“Pure Business” Company Business Plan

Summary

Pure Business is a proposed company to be established in Syria which will be responsible for marketing, advertising and research. The business’ services will be made available in the country through a series of advertisements and promotions. The business will offer affordable rates in all services offered. This business will be launched in January 2010 in Syria by its’ founding team comprising of 6 partners: Renata Sue, Jerry Makare, Hassan Joe, Tahiti Mnasi, Amos Zeni and Victor Yeswa.

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Renata will be in charge of information technology; she has the skill and knowledge of hardware and software of computer science, she will be responsible for the construction and maintenance of the information system. Jerry, Hassan and Tahiti will be responsible for the marketing activities to develop effective marketing strategies. Amos will be the financial manager; he has the knowledge on the financial aspect on how company should operate in terms of cash flow and capital investment. Victor will be the managing director of the management team of the company; since he has a strong knowledge of the industry, a strong leadership, and 15 years experience in the field, he will take the responsibilities for the entire operations of the company.

The projected profit and loss shows that the organization expect to maintain gross margin but increase net profit margin during the next three years. The single most important factor in the improving profit margin is the economies of scale in our general and administrative expenses. These expenses should decline as a percentage of sales, from more than 15 percent of sales in 2011 and this will indicate good trend. By the year 2012 the business is expected to have established a solid market for revenue. This will ensure that the business supports staff and own growth with time.

Business overview

Introduction

Pure Business is a proposed company to be established in Syria. It will be responsible for marketing, advertising and conducting business research. The business’ services will be made available throughout the country through a series of advertisements and promotions. Various measures will be put in place to ensure success and efficiency.

Current position

Currently the business is in the implementation stage and will be launched and start its’ operations in January 2010. Pure Business will compete in the media information industry which is a mature industry but allows for value innovations for customers.

Competitive advantage

The competitive rivalry is high as the existing local competitors are offering the same services. Also, there is the threats of new entrants in the market since the barriers to entry is low. Despite the competition, we expect the business to enter and thrive well in the industry due to the effective strategies put in place by the management team.

Growth plan

Once the services are well established in the market, the company plans to move ahead with an aggressive development plan. The first step includes extending its service line. The process of service range extension will be accomplished by introducing new services in the market to meet customer needs and increase profits. As seasons change, profits will keep growing for Pure Business, as there will be good strategies in place to grow the Pure Business Market. Additional features will be created to drive new demand for an existing market then, and relationships with customers would be strengthened to have solid base for revenue to support the staff.

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Business strategy

As a new entrant in the industry, our main objective is to strive to be the best service provider in the region and this shall be realised through differentiation to achieve our short term objectives of building a consumer experience. Objectives for the next 3-5 years of operation will be achieved through market penetration, market development, and product development which will help in building a consumer experience by focusing on improved services. At this point of growth, the business is expected to have stabilised. The business objectives below provide the direction to the business:

  • Strive to be the best service provider in the industry and region of operation.
  • Establish good market and retain customers by increasing loyalty and services.
  • To Increase the market share among corporate and personal and remain stable.

Tactics

With efficient marketing of the business through advertisements and promotions, the entrance of the business into the market is expected to be smooth. Further strategies will be put in place to ensure customer satisfaction and maintenance of good customer relations. More ideas will be welcome as seasons pass to ensure efficient management.

Strategic issues

In this market the major external factors that can affect the business are threats of new entrants, substitutes and rivalry among competitors. In the 1st year of operation we expect a stiff competition from the existing established and related companies which will gradually reduce due to application of our effective strategies. Gradually we expect to dominate the market. The major opportunities enjoyed include stable rules, multy-cultural diversity, and political stability that are guides to success and maturity.

Core values

Below are the core values for the company and are to be strictly adhere to by the staff:

  • To uphold the highest standards of business ethics to ensure no disagreements.
  • To maintain our reputation for reliability and commitment to serve all dearly.
  • To deal with every enquiry responsively and with empathy for efficiency.

This values are very beneficial to the business as they will improve the business’ reputation and attract more customers. Staff will apply the values in the management.

Marketing

SWOT and critical success factors

SWOT analysis is used plan a bussiness’ strategies. Evaluation of Pure business in terms of Strength, Weakness, opportunities and threats is as shown in the table below:

Strength

Solid financial resources
Good HR systems
Good customer service
Solid reputation

Weaknesses

Role culture
Retention of responsibilities

Opportunities

Political stability
Multi-cultural diversity
Stable rules

Threats

High competition
Short period negative outlook

This analysis confirms the direction of strategic intents but we must be aware of the threats and must work to reduce the weaknesses so as to be able to achieve objectives.

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Market research

We, as Pure Business Company, will compete within the information industry which is a mature industry but allows room for value innovation for customers. The market is a highly competitive one as customers have many options in making their consumer decisions. For ease of operation we shall try to provide improved services to clients.

Distribution channels

During start-up the business will strive to establish a stable market that will generate resonable income to support growth. Customers will be reached through various channels as time lapses but initially, the internet, television and promotions will be the most appropriate. In the 1st year of operation, we expect to have fully entered and stabilized in the local market which will be achieved through provision of quality services at affordable prices. In 3-5 years, the business is expected to enter new markets in the neighbouring countries and all the services rate improved significantly.

Strategic alliances

Ater attainment of stability, business alliances shall be considered as a way of maximizing the profits of the firm and increase the company’s popuarity in the region. This will involve merging with other related businesses or acquisition which will be beneficial to the business as more customers means more profits to the company.

E-commerce and technology

Most of the marketing will be done through the internet as this is more efficient and readily accessible. Through a well advertised website, the company is expected to reach many potential customers. Ordering of services will be advanced and customers will be able to place oders over the internet which shall be operating 24 hours a day. This therefore means the business will be fast and efficient in meeting customer needs.

Tactical promotion plan

One of the main ojectives is that Pure Business becomes successful and one of the steps of achieving this is through promotion. Promotion boosts the sale of a product or service and the main methods that shall be employed will include launching of advertising campaigns, increased PR activity, temporary price reductions and telemarketing. This will greatly influence the business’ especially because it is a new business in an already established market. More tactical ideas to be used in future.

Marketing budget

Initially the management would need $0.1 million for the organization, of which each partner of the company will contribute $8,000 in total and the rest will come from a financial institution. This is the initial capital that is needed in the 1st year of operation and the table below show the summary of how the capital will be used. The budget is calculated in dollars as shown in the table with marketing taking the lead in allocation.

Production process $.25,000
Marketing budget $.55,000
R&D and other expenses $.20,000

Credibility and risk reduction

Efficient plans will be put in place to ensure risks are minimized greatly, and credibility of the business is increased which will increase the business’ reputation.

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Team and management structure

Skills, experience, training and retention

The management team of the company comprises of 6 members. Renata will be in charge of information technology; she has the skill and knowledge hardware and software of computer science, she will be responsible for the construction and maintenance of the information system. Jerry, Hassan and Tahiti will be responsible for the marketing activities to develop effective marketing strategies. Amos will be the financial manager; he has the knowledge on the financial aspect on how company should operate in terms of cash flow and capital investment. Victor will be the managing director of the management team of the company; since he has a strong knowledge of the industry, a strong leadership, and 15 years experience in the field, he is most qualified to take responsibilities for the entire operations of the company.

Advisors

The business shall have 1 layer, an accountant and a number of consultants for the it to operate most efficiently in the industry. Julius will be business lawyer; he is a qualified lawyer with a masters in Law and 8 years work experience. Samuel will be the accountant; he is competent and has a degree in Accounting. Joseph, the managing Director of RIT finance Company is the Companies mentor and also qualifies to be its’ consultant among many others as will be identified by the organization and staff.

Management systems

The use of important software shall be employed to ensure competence levels are high in terms of technological advantages. Special rules guiding conduct shall be put in place to ensure all staff provide competent services and one liable for own mistakes.

Financial budgets and forecasts

Financial Plan

Initially the management would need $0.1 million for the organization, of which each partner of the company will contribute $8,000 in total and the rest will come from a financial institution. This is the total capital needed to establish the business as shown in the budget. Due to the low starting capital, entering the market will be smooth especially with the financial assistance from the availlable financial institutions.

Assumptions

The assumptions listed below are very important and have a strong influence on the financial plan. The most important assumptions put into consideration include:

  • An assumption that there is a slow-growth economy with no major recession.
  • An assumption that there will be no unpredicted changes technologically. This means that there shall be no risk of offered products or services being outdated.
  • An assumption that the organization has enough finance and access to equity capital. This will ensure that our financial plan is effectively taken care of.

Projected Profit and Loss

The projected profit and loss shows that the organization expect to maintain gross margin but increase net profit margin during the next three years. The most important factor in improving the profit margin is the economies of scale in our general and administrative expenses. The profit and loss table shows the annual numbers but detailed monthly projections for 2010 are as shown in the appendices of this plan.

Projected Balance Sheet

The table shows the annual balance sheet results, with a healthy projected increase in net worth as indicated. The detailed monthly projections are shown in the appendices.

Projected Cash Flow

The cash flow is most important for illustrating the cash projections for the next 12 months of businesss operations. The cash flow table shows just the annual results, which are less significant. The key to our business plan is the monthly cash flow table, in the appendices, which also shows up as the key numbers of the following chart.

Break-even Analysis

Our break-even analysis is based on our cost and price structure expected as at the 1st year. As we grow, the fixed costs will grow in proportion to our employee numbers.

Appendix

Initial budgeting of the organization Table

Production process $.25,000
Marketing budget $.55,000
R&D and other expenses $.20,000

Profit and Loss Table

Pro Forma Profit and Loss
2010 2011 2012
Sales $106,600 $193,720 $350,550
Cost of Goods $3,055 $16,586 $18,406
Rent $12,000 $13,500 $13,915
Payroll (Inclusive of all depts. $30,000 $30,000 $30,000
Freight $2,023 $4,500 $5,872
Advertising $12,000 $12,500 $13,000
Sales Commissions $7,462 $13,560 $24,539
Office/ Admin expenses $2,310 $4,500 $5,300
Payroll tax $5,100 $5,100 $5,100
Utilities $6,000 $6,300 $6,560
Total expenses $79,950 $106,507 $124,420
Gross Profit $26,650 $87,174 $227,858
Less interest exp $700 $700 $700
Net Profit $25,950 $86,474 $227,858
Profit % 25% 45% 65%

Projected Balance Sheet Table

Pro Forma Balance Sheet
2010 2011 2012
Cash $12,587 $28,902 $73,877
Accounts Receivable $6,084 $11,637 $22,690
Inventory $654 $1,033 $1,909
Other Current Assets $57 $57 $57
Total Current Assets $19,368 $41,615 $98,519
Long-term Assets $3,557 $8,557 $18,557
Accumulated Depreciation $2,524 $2,649 $2,806
Total Long-term Assets $1,033 $5,908 $15,752
Total Assets $20,401 $47,524 $114,271

Cash Flow Table

Pro Forma Cash Flow
2010 2011 2012
Cash Sales $41,317 $79,020 $154,080
Cash from Receivables $68,296 $112,978 $220,067
Subtotal Cash from Operations $109,613 $191,998 $374,147
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $20,000 $0 $0
New Other Liabilities (interest-free) $2,501 $0 $0
Expenditures 2010 2011 2012
Cash Spending $7,114 $14,984 $29,533
Payment of Accounts Payable $87,026 $155,698 $289,638
Subtotal Spent on Operations $94,140 $170,683 $319,171
Purchase Long-term Assets $0 $4,950 $9,998
Dividends $0 $0 $0
Subtotal Cash Spent $102,586 $175,683 $329,172
Net Cash Flow $12,524 $16,315 $44,976
Cash Balance $12,587 $28,902 $73,877

Break-even Analysis Table

Break-even Analysis:
Monthly Units Break-even 520
Monthly Revenue Break-even $29,019
Assumptions:
Average Per-Unit Revenue $55.78
Average Per-Unit Variable Cost $7.73
Estimated Monthly Fixed Cost $25,000
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