BUSINESS PLAN
Introductory letter 2
Executive Summary 2
STATEMENT OF OBJECTIVES 2
Mission Statement 2
Driving Force 3
Market Position 3
Streanthes and Weaknesses 3
Streanthes: 3
Weaknesses: 3
Opportunities and threats 3
External Opportunities: 3
External Threats 4
Key Factors For Success 4
Goals and Objectives 4
Strategy 4
BACKGROUND INFORMATION 5
TECHNICAL DESCRIPTION OF SERVICE 5
MARKET DATA 6
Target Market Information 7
Social Environment 7
Demographic 7
Culture 8
Political Environment 9
Economic Environment 9
Competitive Environment 10
Potential Problems 10
Market Data Summary 10
Target Clients 10
Target Market Size 10
MARKET STRATEGY 10
Product 10
Price 11
Place 11
Promotion 11
SELLING TACTICS 12
Cash and Accounts Receivables 12
Peak sales 12
OPERATIONS PLAN 12
FINANCIAL PLAN 13
Necessary Financing 13
Cash Budget 13
Balance Sheet 14
Income Statement 15
Ratio Analysis 16
Depreciation Estimation 17
Fixed Capital Estimation 17
Working Capital Estimation 18
Marketing Estimation 18
Rent Expense Estimation 19
MANAGEMENT PLAN 20
HUMAN RESOURCES PLAN 20
CONCLUSIONS 21
Introductory letter
This business plan was created to check the idea about the
effectiveness of the creation of the database that will help clients at
different shopping centers to find products more quickly. As a result, it
saves their time and money.
Executive Summary
The company name is Svetlana. The main idea of venture is the creation
of the database of products that will help potential clients to find what
are necessary for them.
The mission of it is to be the best consultants of defining the
nonfood product location at the Irkutsk markets, to take care of our
clients by saving their time and money, when they do shopping, to offer the
best service by using modern computer technology and polite and affable
consultants
The market of such informational service is quite big and has a lot of
opportunities for development. In addition, Svetlana can use the greatest
of them because there are no competitors at the market. It offer product
that satisfy most of this market demand, as the product contain all main
information potential clients want to get to find a product. The sales
policy is build on the statement that clients lose nothing, but only save
their time and money.
After the third year of existence, Svetlana reach the after-tax profit
level of $3 510 and will have ROE 35%.
The structure of the company is simple as it is quite small, and it is
ineffective to use complex system of the distribution of functions.
So, as a result of market opportunities, Svetlana have a lot of
chances for succeed.
STATEMENT OF OBJECTIVES
Mission Statement
We will be the best consultants of defining the nonfood product
location at the Irkutsk markets. We will take care of our clients by saving
their time and money, when they do shopping. By using the best computer
technology and polite and affable consultants, we will offer the best
service our clients can get.
We will create a positive working environment for our employees that
will promote satisfaction and personal growth.
Driving Force
* Our company will offer service that does not exist yet at Irkutsk. It
will create very good advantage for our development.
* We will place the emphases on the Internet and telephone consultations.
* The business will be based on TQM.
Market Position
The main our clients are busy people who do not have time to go from
shop to shop and want to find product as quickly as possible. Such people
are the most likely users of our database.
Streanthes and Weaknesses
Streanthes:
* Low-cost equipment
* The absence of such database at all local product markets
* Skilled labor force
* Low operational cost
* Use of high technology
Weaknesses:
* The creation and updating of database may take a lot of time
* Poor marketing materials
* High taxes for this kind of service
Opportunities and threats
External Opportunities:
* Changes in tax structure
* The Increase of customer demand level
* The government policy for supporting the small business sector
External Threats
* Increased competition
* Economic downturn or recession
* The decrease of customer demand level
Key Factors For Success
* The absence of competitors
* Broad approach that is provided by the use of Internet and telephone
consultations
* Polite and affable personal
Goals and Objectives
* To create the consulting center that will cover all main nonfood markets
In Irkutsk
> The collection of information and the creation of the consulting
center in the «Irkutskiy« market
> The collection of information and the creation of the consulting
center in the «Fortuna« market
> The collection of information and the creation of the consulting
center in the «Complex« market
* To create the centralized informational system
> The development of database
> The installation of the server station and user machines
* To create web-site
> The market research of similar sites in Internet
> The creation of the site structure
> The creation of the site interface
Strategy
As our service is new in the Irkutsk market, our company plans to
follow the differentiation strategy. The determining factors will be
clients and development. Price will not take the first place. We plan the
step by step development at first in the «Irkutskiy« market, then in the
«Fortuma« market, and the last step is «Complex« market. In addition,
as our service is new, we plan to create loyalty of our customers until
direct competitors appear. The scope of development will be the Irkutsk
nonfood markets, which sell clothes, shoes, home appliances and other
similar things.
BACKGROUND INFORMATION
Irkutsk is the biggest city of eastern Siberia. It has a lot of
markets, but any of them does not have any consolidating data base that
help people to find goods that is necessary. So, this database of products
is a result of the demand of many people.
Such business is new for the Irkutsk market, so there are no examples
of development and existence of similar service, where we can get
information and some experience about our venture. The positive side of
such situation is that we will be the first, and, as a result we can get
the greatest benefits. The negative side is that we will have a lot of
unpredictable situations that may create big obstacles for good
development. Our informational service center can be classified as
informational business, which is in the beginning stage in Russia today. It
also creates some global opportunities and threats because during this
stage the most prosperous ventures appear, but also many businesses force
into insolvency.
So, current situation gives our venture a lot of opportunities for
good development.
TECHNICAL DESCRIPTION OF SERVICE
Our product is information. We plan to offer information about non-
food products such as clothes, shoes, bags, home appliances and car spare
parts for potential clients in the Irkutsk markets such as «Irkutskiy«,
«Fortuna«, and «Complex«.
Information about clothes and shoes will consist of the type of
clothes, a season, the country of origin, the company name, the year of
production, size, color, price range, and the location and number of the
pavilion or the section of a market.
Information about bags will consist of the type of bags, the company
name, the country of origin, the year of production, price range, and the
location and number of the pavilion or the section of a market.
Information about home appliances will consist of the type of a home
appliance, the company name, the year of production, size such as the
length of diagonal for TV, price range, and the location and number of the
pavilion or the section of a market.
Information about car spare parts will consist of the type of a spare
part, the company name, the type of a car and other spare parts, where this
spare part is used, the year of production, price range, and the location
and number of the pavilion or the section of a market.
The example of list:
|№|Typ|Name|Si|Season |Count|Year of|Color |Price |Location |
| |e | |ze| |ry of|product| |range | |
| | | | | |origi|ion | | | |
| | | | | |n | | | | |
| | | | | | | | | |Market |Pavelion|
|1|Jea|Anga|32|Summer/F|Russi|2001 |Red/Gre|$20—$3|“Irkuts|#1,#102,|
| |ns |ra | |all |a | |en/Blue|2 |kiy” |#176 |
| | | | | | | |/Black/| | | |
| | | | | | | |other | | | |
|2|Jea|Lee |32|Summer/F|China|2002 |All |$30—$6|“Irkuts|#17,#78 |
| |ns | | |all | | | |2 |kiy” | |
|3|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |
| | | |. | | | | | | | |
|4|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |
| | | |. | | | | | | | |
|5|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |
| | | |. | | | | | | | |
The Database will be created in the FoxPro 5.0. It will be adopted for
using through the local net and the Internet. The design of the Internet
site will be developed with the Microsoft FrontPage.
This database will be updated every second day. At first time it will
be done manually by surveying the owners of the pavilions or the sections
of a market, but then we plan to automate this process.
The information will be deliver to customers on printed lists, if they
get information directly in the market building from an operator. Next, it
will be delivered electronically, if customers get information by using the
Internet. Finally, it will be delivered by fax or orally, if customers get
information by phone.
MARKET DATA
To analyze and collect the market data I used as the statistical
sources, so and my own experience and knowledge.
Target Market Information
The shopping center “Irkutskiy” is the biggest nonfood market in
Irkutsk, in which everybody can buy everything, what is used in everyday
life, for example clothes, shoes, satchels, wallets, kitchen-ware and etc.
It unites three shopping centers and contains up to 500 small shops. The
shopping center “Irkutskiy” is the only big nonfood shopping center with
such range of goods in Irkutsk and, consequently, serves most of the
Irkutsk population. The shopping center «Fortuna« is the biggest car
spare part market. The “Complex” is also a big nonfood market, but it is
smaller than “Irkutskiy”.
Social Environment
Demographic
The Irkutsk population today is 592,4 thousand people.
(http://www.centerru.com/regions/regions.asp?id=7). The potential clients
of the shopping center “Irkutskiy”, where I plan to open the first
consulting center, and also the potential clients of my database are people
from 18 to 60 years. It is 60% of the whole population 355,2 thousand
people. (http://www.centerru.com/regions/diagrams/d1_r.html). I do not take
into account people below 18 and over 60 because their parents or children
usually maintain such people. The people over 60, who are not maintained by
their children, usually have very small pension.
In addition, the shopping center “Irkutskiy” is oriented on the people
and households from the middle class with revenues from 120,000 to 240,000
rubles per year. According to the statistical information and my knowledge
it is approximately 10% of able-bodied citizens or 35,5 thousand people.
(http://www.centerru.com/regions/regions.asp?type=reg&id=7). I also made a
small survey, which tells that approximately once for three months
respondents of such people make purchases of clothes, shoes, or some other
similar products. I assumed that for year potential clients make 142
thousand purchases, 0,38 thousands a day. If every second makes such
purchase in of the shopping center “Irkutskiy”, than there may be
approximately 190 potential clients of my database a day according to
demographic analysis.
Culture
According to my survey and experience, I divided all potential clients
into two categories. The first is people, who like go shopping and do it
for rest. They are approximately 70% of respondents. The second is people,
who do not like go shopping and do it as necessity 30%. The second category
is my potential clients. So, I assumed that there are about 57 (190*30%)
potential clients of my database a day.
Political Environment
For last years, the local government has made attempts to increase the
power of the consumer protection law. It reflects in the increasing
quantity of people, who are content from purchases. As a result, more
people are ready to make a purchase and companies increase their quality of
service and products. It can be applied also to the shopping center
“Irkutskiy” because for the last year more people have made purchases there
than for previous years. These political attempts and other economical
factors are the causes of the increasing quantity of clients in the
shopping center “Irkutskiy”, and, consequently, my potential clients.
Economic Environment
For last years, the level of revenues of population in Irkutsk is
constantly increasing.
(http://www.centerru.com/regions/regions.asp?type=reg&id=7). It increases
the purchasing power of population. As a result, the shopping center
«Irkutskiy» has constantly increasing quantity of clients that can be the
potential clients of my database.
The increase in the level of revenue results in the increase quantity
of nonfood purchases because this sector of household is only 15% of all
households revenues (about 60% of revenue are spent for food in Russia). It
is significantly less than in developed countries. So, the increase of
revenues increases the quantity of nonfood purchases.
Competitive Environment
There is no such service in the shopping center «Irkutskiy» and other
markets. So, there are no direct competitors.
Indirect competitors are different print media that usually give brief
information, where people can buy some kinds of clothes, shoes and etc.
Such information is usually about one product or one company and does not
give potential clients the picture of the whole market to choose the most
appropriate product. So, these competitors can not influence my business
very much.
Potential Problems
1. My assumption that every second purchase is made in the shopping center
“Irkutskiy” may be overrated, so there are may be the smaller quantity of
potential clients of my database.
2. The results of my survey may be not valid. It also may change the
quantity of potential clients.
Market Data Summary
Target Clients
Target clients are people between 18 and 60 years old, who have
revenues from 120,000 to 240,000 rubles per year and go shopping as
necessity. They will use my service as they do not want to spend much time
on shopping and want to save their time.
Target Market Size
There are 355,2 thousand people between 18 and 60 years old. Ten
percent of them 35,5 thousand have an average annual income between 120,000
to 240,000 rubbles. Thirty percent of them do shopping as necessity. So, my
target market size is 10,650 clients a year. If every client makes four
purchases a year in average than total annual purchases are 42,600.
MARKET STRATEGY
Product
The product of the venture will be the information about available
goods in the shopping center «Irkutskiy» at first. Then we will broad our
service and offer information about the shopping center «Fortuna». Finally,
we will create database, where each person will be able to get information
about products that are available at the shopping center «Irkutskiy», the
shopping center «Fortuna», and the shopping center “Complex”.
Price
Price policy will be based on the market demand. The small survey, I
made, gave information that the best price will be 24 rubles ($ 0,8).
Place
We plan to develop three ways of delivering information. First, we
open the consulting center in the shopping center «Irkutskiy», then in the
shopping center «Fortuna», and finally in the shopping center “Complex”.
Each center will have one consultant that will sell clients necessary
information for cash. Second, after the establishment of the consulting
center in the shopping center «Fortuna» we plan to create the wed site,
which will offer the same service as consulting centers. After the
establishment of the consulting center in the shopping center “Complex” we
plan to offer phone consultation about available products at these markets.
Promotion
The key promotion tactics will be that clients will lose nothing. I
plan to sell necessary information and give a coupon that will offer a
client a discount of $0,8 (the price of my service). He or she will give
this coupon to salesperson when will make a purchase, as a result a client
of a market will lose nothing. In addition, before the beginning of
operations I will make contracts with the managers of pavilions and shops.
The main point of them is that I will publish information about their
product in my database and will take nothing from them, but they will have
to compensate clients the $0,8, when they will make purchases in the
pavilions with my coupons. So, clients will be motivated to make a purchase
in the pointed pavilions and managers will get new clients.
I also will give advertisement in newspapers and on printed buckets
that will be spread at the doorways of the shopping centers.
Finally, I plan to use the Internet advertising; mostly banners that
will be located at the Irkutsk on-line shops. I plan to make the exchange
of banners to avoid the payment for advertisement.
SELLING TACTICS
Cash and Accounts Receivables
All sales will be made in cash, as invoices and credit cards are not
yet actively used in Russia. So for the first three year I will not plan to
use accounts receivables. Only after the third year, when the phone-
consulting center will be opened, I plan to sell information on credit by
phone bills. Such system assumes that the phone companies will clear these
bills, and then their clients pay for the whole phone bill, in which the
amount of my bill will be included. So, the management of account
receivables will not be complex, and will be secured by the phone
companies’ liabilities.
Peak sales
As I plan to establish consultant service by using database that helps
to find products, my sales will depend on the sales of market. Within
Russia, most retail sales occur during the New Year holiday season and
during the season of the men’s and the women’s holidays (February 23 and
Mart 8). As a result, the biggest sales will be during the winter season
because during that time there are the biggest quantity of clients, but at
this time there is also a downturn in cash. I think that some decline will
be at other seasons, especially during summer because a lot of people are
going on vocation. There is an increase in sales at the end of summer
because students prepare for school and colleges and buy a lot of non-food
things. So, the best time is the end of December, the end of February, the
beginning of Mart, the end of August and the beginning of September. During
this time, I will have the biggest cash inflow.
OPERATIONS PLAN
Each consulting center will be located at the doorways of the shopping
centers. The average square of a center will be 16 m2. One center will have
the computer (Pentium 3, 550-750 hertz, 128 RAM) with a monitor and a
modem, the printer (Canon LBP-800) and a telephone/fax. Each computer will
have the database of goods at markets, Windows 2000, Microsoft Office
package, the Internet application and Web-design programs. Office equipment
will be a computer table, a chair, and the document cupboard. In addition
each consulting center will have the pack of paper for printing and some
writing implements. A manager will deliver the cartridges for a printer,
when they are necessary.
The working time of my business will be the same as the working time
of the shopping center «Irkutskiy», the shopping center «Fortuna», and the
shopping center «Complex». The «Irkutskiy» and the «Complex» working hours
are from 10 am to 8 pm, so the consulting centers in these markets will be
opened during this time. The consulting center in the shopping center
«Fortuna» will work from 9 am to 7 pm. The web site will be available 24
hours a day. The phone center will work from 9 am to 9 pm.
The information will be updated by consultants of consulting centers
that have liabilities to collect changes in information after the workday
and put it in the database.
FINANCIAL PLAN
Necessary Financing
For my operation I will need $2,250 at the beginning of the second
year of existence. If the demand for my service will be as projected then I
will open the second consulting center in the shopping center «Fortuna», so
I will need financing to buy the fixed assets. This loan will be necessary
to support my development.
Cash Budget
| |2003 |2004 |2005 |
|Operating activities | | | |
|Net income |$1 331|$3 075|$3 510|
|Depreciation |$694 |$1 674|$2 073|
|Net cahs provided by |$2 025|$4 750|$5 583|
|operating activities | | | |
|Long-term investing | | | |
|activities | | | |
|Cash used to acquire fixed |-$1 |-$1 |-1403,|
|assets |273 |336 |31 |
|Cash used to acquire |-$829 |-$871 |-$914 |
|intangible assets | | | |
|Net cash provided by |-$2 |-$2 |-$2 |
|investing activities |102 |207 |317 |
|Financing activities | | | |
|Owner's investments |$2 102|$0 |$0 |
|Increase in notes payable |$0 |$2 207|$0 |
|Net cash provided by |$2 102|$2 207|$0 |
|financing activities | | | |
|Net change in cash |$2 025|$4 750|$3 266|
|Cash at the beginning of year|$0 |$2 025|$6 774|
|Cash at the end of year |$2 025|$6 774|$10 |
| | | |040 |
Balance Sheet
|Assets | | | |
| |2003 |2004 |2005 |
|Current assets: | | | |
|Cash |$2 025|$6 774|$10 |
| | | |040 |
|Fixed assets: | | | |
|a computer |$500 |$1 025|$1 576|
|a monitor |$250 |$513 |$788 |
|a modem |$80 |$165 |$253 |
|a printer |$153 |$313 |$481 |
|office equipment |$200 |$410 |$631 |
|a telephone/fax |$90 |$185 |$284 |
|Less accum. |$420 |$1 434|$2 689|
|depreciation | | | |
|Total fixed assets |$853 |$1 175|$1 323|
| | | | |
|Intangible assets: | | | |
|a database |$661 |$1 355|$2 083|
|Other software |$168 |$345 |$531 |
|Less accum. |$274 |$934 |$1 752|
|depreciation | | | |
|Total intangible |$556 |$766 |$862 |
|assets | | | |
| | | | |
|Total assets |$3 433|$8 715|$12 |
| | | |225 |
| | | | |
|Liabilities | | | |
|Long-term notes |- |$2 207|$2 207|
|payable | | | |
| | | | |
|Owner's equity | | | |
|Nikolay Belih, |$3 433|$6 508|$10 |
|capital | | |018 |
| | | | |
|Total Liab. and |$3 433|$8 715|$12 |
|Equity | | |225 |
Income Statement
The amounts are given as they are in Russia
| |2003 |2004 |2005 |
|Revenues |$8 464|$18 |$33 |
| | |050 |940 |
|Operating expenses: | | | |
|Salary expense |$2 400|$5 040|$15 |
| | | |876 |
|Office rent expense |$1 600|$3 480|$6 854|
|Depreciation furniture |$694 |$1 674|$2 073|
|and equipment | | | |
|Advertising |$659 |$631 |$609 |
|Insurance |$105 |$210 |$315 |
|Utilities expenses |$62 |$131 |$413 |
|Total operating expenses |$5 520|$11 |$26 |
| | |167 |141 |
| | | | |
|General expenses: | | | |
|Telephone & Internet |$525 |$630 |$756 |
| | | | |
|Other expenses: | | | |
|Interest |$0 |$662 |$662 |
| | | | |
|Total expenses |$6 045|$12 |$27 |
| | |458 |559 |
|Net income before taxes |$2 420|$5 591|$6 381|
|taxes (45%) |$1 089|$2 516|$2 872|
|Net income |$1 331|$3 075|$3 510|
Ratio Analysis
| |2003 |2004 |2005 |
|Leverage ratios | | | |
|Debt ratio |- |0,25 |0,18 |
|Debt -to-net worth |- |0,46 |0,30 |
|ratio | | | |
|Times interest earned |- |8,44 |9,64 |
|ratio | | | |
|Asset Management | | | |
|Fixed assets turnover |9,93 |15,36 |25,65 |
|Total assets turnover |2,47 |2,07 |2,78 |
|Profitability ratios | | | |
|Profit margin on sales |0,16 |0,17 |0,10 |
|Return on total assets |0,39 |0,35 |0,29 |
|Return on equity |0,39 |0,47 |0,35 |
I did not indicate accounts receivables and accounts payables, as my
business will be very small and all operations will be done in cash by
personal sales during first three years. In addition, invoices and credit
cards are not common in Russia, so it is one more reason of not indicating
them. So, I did not count liquidity ratios, as all of them are based on
current liabilities.
From my analysis of projected future operations, we can see that debt
ratio will decrease in 2004 and 2005 from 0,25 to 0,18. It tells about the
decrease of funds provided by creditors and increase in the attractiveness
of business for investments, as creditors prefer lower ratios. Debt -to-net
worth ratio will also decrease in 2004 and 2005 from 0,46 to 0,30, what
tells about the increase of business’s ability to meet both its creditor
and owner obligations in case of liquidation. The times interest earned
ratio will decrease. It indicates that the firm will have fewer
difficulties in meeting the interest payments of loan. The net income can
decrease almost by ten times until the business will not be able to pay its
interest obligations in 2005.
The fixed assets turnover will constantly increase, what indicates the
increase of effectiveness of the fixed asset usage. The total assets
turnover ratio will decrease from 2003 to 2004 and increase from 2004 to
2005. It tells about the decrease of the volume of the business produced on
the total asset investment in 2004 and increase of it in 2005. The main
cause of decrease will be more significant increase in total assets and
less significant in sales.
The profit margin on sales ratio will slightly increase in 2004 and
more significantly decrease in 2005. It indicates the decrease of income
per dollar for the first three years of existence. The cause of the
decrease in 2005 will be the more intensive use of debt.
The ROA will constantly decrease in the first three years of existence
of the business. It indicates the decrease of the return on assets. The
cause of it will be more significant increase in total assets and less
significant in net income.
The ROE will increase from 2003 to 2004. It will indicate the increase
in the rate of return on the owner’s investments. The cause of it will be
more intensive use of debt. But in 2005 there will decrease in ROE, what is
explained by the more significant increase in equity and less significant
in net income.
Depreciation Estimation
I will use the modified accelerated cost recovery system method of
depreciation. According to my opinion it is the best for me because it will
allow getting some tax savings because of the decrease of income due to
accelerated depreciation.
|All assets |Fixed assets |Intangible assets |
|Depreciation |Depreciation |Depreciation |
|2003 |2004 |2005 |2003 |2004 |2005 |2003 |2004 |2005 |
|33% |45% |15% |33% |45% |15% |33% |45% |15% |
| |33% |45% | |33% |45% | |33% |45% |
| | |33% | | |33% | | |33% |
|Accumulated depreciation |Accumulated depreciation |Accumulated |
| | |depreciation |
|$694 |$1 674 |$2 073|$420 |$1 014|$1 255|$274 |$660 |$818 |
Fixed Capital Estimation
I made the estimation for the first year. As all assets are almost the
same in each consulting service than I determined the price for the next
period by making inflation adjustments.
|Name of |Costs | | | |
|assets | | | | |
| |Pessimist|Realist|Optimist|Most |
| |ic |ic |ic |probably |
|a |$550,00 |$500,00|$450,00 |$500,00 |
|computer | | | | |
|a monitor|$275,00 |$250,00|$225,00 |$250,00 |
|a modem |$96,00 |$80,00 |$66,06 |$80,34 |
|a printer|$180,00 |$150,00|$135,00 |$152,50 |
|the |$1 040,00|$650,00|$325,00 |$660,83 |
|database | | | | |
|Other |$400,00 |$150,00|$10,00 |$168,33 |
|software | | | | |
|office |$220,00 |$200,00|$180,00 |$200,00 |
|equipment| | | | |
|a |$100,00 |$90,00 |$80,00 |$90,00 |
|telephone| | | | |
|/fax | | | | |
|Total: |$2 861,00|$2 |$1 |$2 102,01 |
| | |070,00 |471,06 | |
Working Capital Estimation
I also made the estimation for the first year, as with the fixed
capital, and than determined the price for the next period by making
inflation adjustments.
|Name |Costs |
|of | |
|assets| |
| | | | |
| |Pessimi|Reali|Optimi|
| |stic |stic |stic |
| | | | |
|Paper |$36,00 |$24,0|$13,00|
| | |0 | |
| | | | |
|Cartri|$27,50 |$25,0|$22,50|
|dges | |0 | |
| | | | |
|Writin|$15,00 |$12,7|$7,14 |
|g | |1 | |
|implem| | | |
|ents | | | |
| | | | |
|Total:|$78,50 |$65,7|$42,64|
| | |1 | |
| | | | |
Basing on the cash receipt forecast, I will need
1*$78,50+4*$62,71+1*$42,64= $62 a year for working capital.
Marketing Estimation
The sales estimation I based on the next assumptions:
1. The share of the ''Irkutskiy'' market will decrease, as there will
appear some competitors.
|2003 |2004 |2005 |
|45% |43% |41% |
The amount of purchases a day in average in the «Irkutskiy» market:
in items
|2003 |2004 |2005 |
|193 |219 |242 |
2. The share of the the ''Fortuna'' martet will decrease as there will
appear some competitors.
|2004 |2005 |
|12% |10% |
The amount of purchases a day in average in the «Fortuna» market:
in items
|2004 |2005 |
|61 |59 |
3. The share of the ''Complex'' market will stay constant.
|2005 |
|19% |
The amount of purchases a day in average in the «Complex» market:
in items
|2005 |
|112 |
The assumed amount of potential clients that will use my database:
Share:
|1 year|2 year|3 year|
|50% |70% |85% |
The amount of potential clients a day
|2003 |2004 |2005 |
|29 |59 |105 |
The amount of potential clients a year:
|2003 |2004 |2005 |
|10650 |21488 |38481 |
The projected sales price
|2003 |2004 |2005 |
|$0,80 |$0,84 |$0,88 |
Advertisement expenses
| |2003 |2004 |2005 |
|Printed |$347 |$303 |$265 |
|materials | | | |
|News papers|$312 |$328 |$344 |
|Total: |$659 |$631 |$609 |
Labor Expenses
Labor expenses are based on assumption that every year I will open one
additional consulting center. So, there should be one additional consultant
each year.
A month:
| |2003 |2004 |2005 |
|Salary |$200 |$210 |$221 |
A year:
| |2003 |2004 |2005 |
|Salary |$2 400|$5 040|$15 |
| | | |876 |
Rent Expense Estimation
Rent, a year
| |2003 |2004 |2005 |
|«Irkutskiy« |$1 |$1 |$1 |
|market |600,00 |680,00 |764,00 |
|«Fortuma« | |$1 |$1 |
|market | |800,00 |890,00 |
|«Complex« | | |$3 |
|market | | |200,00 |
|Total |$1 |$3 |$6 |
| |600,00 |480,00 |854,00 |
MANAGEMENT PLAN
As I plan to organize small venture, I decided to use simple structure for
management.
The responsibility of manager: develop database, programming, accounting,
transport, managing finance, human resource, and operational activities.
The responsibility of consultants: serve clients and update database, look
after equipment
This structure and distribution of functions are optimal for such
businesses as I plan to organize.
HUMAN RESOURCES PLAN
The manager of the firm should be able to use specific program tools.
He or She should have manager/economic education and have some experience
in working for a consulting firm. The manager should know financing,
programming, basics of human resource management, and accounting.
The consultant should have computer skills, know programming and be
able to work with the Internet effectively.
As I stated in the financing plan I plan to hire one more consultant
each year because I plan to open new consulting center each year.
As my venture is small and does not have much financing I will not
plan to pay for all medical insurance expense of employees, but I will
provide transportation from home to work and from work to home. I plan to
establish friendly environment that will help to organize work more
effectively.
The motivation will be based on the salary % and on the opportunity of
realization available knowledge.
CONCLUSIONS
This venture will help people to save their time and money. It will
help to find what is necessary more quickly.
According to market plan it has good opportunities for development and
if the market strategy is right than it might be quite profitable. Next, by
using effective management tactics the organization of the work process
will be on the highest level. In addition, the use of cash sales will help
to held cash balance in good condition. Finally, prepared and qualified
personal will be the guaranty of stable development.
As a result of this venture clients find products more quickly, and
sellers get new clients, consequently, everybody win. So, this venture has
a lot of perspectives.
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Manager
Consultant 1
Consultant 2
Consultant 3