect knowledge in the market.

Monopolistic competition

Market structures earn their name in consideration of a single industry or type of products but not the whole market (Grant, 2005). Therefore, in the case of monopolistic competition, its existence in supported by product differentiation by firms. Competition arises from the fact that firms have some degree of flexibility in setting their prices as they deem it to correspond with level of quality expectation from the market and the target market perception i.e. either premium or economy. With such a slight level of power, firms are price makers in one way or another in their own right (Kew & Stredwick, 2005). As such they can carry out some short term strategies whose transformation into long term is not assured such as opting to be profit intensive by slightly increasing prices and accepting reduced sales. However, this is only possible where the firms products have a wide loyal following that is willing to pay for the higher price for a higher perceived quality. Kew and Stredwick (2005) reminds us that the difference in the product is not necessarily real but a perception by the market.

Monopoly

In a monopolistic market, a firm is assured of controlling the market fully except for the influence of the type of economic system in that market. In such a market, a firm owns the only means of production in that industry and there is no competition at all. However, competition is presented in form of substitutes. Kew and Stredwick (2005) give the example of the UKs post office monopolizing the mail delivery market. Unfortunately, it faces competition from other methods of communication that act as substitutes to mail such as calls fax, emails etc. in general monopolistic markets lead to inefficiency due to lack of competition and price controls. Due to the ability of firms in the monopoly market to control and fix prices, you find that they are more capable of making long term strategic planning in a free market as the level of interference from the government that would affect the market forces is very minimal.

Oligopoly

This is a market where there are few producers and many buyers. The UK government labels them as complex monopolies as the players may be between two to twelve. Activities of one firm are influenced by the activities of the others. As such their formulation of strategies is also dependent on the strategies used by the players in such a market. Grant (2005) says that oglipolistic markets are further complicated by the formation of cartels by the players in order to control the market as a single unit. In such a case, they tend to align their long range and short range strategic goals and objectives and hence the planning also. This is most apparent in the global petroleum market. OPEC members unanimously set their prices and structure production of oil in order to influence prices. Fortunately, differences in government policy have averted the creation of an effective cartel that would completely influence the market regardless of market forces. The failure by the members to create a fully efficient cartel allows for the market forces to play their role in setting the prices in the market. For instance, the recent oil crisis that saw very high prices was melt down by market forces in part as high prices had led to substitution of oil and hence a decline in demand.

Oligopolistic markets in the UK exist in the tobacco, motor vehicle and pharmaceutical industries among several other minor ones. The same way as in a monopoly, the dominance and power of firms in such markets is not a result of their strategic planning but because of their ability to maintain high barriers of market entry such as strong brand names, high cost of initial capital outlay or natural causes like in the case of oil (Brooks et al, 2004).

The relationship between such a market and the making of strategic plans is determined by the paths that the firms decide to take according to Kew and Stredwick (2005 pg 17). They outline possible relationships for firms in an oglipolistic market as: collusion, price wars and non price competition. In a collusion case, the firms form cartels as discussed earlier while in the case of price wars, players attempt to drive competition out of business through low pricing. On the other case of non price competition, war against competition is waged through fierce marketing, promotions, quality and product differentiation. It is collusion that the idea of long range planning remains most relevant.

The internal environment

Also refereed to as the microeconomic environment, it constitutes of several variables which Nieuwenhuizen, Bodenhorst and Rossouw (2008) identify as mission statement and goals and objectives of the firm, business functions (concept) and production factors. This identification by these authors appears to be shallow compared to what Worthington & Britton (2003) consider to constitute the business microenvironment. He says it constitutes the mission and vision statements, company values, organizational culture, management, core capabilities and competences and company resources. Core capabilities of a firm are considered to be critical pillars of strength for a firm that if well utilized offer the company sustainable competitive advantage.

Of all the elements of this environment, the management plays a crucial role as it directs all other elements in the internal and in one way or another also in the external environment. This is enabled though adoption of environment management models such as complexity and dynamism. The ability of the management to utilize such models determines how effective and how relevant the strategic plan is Nieuwenhuizen et al (2008). Gain the management guides and dictates the adoption of various management ideologies that impact on how the firm will interact and respond to its environment. Unfortunately, this does not determine the longevity of the resultant strategic plan.

Criticism of long range planning

Firms realize that a change in strategy is triggered by changing market conditions. Their ability to ensure a status quo if it favors them is an elusive goal and just a theory for many. Unfortunately, firms, according to Gallos & Heifetz (2004, pg 9) make the mistake of embracing obsolete and outdated strategic plans in fear of change and the cost of drafting and implementing a new strategic plan for the long term. One of the most frequent mistakes that over-managed and under-led corporations make is to embrace long-term planning for their lack of direction and inability to adapt to an increasingly competitive dynamic business environment (Gallos & Heifetz, 2004, pg 9). The authors note that successful corporations abhor long term planning as a contradiction of their terms. In the modern contemporary business environment, the unexpected is expected by the intelligent. And as such, they realize the cost and time wasted in making long-range plans that are bound to change with every -very frequent- unexpected change in the diverse business environment. Gallos and Heifetz (2004, pg 9) say that formulation of clear strategic plans, as a crucial element in business leadership and management, will guide the company in realizing its objectives and goals as expressed in the short term strategic plan and goes a long way in achieving the dream of the firm as expressed in the vision statement.

Conclusion

The shift in management from a science to an art has seen more belief and trust being bestowed on actual success in business than assumed success. As a result this may discredit some theoretical teachings in management. While Tom Peters basis his arguments about the failure of long term strategic planning from his business outfits, there might be an argument that it is his firms wrong strategic planning that he uses to judge a whole body of knowledge. On the other hand, other real companies have expressed the challenge posed by an ever changing business environment both in the industry and in the market. This is in support of Tom Peters views and therefore it is evident his observations are true.

References

Brooks, I., Weatherston, J. and Wilkinson, G (2004), The International Business Environment, (London, Prentice Hall).

Brooks, I. & Weatherston J., (1994), The Business Environment 2nd edition, (London, Prentice Hall).

Cook, C. (2007), Planning in contemporary organization, 2009. Web.

De Gues, A (2002), The Living Company: Habits for Survival in a Turbulent Business Environment (New York, Harvard Business School).

Ericsson R. (2005). Command economy. 2009. Web.

Gallos, J. & Heifetz, R. (2008), Business leadership (New York, Wiley & Sons).

Grant, R. (2005), Contemporary Strategy Analysis: Concepts, Techniques, Applications, (New York, Blackwell).

Johnson, G. & Scholes, K., (2002), Exploring Corporate Strategy 6th edition, (London, Prentice Hall).

Nieuwenhuizen, Bodenhorst and Rossouw (2008), Business Management: A Contemporary Approach, (New Jersey, Juta & Co.)

Reading, C. (2004), Strategic Business Planning: A Dynamic System for Improving Performance & Competitive Advantage, (London, Kogan Page).

Selson C. (n.d.) Long-term strategic planning. 2009. Web.

Stefano, P. (2006), Strategic planning. 2009. Web.

Worthington, I. & Britton, C (2003), The Business Environment 4th edition, (London, Prentice Hall).

Summary

Pamperzhou Day Spa is a newly opened spa service provider located in Freeway County, CA. The services it offers include the whole range of day spa experience including the seven ultra-chic, ultra-comfortable treatment rooms with the finest spa linens and equipment,.. massage in a variety of styles,.. facial and body treatments (WSJ, 2009), etc. The spa is located near the hair cutting and nail salons so that to ensure a comprehensive approach to treating the customers. These business plans reflect the developmental trends of Pamperzhou Day Spa, the financial performance of the spa, and project its strategy and developmental goals for the future.

Company Summary

Pamperzhou Day Spa is a Sole Proprietorship owned by Madame Pamperzhou (WTS, 2009). The company is located in a densely populated area where the daily traffic amounts to 64, 000 cars. The strategic goals of the company include the increase in sales rates and customer return rates by 90% for the next 6 months: Our mission is to run a profitable business by providing high-end therapeutic massage and aesthetician services in a caring, upscale, professional environment (WTS, 2009). Trying to achieve this mission, Pamperzhou Day Spa focuses on marketing, professionalism, and unique treatments as its basic values. The company offers a wide variety of services and employs only the best professionals in the area of spa business.

Financial Summary

The assets of Pamperzhou Day Spa include the equipment used for massage and other procedures. The company possesses massage table equipment for the sum of $3,795, aesthetician equipment for $2,800, decor and furnishings for $13,000, envision software & equipment amounting to $4,000, and signage and back bar supplies for the sum of $8,500 (WTS, 2009). Total start-up expenses of the company amounted to $80,450, while total assets currently equal $84,550 and total liabilities include $35,000.

Competition

The current state of the spa industry in the USA and Canada is rather favorable. There are over 12, 000 spas in these countries, among which every seven out of ten spas are day spas. The overall annual income of the spa industry amounts to $12 billion, while day spas bring $7 billion of income and display 25% of annual income growth. In Freeway County, CA, there are also several spas but none within the five-kilometer radius offers the same variety of services as Pamperzhou Day Spa does, which makes the competition in the area not fierce and almost absent. Therefore, the company focuses on the clients inhabiting the five-kilometer area of Culway Plaza, the very location of Pamperzhou Day Spa, and having average annual income levels of $25, 000 and more.

Business Strategy

The focus of the companys business strategy is agreed with its mission: Our strategy is to implement the most aggressive marketing and networking in the community  followed by the best services in the business (WTS, 2009). Pamperzhou Day Spa implements competitive prices for the services provided by professionals of the highest qualification possible. The marketing strategy is oriented on local advertising and seasonal promotion with great emphasis on mass media and online informational sources. The total sales for the past years, $823,685 in 2006 and $900,000 in 2008 allow the company to forecast the growth in sales for the next two years planning to have sales at the levels of $946,000 in 2009 and $982,000 in 2010.

Table 1. SWOT Analysis.

References

1. Business Academy. (2009). Day Spa Business Plan.
2. Marketing Teacher. (2009). SWOT Analysis.
3. WSJ. (2009). Pamperzhou Day Spa.

Executive Summary

Cleaning companies in the US have focused primarily on corporate services. For years, these services were required in firms as opposed to homes. However, with a significant number of people looking for more than one job to enable them to pay for their needs, the pressure to get help at home has mounted. There is a great necessity for residential cleaning services that are trustworthy, professional, and affordable for a significant percentage of the population. It is important to note that currently, companies that offer office cleaning also deal in residential services. However, due to the fact that the latter is not the core business of the companies, it is often neglected and expensive. This gap has not been filled and creates an opportunity for smaller companies to offer much-needed services.

Business Details

Smooth Residential Cleaning Services Limited is a new business that will offer home cleaning services to its clients. It is important to note that the idea of the business arises from the fact that a significant number of companies that offer similar services have focused more on corporate clients. Despite the fact that the companies do offer residential services, they are often expensive due to the mentioned fact. Smooth Residential Cleaning Services Limited incorporates technology and innovation into the process, making it start out from the crowd. The company will develop an application that allows clients to go through and choose the exact person they want cleaning their homes. The selection will be based on years of experience and also expertise. Some of the services that will be offered include laundry services, carpet cleaning and vacuuming, house cleaning, and general home cleaning, which entails all the mentioned services combined. The company will also provide maid services and even lawn mowing as value addition services.

Companys Mission and Vision

The company mission and vision are critical in determining the strategic direction the management wants to take.

Mission

Smooth Residential Cleaning Services Limited is keen on ensuring consumer satisfaction through the provision of quality and professional residential cleaning services offered in a timely manner.

Vision

To become the best, most professional, and most affordable residential cleaning service provider in the region.

Aims and Objectives

Below are aims and objectives that the management expects to achieve once the business is running:

• Ensure the company breaks even within the first year of operations.
• Provide frequent training and refresher courses to all staff to ensure they provide high-quality services as stipulated in the companys mission statement
• Ensure the company is profitable within the second year of operations.

Industry and Market Analysis

Competitor Analysis

There is high competition in the industry, which is heavily divided between companies that also offer corporate cleaning services. This makes penetration into the market challenging. However, there are gaps that can be identified among the biggest competitors that make the market entrance difficult but possible.

Competitor Strengths

One strength the competitors have is that they have been in the industry longer. It is important to note that the cleaning service is highly dependent on the trust that clients have in a company. This is due to two main reasons. The first is that homes are considered private spaces; therefore, welcoming strangers into such spaces might require some level of trust. Second, the homes have valuable items that have to be kept safe. It is common to find that numerous people who use cleaning services either use ones that have been in the industry for a significant amount of time and have excellent reviews or those that have been recommended by other third parties. A second strength is that they have more staff compared to a start-up. This makes work easier for the staff, therefore, increasing chances of excellence.

Competitor Weaknesses

One of the weaknesses of the competitors is that they have not incorporated technology and innovation into their processes. Despite the fact that all major competitors have a digital footprint, they have not managed to also include the various available innovations to help with their consumer journeys. Smooth Residential Cleaning Services Limited aims to take advantage of this weakness to penetrate the market. A second weakness of the competitors is that a significant number of them have fully focused on corporate cleaning services and, to some extent, neglected residential cleaning. One reason why this was profitable initially is the fact that more multinational companies required outsourced cleaning services while people did not fully appreciate having their homes cleaned. However, with more people being busy, a significant number even working two or more jobs, residential cleaning needs have been increasing.

Consumer and Value Proposition

The primary target market for the business is young families of people aged approximately 25 to 45 years. It is assumed that these families have both spouses working and need extra help maintaining their homes. Critically, all other persons, especially those above the age of 45, are considered secondary target audience. A second reason why the target audience has been identified is the fact that they are able to pay extra for the additional services they require. For example, they can afford maid services, which are more frequent compared to cleaning services, and lawn mowing. It is important to note that the house cleaning services are purely on a day-to-day basis. However, as mentioned, the company has value-addition services, such as lawn mowing and maid services, which will be included in monthly packages.

Value Proposition

Currently, it costs between $25 and $90 to get residential cleaning services. The exact amount depends on the neighborhood and size of the house. One of the factors that will be considered as value addition is the lower amount of money people will pay to get services from Smooth Residential Cleaning Services Limited. Second, the company will enhance its value proposition by creating monthly packages that include such services as maid facilities and lawn mowing alongside the primary cleaning work. There are significantly few cleaning companies that have such services included in their packages, making this the companys competitive edge. Further, the use of current technology and innovation can also be described as a value proposition. This is especially in line with the enhancing of consumer journeys by removing some of the current pain points.

Marketing Strategy

Ps of Marketing

Product

The primary service offered is residential cleaning. This service will be offered to individuals or families at a daily rate. However, as part of the value proposition, the company will also have monthly packages that will include maid services and lawn mowing. The stated categories will be mainly for families that need extra help with other chores in the house. It should be noted that the company will not offer any corporate services in an attempt to cut out a specific niche.

Price

The price of the services will vary depending on various factors such as the neighborhood and the size of the house. It is important to note that the range will be from $10 to $50 per hour. This is the daily rate for laundry cleaning, carpet cleaning, and general house cleaning. On the other hand, the monthly rate will range from $1000 to $3000 inclusive of maid services or lawn mowing services. Families that require both services will part with an average of $2000 per month.

Place

The business will be situated in New York City. However, the office space will not be within the central business district. This is due to the fact that the rent in this region is expensive and in an attempt to cut down costs, the management has to consider acquiring more affordable office space. It is important to note that clients do not have to go to the physical office in order to get services. The company will have an active website and, as mentioned earlier, a mobile application.

Promotion

The company will use both traditional and digital approaches to promote the business. Traditional promotion will entail television and radio spots with newspaper advertisements as well. Billboards will also be used to target the mass market. Nevertheless, digital advertising will be the main approach to promotion that will be used.

Growth and Expansion Potential

Currently, the company will operate primarily from one place. It is expected that the firm will be able to expand within two years with current projections. There are two main reasons for this assumption. The first is that the corporation is expected to start earning profit in the second year of operation. This means that the company will have enough money to expand only after the second year. It is critical that the management not take any loans for expansion until the money that was acquired for starting the corporation has either been finalized or are near completion. A full second year of profits will ensure this is possible. Second, fast expansion before fully understanding the business can be disastrous. It is expected that within two years, the management will have had ample time to market their brand and create a demand of the same within the target audience. This will make penetrating other regions that much easier.

Operations Plan

Suppliers

Smooth Residential Cleaning Services Limited will have several suppliers, including detergent and machine contractors. These will be the main dealers of the firm as their equipment and products are used daily. It is essential that the company work with the suppliers that are not only reliable but also offer quality products and services. Critically, the detergents that will be used by the company are environmentally friendly. There are two elements that have to be considered when thinking about the environment and the soaps that will be used. The first is the process in which the detergents are made. Suppliers will have to agree to use methods that do not lead to degradation of the environment to manufacture detergents. This is critical as it synchronizes well with the values that the company holds. Second, the firm itself will train the staff to ensure that they protect the environment even as they use these detergents. This means that both the cleaning processes and the disposal methods have to be environmentally friendly.

Resources

The physical store will be one of the resources that the company will have. It is expected that the store will not only be at a valuable spot in regards to real estate but will also be affordable. Further, a critical resource for the business will be the staff. There are two main elements that will make the workers more appreciated. The first is that all identified employees will be qualified for their jobs. Second, they will be trained on a frequent basis on how to enhance quality and also enhance consumer experiences. It is important to note that the staff will be the direct link between the clients and the company; therefore, they have to act as ambassadors of the firm (Mahroum & Al-Saleh, 2016). It is prudent to note that they are the most important resource the company will have. Other assets include equipment that will be bought.

Management Team

The management team will be made of the two founders of the company and four directors. The four directors will handle finance, operations, human resources, and marketing. Finance, human resources, and marketing are critical support services that have to be aligned to the core business of the company. Further, the company will also have a board that will guide the founders in order to make accountable, transparent, and profitable decisions. There will also be an external auditor who will be contracted quarterly.

Staff Roles

The bulk percentage of the staff population will be cleaners. They will be hired on merit, with all being on a contractual full-time basis. It is important to note that there will be a gender balance in the staff population with both men and women. Critically, babysitters and maids will be engaged on a part-time basis due to the fact that these services are not core to the firm.

Feedback and Complaint Policy

The company will have comprehensive feedback and complaint policy. There are numerous companies that do not take feedback seriously. This is often not discouraged due to the fact that the clients often feel ignored when their views are not appreciated. The scholars explain that consumer feedback does not have to be incorporated fully but should be considered, especially in regards to enhancing consumer journeys.

Legal Form and Company Structure

Smooth Residential Cleaning Services Limited will employ the use of a legal form of a partnership trader. This ensures that all the organizational liabilities and responsibilities are determined by the two founders. Agreeably, start-ups are often encouraged to get a sole trader license. However, due to the magnitude of the business, a partnership is best suited for the company. The fact that the two founders share liability also makes it easier and more secure to get funding and loans for the business. The company will be considered a small to medium firm. Due to the strict nature of the hierarchical structure, the firm will have a flexible organizational structure that allows full interaction between all staff members. The process of decision-making will also be decentralized in order to reduce the amount of time needed for the same.

Finance

Costs

The company will need start-up capital of $30,000. The money will be used for attaining licenses, getting office space, creating a website and mobile application, and initial marketing. It is important to note that the office space will be leased per annum in order to save on costs. A significant amount of the proposed start-up capital will be taken as a loan from the bank. This will amount to $20,000. The rest of the money will be contributed by the two founding partners equally at $5000 each.

Financial Projections: Balance Sheet

Appendix 1 indicates the total assets and liabilities vis-à-vis the companys worth. It is important to note that the company will have more in terms of assets by the end of year two due to the offsetting of loans within the same year. Critically, the company will also grow its assets within the second year due to an expected increase in clients.

Risk

The main risk the company will face is high staff turnover. This is due to the fact that a significant number of the staff will use the opportunity as a stepping stone for their eventual careers. It is also expected that a significant percentage will be youth who will either be between jobs or in college continuing with their studies. One of the ways to mitigate the risk is to ensure the personnel is well compensated for their efforts. Additionally, as mentioned previously, the staff have to be well trained so that they provide quality work, which will lead to good feedback. Further, the risk can be mitigated by having a positive and enabling work environment that supports the goals of the staff.

Exit Strategy

Despite the fact that the management expects the business to perform well and to be profitable by year two, there is a possibility that this might not be the case. In the unfortunate instance that the company fails to record profit, the partnership will be abandoned. To recoup the money used and repay back the loan, the management will sell the company to a willing partner. If this is not tenable, the firm will sell all its assets in order to pay back the loan. It is important to note that there is also an exit strategy for the two founding partners. This will happen after the company has become profitable. A new CEO will be appointed, with the founding partners joining the board of directors. However, it is important to note that the founders will not have monotony of power due to the fact that this can lead to biasness, which can affect the companys bottom line.

Key Milestones

• The first key milestone is the running operation of the business, including setting up the office, launching the website and the mobile application
• The companys first client per every category of service offered will be perceived as the second milestone achieved.
• The third milestone will be breaking even, which is expected to happen by the end of year one.
• Last but not least, the fourth milestone will be the recording of profit by the end of year two.

Reference

Mahroum, S. & Al-Saleh, Y. (2016). Economic diversification policies in natural resource rich economies. Routledge.

Appendix

Table 1: Balance Sheet

Evaluation of marketing plan & operations strategy

Live-e-Care is a web based customer service supports venture that have planned to enter into a market of e-business by providing quality and cost-effective online customer management operation for various companies. According to the reports released by Boston Consulting group, the online sales have doubled the figures available in 1988 and is expected to reach 36 billion dollars in this year. Further, it is also reported that the total online customer sales services will be reaching 1 billion dollars within next 3 years.

In the business strategy revealed, the company promise to deliver highly personalized email and live text chat response at a much reduced cost and also as a replacement to the existing in-house function. As internet technologies has revolutionized the traditional forms of customer retention the company is confident to make big inroads into e-business segment. The impact of e-trading have been observed to increase through high growth anticipated in online retailing.

Their learning from the poor experiences of the retail market segment with the automated and quick reply systems for customer support, which unfortunately couldnt address the specific needs of the customers and extend the customer loyalty, would certainly help to pay better attention to their performance. They are very optimistic of this initiative and is very confident to turn successful by ensuring the consistent and timely delivery of high quality services, careful analysis of the trends in the transaction process, much reduced cost than the existing in-house operations and reduced implementation time for web-based solutions. Based on these observations, I am confident that live-e-care would be able to meet their promise of better personalized customer support services delivery and better value of value to their clients.

The market analysis undertaken is really extensive and has helped them to design appropriate strategies in this e-business initiative. Live-e-Care clearly understand the existing bottlenecks prevailing in the online operations. Most of the companies currently use auto reply softwares to handle the email enquires and large portion of which unfortunately never respond to the enquiry properly. Instances like ignoring email enquiry and large response time of more than 5 days are also prevailing currently in this field of operation.

Also, it is highlighted that 62 percent of customers currently give up the purchase due to the difficulty in accessing the site. Based on these inputs, Live-e-Care promises to help the clients understand their need by reaching them through feed back and comments. The company also provides a live chat service for their valued customers. Thus, an interactive, lively and friendly session for the customers would be created to become prospective future buyers.

The company intends to reach 95% of the customers in 24 hours or less. The company further expects to reach their web based clients through on line chat services as web based support is a fast growing medium. The companys target market clearly focuses on purely web based quality service at the minimal rate and stipulated time. For promoting Live-e-Care, the prospective customers would be reached through print and advertising media and also by conducting trade shows. In addition, creating an interactive website would also create a brand value about the company and its services.

The market for web based out-sourcing can be classified into web based out sourcing, customer service out sourcing and telecommunication services. The live-e-care company plan to focus its operation on web based customer service e-mail and the chat market. The major competitors for the company in this sector are internal marketing department of the clients and new emerging players. Other major groups currently operating in the online business segment are also identified. Brigade solutions which is the most important competitor of live-e-care provides web based support to IT companies.

People support based in Los Angeles also provide outsourced e-mail customer care to e-commerce companies. Live chat assistance, finale.com and e Assist. net are the three other major competitors which provide live chat support. These web chat providers demonstrate a single live demo with minimal wait time without revealing the clients personal data. But the live-e-care company focuses on quality customer care at a much lower cost. the company helps the clients in handling their online customer services for various function like sales support, identifying consumer trend and preferences.

From the above descriptions it is very clear that live-e-care has carefully analyzed the market and incorporated the customer behavior in their marketing plan. The firm have also clearly positioned as a online business organization like any other online business companies with clearly stated objectives and operational plans (n.d.). The live-e- care company plans to operate in Philippines where low cost under employment work force is available which would give them a distinct advantage over their US based competitors.

The main challenge lies in convincing the retailers especially the traditional businesses about the benefits and advantages of out sourcing their customer support. The target market of the company include the traditional brick-and- mortar companies having websites that receives a high volume of e-mail and insist on maintaining a strong relationship between the clients. Moat of these type of operators have very low email support, poor reply pattern and incapable to handle high volumes of email. The company focuses on mid sized clients and larger and more established clients. From these details the target markets are also properly delineated.

Regarding the operational plan, different divisions of total business organization has been explained well. This involves presenting the members of top management, details of other divisions like human resources, finance, marketing and sales etc. But a properly presented budget in support of the activities is the missing component. Absence of the budget and a proper flow diagram of sequence of events fails to give a true picture of the operations visualized by the company owners.

The plan presented by the company clearly shows that it capable to achieve desired objective. Being the beginner in this business segment the company enjoys the advantage of the market primer at the same time it must be capable to eliminate the future threats. As the business would expand other player would also be drawn into this sector and would create much stiff competition in the business. So the operational structure could be appropriately tailored to prevent any other entrant to win over Live e cares strategy of operation.

Analysis of financial strategy and final projections

The financial forecasts suggests that the revenue from online customer support would grow by nearly 200 percent across first three years. As the company is set to generate a new set of business operation, the figures presented are not very ambitious. The company expects a initial loss during the first year of operation and plans to recover steadily during the third year with increased revenue from the earnings.

The conversion of total of 23 percent of clients to the services offered by the live-e-care certainly requires a committed action from the marketing front. So the budget for the various operations during the first three years need to be elaborated more to give better clarity on fund management. From the available records and published results it is understood that only very low of business is being carried out online gives the existing dependence on internet techniques for business support activities. It is mentioned in the business plan that additional revenues from consulting and FAQ database management is not considered in income determination as they are the prime focus of the company at present and also they might not form a very significant volume of the revenue.

But as operating from Philipines, it would be worthwhile to explore all the possible earning in this domain with the skills available with the workforce. This would help the live-e-case to elevate its operations to total solutions provider in the domain of customer relations management. Also, as the break even period is expected during the third year of operation appropriate indices for reworking the strategies need to be created in the plan. But looking from the customer base, expecting a drastic shift in the operations of client management structure prevalent at each places to new method of out sourcing could take some time. The expectation from the return of equity across the three years as the envisaged growth of the business seems justifiable.

This would certainly help in pooling more funds for its future expansion plans. The assessment of the reduction of the operators expense across the initial years of operation is certainly coupled with possibility of future expansions. And the major operations are being carried out in Philippines, the impact of the local factors that could influence the operations there and might have an influence of the financial parameters need to be considered here.

Personal Opinion on Investing in Live  e- care

The live-e-care certainly presents a very interesting case for financial investment. Though being a start up company, the domain of operation of Live-e-care certainly holds much promise in future. Also, their approach to the business operation by properly creating s specific area of action clearly promises a good growth prospects in future. With companies trying to male their operations very lean and concentrating on core-competency in their respective functions the role of companies of this type would certainly become very important in future. With the initial plans to operate from a very comfortable offshore center certainly gives me more confidence in investment.

But absence of a proper risk management plan is a vital aspect missing in the business proposal. (Simmons & Burgess, 2000). Though the projections presented in the report are purely speculative with considerable change in the prevailing business pattern expected to emerge during the course of its growth a scenario analysis on the impact of any adverse situations is not provided. As a prospective investor I would appreciate if the we are convinced of the inherent strength of the organization to withstand the difficult times it might have to face. Even then, the ability of the organization to raise sufficient funds to meet the capital investments as well as the operational costs negates this concern.

Also with the current growth of internet and related technologies the operations would soon become not only more efficient but also inevitable in variety of business operations. The successful retention of most satisfied pool of customers being the basic secret of all successful ventures, the initiative to create long standing chain of loyal customers through various innovative strategies certainly sounds as a highly viable proposition. With, the high expectations on the return on the invested equity by the end of three years and further rise in ROE foreseen with the increase in revenue, I would certainly be interested for personal investments with live-e-Care.

References

Simmons., & Burgess, Lois. (2000). Internet commerce, security risk analysis and small to medium enterprises. Collector. Web.

Eporia: Site That Sells More. (n.d.). Web.

Gale, Detroit. (2008). Online customer service support. Business Plans Handbook, 10, 253-273.

Businesses are a cornerstone of localized communities in a challenging socio-economic situation. The restaurant business promotes regional employment development, benefits local farmers as their agricultural products are purchased, and retains customer money in the neighborhood. This is a business plan for a restaurant preparing and serving meals and beverages to clients. Although most meals are prepared and consumed in the establishment, this restaurant additionally provides take-out and food delivery. Furthermore, neighborhood restaurants aspire to assist clients in creating memories and forming reliable relationships with community members. The establishments name is Lake Side restaurant, and it will be situated in Washingtons Chelan County.

Companys Strengths and Weaknesses

Entrepreneurs must constantly scale out and assess their companys core strengths and shortcomings in comparison to rivals and customer requirements. That is the only approach for business owners to prepare their companies for long-term sustainability. The Lake Side restaurant will have several advantages since it will recruit trustworthy staff, including waiters, who will connect with clients and assist in building consumer allegiance. High priority will be placed on keeping the establishment well-organized and clean to attract the elite and middle class of the community. The restaurant will serve high-quality, one-of-a-kind cuisine with meal and beverage pairings. Furthermore, the selection will be reasonably and appropriately priced to preserve customers and avoid losing money. Despite the strengths, not every consumer feedback will be good, resulting in flaws. Some weaknesses will result from the high noise levels in the locality and overcrowding during peak hours due to the lack of outdoor seating making the establishment uncomfortable.

Opportunity Identification

Operating a restaurant business is a comprehensive endeavor that demands complete focus and attention to detail. Although it appears to be a fascinating undertaking to others, understanding to operate an eatery is a skill that cannot be learned in a few sessions. Local agricultural products continue to suffer as foodstuffs become shipped from foreign nations, and the American agricultural industry faces challenges. The Lake Side restaurant will take advantage of the chance to encourage area food agricultural output and assist farmers in selling their products. Since most people in Chelan County are unemployed, the restaurant has an opportunity to hire locals. Chelans local taxes are business-friendly, giving Lake Side a greater chance to grow and succeed.

Financial Resource Analysis

The financial assessment aims to discover whether or not an organization is worthwhile, solvent, efficient, or profitable enough to justify a fiscal venture. It evaluates market measures, puts together financial strategies, creates long-term firm objectives, and locates possible investing companies. The income statement will include sales from foodstuffs, beverages such as wine and beer, and additional operating income at the Lake Side restaurant. Sales from meals are expected to top the list with approximately one hundred and ninety thousand dollars within the first month. Sales from beverages will be around $20,000, making the overall amount from sales in the initial month $210,000. The cost of purchasing agricultural products, drinks, and bar consumables will be approximately $45,000, and the salaries for the staff and management accumulate to $48,000.

Potential Market Trends and Demand

Staying prepared for a changing market is essential for expanding a dining operation. There are several opportunities for restaurant players on the horizon; however, there are certain instances where creativity is required. Lake Side can position itself for development by considering alternate loan and funding options. Contactless technology and meal delivery services may remain significant initiatives in the long term, from gourmet dining to ready meals. Restaurants strive to enhance client interaction while keeping up with changing demands. Technology assists eatery operators in navigating worker scarcity. Diversifying income sources by shifting from main products and venturing out to new segments, such as retail, is significant for several restaurants.

Competitive Analysis

Many areas have a vast number of ventures, each of which is distinctive, and entrance and exit are uncomplicated. Similar restaurants, fast-food establishments, and the cafeteria and frozen-food sectors of local grocery stores are excellent options for each eatery. Since cuisine is the most incredibly potent resource, Lake Side will feature an adequately designed and displayed menu to beat the competition as it may raise a restaurants profitability by 15% (Lai et al. 207). Furthermore, the employees must be well-trained to provide outstanding service, including regular briefings with the workforce to reinforce the regulations. Lake Sides meals will be attractive, flavorful, and consistent to maintain the target customer return. Staying ahead of the rivals will help Lake Side restaurant to an upward demand curve resulting in increased profits.

Marketing Plan

In current times, eatery advertising has gotten significantly revolutionary. Persons in charge of dinner marketing and new revenue generation techniques experience challenging and fascinating situations. Individuals trying to satisfy their hunger now have a perplexing variety of options, and restaurants should compete for customer interest in ways other than location. Lake Side will create a diners brand recognition, reflecting the eaterys character, style of content, and the feelings it wants to evoke in its consumers. Additionally, the establishment will acquire a webpage with increased local identification to aid marketing. Another marketing strategy Lake Side will use is to create a mission statement that expresses the service providers purpose. The Lake Side mission statement will lead the dinners expansion and presents an optimal perspective for its progress. Workers are encouraged to consider how their activities may affect future restaurant performance and a healthy corporate culture by using mission statements.

Lake Side may obtain excellent outcomes by establishing an account and updating it regularly because of the enormous exposure of digital platforms like Facebook and Instagram. Uploading frequent photos of the weekly specialties and sustaining restaurant promotion will appeal to guests. Lake Side will also provide a routine happy hour or reductions on mid-week meals, which is an effective approach to attract new clients while captivating the regulars. The dinner will include coupons and other giveaways to entice new visitors and keep the regulars intrigued. Email promotion for eateries is still a potent tool, especially in the age of social media, and Lake Side will employ it in the marketing plan.

Staffing Analysis

Among the most critical administration roles is staffing, which is responsible for recruiting, hiring, training, encouraging, and keeping the most exemplary employees for the companys objectives. The personnel assessment will assist the Lake Side diner in addressing the problem of workforce replacement rate that plagues many organizations. The restaurant will prepare ahead of time for seasonal staff turnover so that recruitment and training can begin sooner. Furthermore, fostering a healthy business culture will reduce employee conflict, thus reducing staff resignation rates. Lake Side will prioritize staff morale to keep a committed and satisfied workforce. Workers will not be regarded as field laborers, but as internal clients, since happy personnel generates loyal consumers.

Lake Side will set strong workplace expectations for its employees since a high-standard environment attracts more experienced employees. Personnel will find a more innovative supporting system that encourages them to try to improve and succeed in their jobs constantly. Additionally, each Lake Side staff member will receive a professional card. Business cards are affordable, and this simple approach will elevate staff morale and increase work satisfaction. After six months of service with Lake Side Dinner, workers will be rewarded with a complimentary lunch for their families. In addition, after a shift, the worker may invite numerous acquaintances in for a half-price dinner. Lake Side will benefit from nutritionists with competence in advertising and public interactions. Professionals in consumer engagement management, for example, employ digital networking technologies and social influencing advertising techniques.

Impact of Economic Trends

An indication of a states or nations financial health is the economic trend. During the COVID-19 epidemic, the markets revenue stream was significantly impacted, impeding sales development in the United States. As businesses have closed, hundreds of people have lost their employment. Many countries gross domestic product (GDP) has been harmed as a result of disruptions in industry operations. The influence of COVID-19 on the American economy has prompted many restaurants, large or small, to modify their organizational practices. Small firms often experience harsh impacts since they lack a committed safety consultant (Dube et al. 1488). Without one, the proprietor or management is solely responsible for occupational security. Limited-service eatery revenues may grow during a recession because people choose comparatively affordable eating choices such as fast food. Due to higher menu costs, full-service restaurants earnings are more susceptible to suffering.

If the country undergoes an economic slump, restaurants should be prepared for the worst. During a recession, restaurants should implement effective measures that will keep the business more straightforward, stronger, and more economically secure in the long run. Lake Side will take the opportunity of the current economic situation and utilize its income to settle any huge debts it may have accumulated. A firm that enters a recession with lower business expenses is ahead of the situation. Diversifying the client base, particularly by attracting the younger demographic, will enable Lake Side to cope with difficult situations. Even when finances are scarce, millennials spend more cash on eating out than they save, which would be a complex pattern to change.

Selection of Type of Business Entity

The legal framework of the restaurant is an essential stage in bringing it up and operating. Lake Side will run its operations as a partnership. Any organizations activity progress relies on its capability to create partnerships. It is critical to find a suitable collaboration arrangement that satisfies both parties before Lake Side begins operating. Compared to running a limited company, the reduction of bureaucracy is one of the reasons for choosing the partnership formation. Participating in a business partnership instead of functioning as a lone owner provides emotional support and mutual encouragement. Significantly, every partner will add their expertise, talents, experience, and connections to the firm, perhaps giving it a higher opportunity to succeed than each of the participants operating alone.

Works Cited

Dube, Kaitano, et al. COVID-19 Cripples Global Restaurant and Hospitality Industry. Current Issues in Tourism, vol. 24, no. 11, 2021, pp. 1487-1490.

Lai, Hao, et al. Can Restaurant Revenue Management Work with Menu Analysis? Journal of Revenue and Pricing Management, vol. 18, 2019, pp. 204-212.