business skills @ya - optushome.com.aumembers.optushome.com.au/canyoukeep/YA/bizplan.pdf · an issue – projected sales are at least 240 units, giving a return of at least $2.43

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corporate business plan

@ya.:

Ernst & Young Australiaproudly sponsored by

This business plan and its contents remain the property of @ya - a Young Achievement Australia company. @ya reserves the right to require its return at any time. All information contained herein is confidential and proprietary to @ya. Reproduction or disclosure of any information contained herein is not permitted without the prior written consent of @ya. Unauthorised use, copying, or other reproduction is prohibited. Persons receiving this document agree to maintain the confidentiality of the information contained herein.

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@ya: corporate business plan confidential 00

@ya

table of contents

@ya

@ya: corporate business plan table of contents 01

1. executive summary 2 1.1. q&a - executive summary 2 1.2. our vision, our mission 3 1.3. our objectives 4 1.4. benefits to stakeholders 5 1.5. our finances 6 1.6. our key to success 6

2. the company 7 2.1. business description 7 2.2. company location 7 2.3. business structure 7 2.4. management team 8 2.5. board of advisors 10 2.6. current position 10 2.7. business insurance 10 2.8. planning for the future 10

3. the product 12 3.1. our value added product 12 3.2. product features 12

4. industry and market analysis 13 4.1. industry trends & growth 13 4.1.1. economic confidence 13 4.1.2. business sentiment 13 4.2. industry potential 13 4.3. target market 14 4.4. geographic location 15

5. marketing plan 16 5.1. pricing strategy 16 5.2. promotional activities 16 5.3. public relations 17

6. sales plan 18 6.1. promotion and sales strategy 18 6.2. distribution channels 18

7. competitor analysis 20

7.1. direct competition 20 7.2. indirect competition 20

8. s.w.o.t. analysis 21 8.1. strengths 21 8.2. weaknesses 22 8.3. opportunities 22 8.4. threats 23

9. financial analysis 24 9.1. current ownership summary 24 9.2. financial assumptions 24 9.3. operating principles 25 9.4. sources and uses of funds 25 9.5. break even analysis 25 9.6. projected financial statement 25 9.7. exit strategy 26

10. operations management 27 10.1. product design 27 10.2. quality management 28 10.3. business associates 28 10.4. design and production 29

11. human resources management 30 11.1. our core, our focus 30 11.2. organisational structure 30 11.3. communications 30 11.4. hr initiatives 31 11.5. orgchart 33

12. environmental management 34 12.1. our objectives 34 12.2. our processes 34

appendix i. wages & salaries policy 36appendix ii. business insurance 37appendix iii. break-even analysis 39appendix iv. projected financials 40

1. executive summary

@ya

The customised accessory market is constantly expanding; consumers demand high quality, original, innovative creations that are competitively priced. @ya recognises this opportunity.

Founded in May 2004, @ya is committed to producing a diverse range of high quality, value-for-money customised carry bags.

@ya’s unique unisex carry bags will be packaged and sold in marketplaces, stalls, and by leveraging our extensive salesperson base. We target the 12-25 year old demographic; particularly, secondary and tertiary level students. Three key market observations lead to this decision:

1. The increasing demand amongst young people for original and creative designs that give them a sense of identity

2. The appreciation of hand-crafted and unique designs and the satisfaction of owning a “one-of-a-kind” item

3. Increasing consumer sentiment that products should both be practical and aesthetically appealing

Our financial projection is a net profit of $1,144.99, giving a return of $2.43 per share.

Our team has strong associations with our market - we are, after all, 17 19-21 tertiary students with a strong sense of individuality.

Our purpose here is to communicate to potential and existing shareholders our vision, objectives, strategies, status and operations. Reading this document will yield a thorough understanding of the nature and high quality of @ya’s business processes, current status, and future plans.

@ya: corporate business plan executive summary 02

q: how do you stand out in a crowd..?a: accessorise. accessorise, and customise.

1.1

@ya


our vision, our mission1.2

@ya is firmly committed to producing, marketing and selling premium quality, attractive and inventive carry bags that create value for both customer and shareholder.

Creativity, innovation, diversity, cohesion and teamwork are our core assets.

Respect for our environment and our community, and effective, efficient business practices are our goals.

Ethical, responsible and accountable conduct is our code.

At @ya, we leverage and nurture employee development, collaborative problem-solving and strategic alignment between our corporate and employee visions to achieve total customer, shareholder and employee satisfaction, value and return.

@ya’s mission

Today’s business world is about more than just making products or money. Today’s world is about making a difference. Leaving a mark. Giving back the gift of opportunity.

@ya is focused on providing maximum return - not only to shareholders and customers, but to the employee and the community. Our carry bags exemplify creativity and individuality; our workplace, a friendly, open environment that encourages and develops our company members. @ya is committed to donating a portion of profits to charity - giving back the rewards of opportunity.

@ya’s vision

@ya


our objectives1.3

@ya intends to establish a strong market presence in the Sydney CBD area; our brandname and logo will be recognisable, and will become synonymous with quality, fashion, style, originality and creativity. We stand apart from our competition in that we provide customised, unique styles with a strong sense of individuality. @ya deals directly with customers to create customised, innovative carry bags.

company objectives

@ya will maximise shareholder wealth through sensible and conservative decision making, and by carefully assessing the risks and benefits of decisions and choices.

financial objectives

@ya will minimise the impact of our operation and promote an ecological focus by supporting sustainable and responsible business partners and evaluating the environmental impact of our processes.

environmental objectives

@ya will achieve high sales by effectively employing necessary elements in our market mix. Rather than canvasing all options, @ya will focus on particular tools used in the right combination to acheive our objectives with optimal efficiency. @ya will provide company members with quality training, marketing infrastructure and sales support.

sales & marketing objectives

@ya will be a warm, supportive, encouraging work and learning environment - with a strong development and training focus.

human resources objectives

@ya will ensure that our carry bags are always of the highest quality, providing real value for money at a competitive price point. @ya’s processes will be efficient and effective, and team members will be well equipped and resourced.

manufacturing objectives

@ya


benefits to stakeholders1.4

Investment with @ya provides myriad benefits for stakeholders. Key benefits include:

• Increased wealth through capital gains returns• Support of the students participating in Young Achievers Australia Business Skills Program

shareholders

• Gaining valuable and realistic experience of managing and operating a business• Networking with fellow pro-active and ambitious tertiary students• Networking with employees of the sponsor company• Learning the value of hands on practical experience to complement academic studies• Potential continue the company’s operations after the conclusion of the program

company employees

• Increased business• Potentially establish long term business relationship with the company• Industry recognition that the business is a supporter of the YAA Business Skills Program

suppliers

• High quality, creatively styled bags that are also practical• Support of the students participating in YAA Business Skills Program

consumers

• Industry recognition that the business is a supporter of the YAA Business Skills Program• Involvement in the professional development and education of young entrepreneurs• The opportunity to learn more about business management through observation of

student activities and mentoring.

sponsors ernst & young

@ya


1.5our finances

@ya’s fixed costs amount to $699. A variable cost of approximately $9.50 is incurred for each unit produced. We estimate that 76 units need to be sold in order to reach our break even point. Given our broad geographical coverage and large salesperson base, this is not expected to be an issue – projected sales are at least 240 units, giving a return of at least $2.43 per share. Our carry bags come in two sizes and are competitively priced, at $16.95 for small bags and $19.95 for large bags.

1.6our key to success

Our core business principles are simple and effective.

@ya’s innovative carry bags have excellent market potential. They address a growing customised accessory market that value high quality and practical products. The carry bags create value for the customer and are a product that is high in demand.

the right product

Our people are our soul - and our human resources strategy recognises this. @ya employs excellent, competent people and motivates them to fully utilise their specialised skills for the development of the company. The work environment promotes initiative and lateral problem solving that ensures that our processes are efficient, our innovations known - and our designs creative.

the right people

Students often seek competitively priced, wearable and durable products that express individuality and style. Our product simultaneously combines practicality with the aesthetic appeal of custom design. Customer preference come first - @ya believes in choice. Our versatile carry bags are available in a diverse range of designs that cater for both sexes, all age groups and myriad style preferences. Vigorous, continual and iterative sales training ensures that customers and potential customers always enjoy a positive experience with @ya.

the right market

2. the company

@ya

@ya: corporate business plan the company 07

@ya was formed on the 24th May 2004 in Sydney and has been formally registered by its governing body Young Achievement Australia (YAA). @ya is regulated by YAA, a non-profit, non-government independent organisation that exists to provide young people with a program to develop business skills in a practical learning environment.

@ya is a private company limited by shares; at time of print, 472 shares have been issued. It is compulsory for each board member to purchase at least one share in the company - presently some 28% of @ya’s shares are held by board members.

The company comprises 17 tertiary level students participating in the YAA Business Skills Program. Hailing from diverse degrees and backgrounds, our team members bring a diverse skill set to our company. The students make up the Board of Directors of @ya. From this Board, executive directors are elected to the Management Team to oversee, manage and lead the different divisions of @ya.

business description2.1

@ya is based in the Ernst & Young Building, 321 Kent St Sydney.

A lease agreement is in place and specifies the following:• Ernst & Young provides meeting room/s for @ya from 6pm to 8 pm on Mondays, for the

period from 24/05/2004 to 08/09/2004 inclusive• During meetings, a computer, photocopier, and fax are available• Production meetings that require a different meeting room are provided subject to

availability and prior notice by @ya.

The advantages associated with the business being based in the Sydney CBD include ease of access for customers and company members and the close proximity of the business to target markets (many schools and universities are located within close proximity to the Sydney CBD).

company location2.2

@ya’s organisational structure consists of five divisions – Marketing and Environment, Finance, Human Resources, Manufacturing and Sales - each of which is managed by an executive director. The Managing Director and Company Secretary co-ordinate company-wide issues, and with

business structure2.3

@ya


2.4management team

@ya management team comprises five Executive Directors, the Managing Director and the Company Secretary.

doris to managing directorB Commerce - Actuarial Studies, University of New South Wales

• Provide leadership, support & on-the-job training for all members of the company

• Foster & coordinate the efforts of all members of the company to ensure a positive financial outcome for shareholders

• Integrate approaches across teams and manage company-wide issues• Maintain big-picture focus and ensure operations are in-line with the

corporate vision

tri nguyen finance directorB Business - Accounting, University of Technology Sydney

• Prepare & monitor the company budget, product costing and break-even analysis

• Manage the company’s cash flow, receipts and payments• Routinely monitor & analyse the company’s financial position

jacob bozdas company secretaryB Business - Accounting/B Law, University of Technology Sydney

• Monitor company compliance with all legal & YAA requirements• Maintain records of shareholders• Protect the rights of shareholders• Oversee and manage weekly meetings

the executive board form the management team. This team was voted in by the Board and confirmed following a 6-week probation. Remaining company members belong to one of these five functional areas, and hold specific responsibilities within their teams.

@ya


kristyl burnett marketing directorB Commerce - Marketing/B Law, University of Wollongong

• Design and supervise market research• Oversee product design process with market research considerations• Develop product marketing and branding strategies• Carry out advertising & promotions of the company & its product

patrick hung human resources directorB Science - Business Information Technology, University of New South Wales

• Monitor company morale, plan and execute remedial action• Organise targetted training & development of staff in conjunction with

other functional teams• Develop HR initiatives to motivate and develop company members• Restructure company-wide processes and management changes to

effect strategic and efficient resource utilisation

lillian fung sales directorB Commerce - Economics/B Science - Mathematics, University of New South Wales

• Develop sales strategies• Monitor weekly sales and progress• Explore avenues of sales and distribution• Oversee product logistics from production to salespeople• Implement sales training• Provide feedback on popular designs

ricky chang manufacturing directorB Engineering - Bioinformatics, University of New South Wales

• Oversee design and initial product prototyping stages• Create efficient production processes• Effect production process training• Setting production goals and strategies to ensure completion• Liase with suppliers that are reliable, capable and in-line with the

company’s vision, mission and conduct

@ya


2.5board of advisors

A group of 11 external advisors from the Ernst & Young Entrepreneurial Services Division utilise their expertise and experience in business to guide and advise @ya’s Board. Their skills and perspectives have been and continue to be integral to @ya’s development as a business.

Our EY Advisors are: • Jessica Dixon • Andrew Chambers • Fleur Corbett • Dave Yu • Dave Parfett • Nick Schutt • Janet Chen • Irene Politis • Abbie Lusthaus • Mark Taylor • Angelina Hendraka

2.6current position

@ya’s current focuses are production and marketing. Exhaustive research and analysis has brought sales avenues to the fore; emphasising the production phase will ensure inventory is available for sale. Marketing is currently researching possible campaigns to promote upcoming sales events and augment the push from the Sales team. Whilst the focus is on production and marketing, however, the company is undergoing extensive sales training and the design team works to produce new and appealing styles.

Leave, reimbursement, wages and commissions policies and @ya’s organisational structure were established in the early stages of @ya’s formation. Share issue has been completed, with the choice to halt issue made when adequate capital had been raised. This course of action was

chosen with the aim of preventing dilution of the shareholdings of current investors.

2.8planning for the future

The management team at @ya believes that our product demonstrates exceptional market potential. A strategic development plan, outlining key goals, strategies and milestones, has been authored to harness this market potential and guide @ya’s progress.

2.7business insurance

@ya is covered by it’s governing body. Young Achievement Australia has taken out two classes of insurance for @ya that cover its operations – Combined Products and Public Liability Insurance and Personal Accident Insurance. See Appendix 1I - Business Insurance for full details.

@ya


short term plan 1-2 years

• Expand our lines to a larger variety of bags including handbags, luggage and backpacks• Establish the @ya brand name in NSW as a producer of fashionable and high quality

designer carry bags that are functional and desirable• Establish efficient production processes with specialist designers, production staff and

manufacturing premises• Permanent shopfronts acquired in Sydney• Products available also in major department stores such as Myer and David Jones• Online sales ordering and custom orders available• Establish a loyal customer base in NSW that values the creative designs of the bags and the

association with the brand name @ya• Research and development into expansion to other customisable designer accessories

such as jewellery, purses, hair accessories, stationery and clothing

medium term plan 3-5 years• Expand operations and permanent shopfronts to other major Australian cities • Main production premises and staff expanded to accommodate increased supply• Establish the @ya brand name in Australia as a producer of fashionable and high quality

designer accessories that are functional and desirable• @ya brand name easily recognised and valued by the Australian market• Establish a loyal customer base in Australia that value the creative designs of the accessories

and the association with the brand name @ya

• Launch new product lines including jewellery, purses, hair accessories, stationery and clothing, and expand shop size to accommodate the new products

long term plan 8-10 years• Expand operations and permanent shopfronts to the European and Asian markets• International awareness and recognition of the @ya brand name• Establish the @ya brand name internationally as a producer of fashionable and high quality

designer accessories that are functional and desirable• Main production premises and staff expanded to Europe and Asia to accommodate

increased supply• Establish an international loyal customer base that value the creative designs of the

accessories and the association with the brand name @ya

@ya: corporate business plan the product 12

3.1our value added product

From its inception in May 2004, @ya has strived to develop a unique, innovative and differentiated product that stands above the competition.

In keeping with this goal, @ya has committed to producing customised, unisex canvas carry bags. Uniquely designed, durable and creative, @ya’s storage solution corner a near untapped marketspace at a competitive pricepoint. Our carry bags come in three colours, a variety of designs, and two sizes; they are both customised, and customisable.

3. the product

@ya

washable practical personalized customisable creative sentimental durable handmade stylish affordablewashable practical personalized customisable creative sentimental durable handmade stylish affordablewashable practical personalized customisable creative sentimental durable handmade stylish affordablew

3.2product features

1. Unique Designs It is our belief at @ya that our greatest strength is the variety of designs that we have. The

design team has creative direction as a whole, resulting in bags in which no two are exactly the same. Currently we have canvas bags in blue, khaki and black. Khaki bags come on 2 sizes: regular and large.

2. Affordable Cost As a low-capital company, we have kept labour costs extremely low; this has translated

to substantial savings for the customer. Our competitive pricing strategy makes them affordable items for our targeted youth audience, ranging from high school to young working professionals. More mature consumers see our bags as a present for younger individuals they know.

3. Environmentally-friendly and safe Safety and sustainable practice are central to @ya’s vision. We ensure our team members

not only produce bags in a safe and environmentally-friendly manner - @ya works hard to ensure our end product is safe and non-toxic to consumers of all ages.

4. industry & market analysis

@ya

@ya: corporate business plan industry & market analysis 13

@ya offers a unique product in a competitive industry of fashion and fashion accessories. The retail trade industry is highly influenced by consumer spending levels and business sentiment.

industry trends & growth4.1

Consumer sentiment and the economic environment influences heavily the way consumers spend their money.

A recent survey1 shows that consumer sentiment is at its most confident in 10 years, despite rising oil prices that usually yields cuts in consumer sepnding. Retail sales grew at their fastest pace in more than three years in June 2004; figures indicate that retail sales are not following the expected downward adjustments and dampenings in the index.

Business confidence continues to rise as the economy maintains its growth trajectory. The growth in retail spending may be attributed to the federal government’s $2.4 billion injection in additional family bonus payments. Listed retailers of clothing, electricals and furniture have reported that spending is on the increase and retail profits should be up.

4.1.1economic confidence

4.1.2

The retail trade industry has experienced slow but steady increases over the past decade. In a global business environment characterised by economic uncertainty and fluctuations, consumer spending and retail trade levels have remained relatively stable. Consumer spending and retail trade has stabilised as a result of consumers seeking low-priced alternatives to goods and services.

The @ya bags are an alternative to higher-priced commercially manufactured bags. They are unique, practical and offered at a more affordable and attractive price. The simplicity of the bags’ style and hand-made designs further distinguish the product from mass produced alternatives.

Ultimately, the bags offer a sense of style and uniqueness for the consumer.

business sentiment

In a fashion era of recycled clothes and opportunity shop products, the carry bags represent an “old school” and worn look whilst being new and different. The practicality of a shoulder bag is

industry potential4.2

1. Westpac-Melbourne Institute Survey of Consumer Sentiment, August 2004

@ya


also an appealing feature; particularly useful for school and university students.

A distinguishing feature of the bag is the opportunity for the consumer to further customise the product using a permanent marker. The school leaver market is particularly concerned with the signing of memorabilia, such as school uniforms, signature bears and school pencil cases, usually to the distaste of teachers, principals and parents. The bag offers the opportunity for students to act rebelliously and “vandalise” the bag to their liking. Therefore, the potential in the school leaver market is extensive when assessing the need for students to act rebelliously within the bounds of school regulations and policies.

Furthermore, the opportunity exists for university students and other consumers to personalise the bag to reflect their individual personality and uniqueness.

The industry potential of @ya’s carry bags lies in the unique qualities the bag offers at an affordable price.

@ya’s target market comprises three categories:

target market4.3

@ya


The market segmentation process of focusing on schools and universities in the Sydney metropolitan region has proved to be the most effective and convenient. This limits the desired target market further and ensures @ya can focus on satisfying the needs and wants of their consumers.

geographic location4.4

• Those occupied in secondary study in years 7-12• Limited or no income• At an impressionable stage of life, including the desire to be socially accepted and yet

remain unique

School leaver market• Generally students who are in year 12 studies• ‘Vandalise’ school uniforms and bags using markers at the completion of school• Desire to record and remember school memories

secondary students

• Those with a practical need for a bag• Desire to obtain significant value for money

• Likes hand-made, quality products

other customers

• Generally aged between 17 – 25• Includes both full-time and part-time students at university, tafe, colleges, etc.• Limited income• Desire to obtain significant value for money• Presents a need for a durable bag of a practical size

tertiary students

5. marketing plan

@ya

@ya: corporate business plan marketing plan 16

The price of @ya’s carry bags: Small size haversack $16:95 Large size haversack $19:95

Our pricepoint is highly competitive as compared with our nearest rivals and will ensure significant market penetration. The pricing strategy employed is that of cost-based and competitor-based pricing and is set at a level that is affordable to various income levels. The bags are set at an exceptional price for the quality and practical benefits the bag has to offer.

pricing strategy5.1

• To take hold of the opportunity of the high school market, advertisements will be promoted to schools with the appropriate authority from principals and teachers. Fliers posted up around the school coupled with school newspaper advertisements will attract the students to the @ya’s unique product.

• Posters will also be placed on university and community noticeboards as this is effective and inexpensive advertising to make consumers aware of our carry bags.

• The posters will have a photographic image of our product and an explanation of where and how purchasing can take place.

fliers & advertisements

promotional activities5.2

• @ya will participate in various market days and stalls offered through both Ernst & Young and universities in the Sydney metropolitan region.

• University stalls are an effective medium to sell to our tertiary student market. They are inexpensive to set-up and run, and provide wide exposure to this particular market segment

market days & stalls

@ya

@ya: corporate business plan marketing plan 17

• The @ya corporate logo is an important aspect of the product and promotional activities. The exposure of the logo ensures the awareness of potential consumers of our carry bags. It is a distinguishing feature which consumers can readily associate with our business.

• The logo is displayed prominently on all products, promotional materials and at all events.

logo exposure

• An underlying characteristic of the target market is the desire for value. By offering a ‘freebie’ to purchases of two or more bags, we provide an incentive to buy in quantities. Through this promotional activity, @ya will increase sales and ensure repeat customers.

freebies

@ya is committed towards a high level of social and ethical responsibility. Our business, through promoting a product primarily directed towards university and school students, aims to offer a positive product to the youth of society. We are a business which respects the opinions and attitudes of students and have incorporated the individuality and creativity into a practical, affordable and durable product.

public relations5.3

promoting a product primarily directed towards university and school students, aims to offer a positive product to the youth of society. We are a business which respects the opinions and attitudes of students and have incorporated the individuality and creativity into a practical, affordable and durable product.

6. sales plan

@ya

@ya: corporate business plan sales plan 18

Arguably one of the most important functions of the enterprise, @ya’s commitment to quality and value adding has provided a firm foundation in the formulation of promotions and sales strategies.

promotion & sales strategy6.1

At @ya we recognise that the first step to developing an effective promotion & sales strategy is to first have a great product and great people. @ya is fortunate to possess both.

(i) Our customised bag is a unique, premium quality product; a product that essentially sells itself. It is durable, affordable, individual and practical.

(ii) The quality of our people exceeds even that of our product. Our people possess extensive experience and expertise in a variety of disciplines, including design and customer service. Furthermore, each member of @ya has been trained utilising a targeted iterative sales training cycle designed to enhance product knowledge, customer awareness and adaptability.

These two elements provide the basis for our promotion and sales strategy. The synergies they generate result in maximum customer satisfaction; in turn spreading market recognition through word of mouth and reputability.

the product the people

distribution channels6.2

@ya members are encouraged to actively approach friends, family, neighbours and members of their local community as this will be an avenue to the general public. As the @ya logo and product gains exposure in these markets, @ya salespeople will be able to take orders and distribute bags accordingly. As our network expands further, knowledge of the @ya product will extend into new and different markets.

individual sales

Community markets and shopping mall outlets were researched and discovered to be an inexpensive and effective method of reaching the wider community. For the mature aged customer our product has ‘handmade’ appeal and can be sold as a functional craft item. For the youth, it is a trendy fashion piece to match any wardrobe. Community markets are also supportive of Young Achievers enterprises where our product will receive a warm welcome.

market day and stall sales

@ya

@ya: corporate business plan sales plan 19

The YAA Trade Expo is another important outlet where Young Achievers’ products will be valued. Here customers attend with the view of supporting the venture. Amongst such a variety of YAA enterprises, our product will be differentiated by its design, functional value and affordability. Our stall will be an attraction and a talking point at the Trade Expo.

Promotional material advertising our carry bags to high-school students will be distributed by first gaining authority from the school, then networking through current year 12 students. As the product gains momentum through year 12, it is expected to extend and filter down through to other levels of secondary education.

school networks

Within this environment, @ya will reach out to our peers by presenting bags that are stylish and personalised yet versatile and affordable for the average student. Here the product will be distributed at stalls on main walkways and social events as well as through face to face sales.

universities

Issues with eFulfilment and payment limit the viability of online transaction. @ya will, however, maintain an advertising website to assist in informing customers and potential customers of events, stalls, information and purchase options. We are also exploring the viability of an eBay style online storefront.

web presence

Strategic alliances with various organisations such as hospitals, social and corporate clubs and community groups are also being explored. Distribution through these channels will heighten community awareness and present a positive image of our product.

other organisational sales

Initial marketing through Ernst & Young (our corporate sponsors) will serve as a preview of response from other corporate markets. A satisfactory response will lead to distribution into other corporate channels.

corporate sales

7. competitor analysis

@ya

@ya: corporate business plan competitor analysis 20

@ya’s direct competitors are companies that manufacture and/or market designed carry bags of varying style and shape. These include:

• Bags stores that provide appealing designs eg Von Dutch: an international, upmarket brand with both US and European presence

marketing unique, hand-made carry bags

• EBay sales of designer customised bags

• Clothing stores that already have a brand presence synonymous with fashionable design characterstics, including General Pants Co, Mambo, Quiksilver, Roxy

• 2nd hand and recycled clothing stores with old fashioned uniquely designed bags (such as the stores around the Newtown area near the Sydney CBD

• Market stalls where vendors handcraft bags (eg Glebe markets, Paddy’s markets, University market stalls)

• Other YAA organisations selling similarly targetted accessories or carry bags

direct competition7.1

Early identification of compeititors – both direct and indirect – is vital in order to ensure long term survival of an organisation. An examination of @ya’s competitors follows.

• Other retail businesses which sell bags (not necessarily customised) – strandbags, Equip, Fiorelli, Oroton.

• Retail businesses that sell designed accessories such as Accesorize, Fossil

• Other YAA organisations selling different products, yet competing for market share and mindspace

indirect competition7.2

8. s.w.o.t. analysis

@ya

@ya: corporate business plan swot analysis 21

A scan of the internal and external environment in which we operate is an integral component of strategic planning. Environmental factors internal to an organisation can be classified as strengths (S) or weaknesses (W); those external may be classed as opportunities (O) or threats (T). @ya’s management team has analysed our strategic analysis using the SWOT tool.

strengths8.1

@ya comprises 17 university students and 10 advisors from Ernst & Young Entrepreneurial Services. Each team member brings specialisations to the table; their experiences provide @ya with a diverse and valuable knowledge base.

a dedicated team of employees

@ya is a 100% Australian owned company. Australian consumers often prefer and support Australian owned companies over foreign operations – yielding @ya a competitive edge.

fully australian

The creative, individualist carry bag market has not experienced the supply necessary to meet growing demand. Larger operations cannot provide the individual, personalised designs that consumers desire; while smaller enterprises cannot meet demand. @ya will step in to fill the void and exploit the opportunity.

an untapped market

Our carry bags are of high quality; they are at once customisable, practical and useful. @ya embraces the need for individuality and originality in a consumer environment where everything is produced in bulk. Our bags are durable, made from 100% cotton and machine washable – characteristics that consumers value.

a high quality in-demand product

Our target market spans secondary and tertiary students – a segment we, as recently secondary and currently tertiary students, know well. @ya possesses superior market intelligence and an understanding of the target market’s expectations and demands.

detailed market knowledge

@ya


weaknesses8.2

@ya is a small enterprise, and a new business in a vast market. A small capitalisation – less than $1000 capital - leaves little room for error. Our new entrant status engenders difficulty in gaining initial market share. High establishment costs - an unavoidable issue for new enterprises - for insurance, resources and lease weigh heavily on cash flow, especially during lead times when production moves to complete units for initial sales.

a small new business

As a new entrant, there is little or no product awareness or brand recognition of @ya. A vigorous marketing campaign is needed to alleviate this problem.

low market awareness

opportunities8.3

The YAA Trade Fair is a fantastic opportunity to gain access to wide retail consumer exposure at Fox Studios in Sydney. The Fair is only open to YAA business, which also eliminates much of the non-YAA competitors.

yaa trade fair

Secondary school students often look for products that give them a sense of identity and self. By targeting this demographic, we provide students with quality individual bags that provide satisfaction in creative design. Another second avenue is the consumer-decorating plain bag sale option.

school stalls

There is a multitude of possibilities for stall sales. The Sydney region has abundant market places available, eg University of New South Wales market stalls, Ernst and Young stalls, Glebe markets, Paddy’s markets.

market stalls

@ya equips all salespeople with a colour brochure - we can’t expect our team to carry all our individual designs on the road. In addition, a website is under development; combined, these marketing channels yield greater access to a larger market, and reduced reliance on physical real-world advertising.

website brochure

Located in the heart of the Sydney CBD, @ya enjoys access to a large population – particularly our target demographic. Larger disposable incomes cultivate a spending culture – making the market ideal for @ya.

geographic location

@ya


With a network of 17 students and 10 advisors, serious marketing possibilities through word of mouth advertising - a proven, powerful marketing tool. Our target market consists of our peers and our demographic - creating opportunities in lecture blitzes, guerilla marketing and school advertising.

word of mouth

threats & risks8.4

Both direct and indirect competitors of @ya have the effect of reducing @ya’s market share, making customer loyalty more difficult to acquire. Competitive behaviour means that profit margins are squeezed and prices reduced in order to attract consumers.

competitors

Increase in the costs of supplies impacts on the cost of production and impacts our margin. To manage this, @ya maintains contractual and good-faith agreements with suppliers – @ya has nurtured and established good relationships with our suppliers with the aim of procuring long

term relationship to the benefit of both parties.

cost of supply

@ya is relying on current high demand of individual stylish carry bag designs; in the future , consumer preferences may change depending on the fashion industry and people’s personal preferences. @ya is an agile organisation; in this event we will adapt our product to service the evolving market.

demand preferences

Regulatory changes such as tax and operating laws, and YAA regulations can affect the way @ya operates. It is very difficult to anticipate regulatory changes; the wide industry impact means we would not be alone in this event.

regulatory changes

The Sydney area is high growth and facilitates rapid expansion. Retail areas allow permanent presence. A skilled labour market yields specialist designers and manufacturers. The Sydney area possesses the suppliers to support @ya’s future expansion and growth.

expansion & growth

9. financial analysis

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@ya: corporate business plan financial analysis 24

current ownership summary9.1

@ya has capitalised itself by issuing 472 shares to 98 shareholders, totaling $944 of its $1000 in authorised capital. Presently, 28% of shares are owned by company members and the remaining 72% owned by the public. @ya have capitalised to what company members agree to be a sufficient level and intend to generate all future cash-inflows from operating activities.

financial assumptions9.2

Assumptions are required to facilitate clear objective-planning in all finance related fields; from use of source and funds, to end reporting requirements in the form of the Statement of Financial Position (Balance Sheet) and Statement of Financial Performance (Profit and Loss).

The assumptions are valid in @ya from inception to liquidation:• All sales are strongly encouraged to be collected in cash. Customers will not be permitted credit. Credit does not permit quick recovery of cash

to fund ongoing business operations, and the possibility of default by the customers poses unnecessary risk. @ya will not absorb potential bad debts, as it will significantly impact our bottom line – and the return to our shareholders.

• Corporate tax rate will be 30% @ya abides by this regulation established by Young Achievement Australia. A higher tax rate

will lower our reported profit; conversely, a lower real tax rate will increase our return.

• Payment of dividends is the only way for shareholders to obtain a return on investment. Dividends will be paid when @ya ceases trading, and after liquidation. Payment will occur

via cheque, sent to shareholders according to records provided.

• Due to our finite operating term, @ya will not pursue long-term investment strategies

@ya


operating principles9.3

• @ya will remain cash flow positive at all time. This ensures @ya will be able to cater for unplanned/extraordinary purchases, expenses,

reimbursements or any other unplanned operating costs.

• All financial reporting is to be done ethically, honestly, and wherever possible, in compliance with any commercial law and or accounting standards.

@ya believes in honesty, accountability, and transparency. All financial reports will be free of bias, reliable, relevant and applicable to all stakeholders.

sources & uses of funds9.4

@ya’s funds have hitherto been primarily sourced by issuing capital and supplemented by initial product sales. The funds raised during the company’s capitalisation were used to cover start up fees and purchase raw materials for production. In particular, it enabled @ya to exploit bulk-purchasing conditions offered by a key supplier and is projected to improve gross margins on our products. As previously alluded to, @ya’s members believe sufficient funds have been generated from financing activities and are fully committed to meeting future expenses and creating future profits by focusing on operations.

break even analysis9.5

Our analysis of the unit costs of our ‘customised’ carry bag, taking into account both the fixed costs and variable costs we incurred showed a break even point (BEP) of 76 units for the smaller sized bag

at $16.95 selling price. Furthermore, a BEP of 64 units for the larger sized bag at $19.95 selling price.

The figures used in BEP calculations can be located in the Appendix III - Break Even Analysis.

projected financial statement9.6

The projected financial statements of @ya (See Appendix IV - Projected Financials) are designed to provide the potential investor with reliable & relevant information as to @ya’s prospects.

The projected figures in the financial statements have been derived from:• Accurate estimations of expenses and cost of goods sold• Forecasts on future sales activity based on research of market & economy• @ya’s overall planned strategy• Key financial assumptions

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exit strategy9.7

There are two exit strategies that @ya can undertake:

1. Member’s voluntary liquidation Upon completion of the Young Achievers 2004 program, @ya is required to wind up its

operations. This is the most likely exit strategy, with the assets of the company dispersed among its members primarily in the form of dividends. Non-cash assets such as production materials, inventory, etc. will be auctioned off among members or donated to charity.

2. Reincorporation/Partnership of @ya @ya believes that there is a niche market for our unique product, thus having the potential

to thrive beyond the YAA 2004 program. @ya could continue its operations as a registered corporation under the Corporations Act 2001 or as a partnership. The viability of this option would depend on success and expansion prospects of our product, as well as the support of a majority of our members.

As can been seen from the projected Profit & Loss statement, @ya forecasts a net profit of $1,144.99, representing a 2.43% return for shareholders ($1,144.99 / 472 shares sold) This represents a modest return to investors, small compared to other shares listed on the ASX. Other shares listed on the ASX, however, enjoy a long term investment status. @ya shares do not have a long time frame and cannot really compete against ASX listed shares. Furthermore, these are conservative estimates, in-line with the accounting principle of conservatism.

Nevertheless, @ya feels that there is much potential for strong returns. This statement has been prepared conservatively in order to provide our investors with a more reliable snapshot.


10.1product design

@ya has applied the “Technology Push” innovation model in commercialising our carry bags.

@ya

@ya’s specialised design team has produced our striking designs. The results reflect our huge potential, and production has begun on these preliminary designs. Monitoring market demand for particular styles will allow design refinement and process systematisation.

@ya’s carry bags are complex products; hand-made to a high standard. Nevertheless, the production process is efficient and smooth. Different designs require specialised skillsets; carefully targetted training has ensured quick negation of the learning curve. Production is underway and continues to meet inventory demands.

It is through process refinement that competitive advantage is gleaned; to this end, @ya strives

continually to streamline its production process. Tasks include:• Involving all @ya members to a greater degree and provide adequate support structures• Specialise and systematise the production pipeline to increase efficiency and quality

Any process that involves sharp items is potentially hazardous. Safety is paramount; @ya carefully monitors the production process to ensure safety and efficiency. Measures include:

• Insistence on reporting and on-the-spot treatment of all injuries, however minor• Ensuring each member has a clearly defined role within a production microteam

Effective management requires effective resource and inventory audit. Controls include:• Recording the finished product on the bag form made by manufacturing team, which is

then passed on to the sales team• Querying design production teams weekly about the status of their production supplies so

that re-trigger orders can be carried out as soon as it is required• Quality management

10. operations management


10.2quality management

Every bag @ya produces undergoes individual attention and scrutiny. This ensures that our products are of an outstanding quality and exceed safety standards.

Principles of Total Quality Management (TQM) are applied in this process in an objective and systematic manner on a weekly basis. Examples of how TQM affects our manufacturing process include:

• Querying production team members about where they need additional assistance, ensuring adequate resource allocation

• Inspect all bags before, during and after production• Keep bags in protective plastic covers when not in use to maintain its good condition• Ensure that different designs are either comparable in appeal or complementary in style

10.3business associates

@ya’s primary bag supplier is Burwood Disposals. It is through our relationship with Burwood Disposals that we are able to realise a value-for-money product for our customers.

Burwood Disposals81 Burwood RdBurwood NSW 2134Australia

ABN: 81 000 462 571Contact Number: 9744 6107

In the event that supplies become constrained, @ya has identified alternate suppliers, located in Engadine and Woolongong; however, the distance to both these locations limits their viability as primary suppliers.

Materials have been supplied by @ya team members, thus incurring zero cost. Stencils and fabric paints are currently obtained from Lincraft, Chatswood.

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10.4design and production

@ya’s product development process includes two stages: design and production.

design process1. Take out undesigned bag from manufacturing inventory, notifying manufacturing team.2. Make prototype design.3. Subject prototype to peer review.4. Form production microteam with assistance from Manufacturing and HR teams5. Proceed to production cycle.

mass production process1. Remove bag from plastic cover2. Perform visual inspection of bag to verify that it is in good condition.3. Commence production processes, with safety, quality and effi ciency in mind.4. Attach @ya product tag to fi nished bag.5. Replace bag in its plastic cover.6. Ensure bag is recorded down as completed with manufacturing team bag form.7. Hand over to sales team for marketing and sale of product.

Exact production details depend on the design in use; these will involve stencilling, painting, or sewing.

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@ya: corporate business plan human resources mangement 30

11.1our core, our focus

Our employees are our core – our employees are our focus. Human Resources exists to facilitate and streamline communication, development, and maximise efficiency and performance of @ya and its employees.

11. human resources management

11.2organisational structure

@ya’s structure spans five functional units – focusing on Manufacturing, Marketing, Sales, Finance, and Human Resources. The managing director and company secretary oversee general administration and company-wide issues; the Executive Board consists of the Managing Director, Company Secretary, and directors of each team. @ya is a collaborative environment and an agile organisation; although these are the core focuses, employees often cross functional areas to form specialist teams targeting specific issues. These include the Design team, the Trade Fair committee, and the Annual Report committee. Rapidly retasked specialist teams allow employees who are interested, willing, appropriately skilled and committed to collaborate and proactively solve specific issues as they arise.

@ya’s full organisational chart can be found on page 33, at the end of this section.

11.3communications

Maximising efficiency requires clear communication; both between team members and their directors, and across functional areas of the company. To this end, @ya has adopted a number of continuing processes to streamline and promote communication.

contact listsHR runs a regularly maintained and improved contact list, searchable by fields including name, position or team, contains addresses, phone numbers (both mobile and home), email and instant messenger (ICQ/MSN) contacts. This list is proactively pushed to employees whenever a change occurs – ensuring each employee possesses and is aware of the latest copy of the list.

weekly meetings2-hour meetings held weekly at the sponsor’s premises – Ernst & Young, Wynyard – are the main touchpoint between company members. Teams present progress updates and reports, issues are brought to the table, and new tasks are delegated and allocated. Additional meetings will be planned as required – such as production meetings.

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board meetingsDirectors (or other representatives of functional areas) and directors meet to discuss the progress of the organisation at a higher level, allowing open discussion of issues facing @ya. Board meetings help ensure high-level strategic alignment, and provide an opportunity for directors to seek direct assistance from mentors at a more thorough level

information transparency@ya believes that involvement and awareness breeds ownership, responsibility and cohesion. Information, policies, minutes, and other documentation is made available to all employees – a practice that is adopted and promoted throughout the executive board. Transparency and involvement extends to decision making – where possible, major decisions are brought to the entire team for open discussion.

@ya: corporate business plan human resources mangement 31

online collaboration@ya has adopted an additional online communication channel, in the form of an e-group (hosted by infomediary Yahoo!) that allows mailing lists, file storage and publication, polls and facilitates simple communication. The mailing list allows company members to send one email, but reach the entire organisation.

11.4hr initiatives

employee developmentWe recognise and attempt to best employ the broad skillsets of each team member; we also recognise and attempt to develop those skillsets that members aim to gain. A commitment to employee training and development aims to assist employees in developing skills in their area of interest, beyond their current skills base; whether they be entrepreneurial, communication, sales or interpersonal. Exposure to different areas of the company allows team members insights into other fields – working together in agile, cross-departmental specialist teams allows development of skills across functions. HR surveys and responses are also leveraged to produce cyclical skills inventories and audits.

attitude surveysTo effectively gauge factors including individual morale, team cohesion, leadership and organisational performance, satisfaction and interest, @ya has adopted an iterative survey-response cycle. Confidentiality ensures respondents are able to speak openly concerning issues they may not feel appropriate to broach in an open forum, yielding an accurate measure of the mood of the company. Data gathered from these surveys allows management, in collaboration with HR, to approach and resolve problems that may otherwise not be evident. Responses can also highlight specific red-flags that may escalate to issues at a later stage – early warning, control and mitigation are of paramount importance.

@ya: corporate business plan human resources management 32

performance managementPerformance of team members – both individually and cohesively – is central to performance of an organisation. @ya adopts a positive feedback process aimed at identifying gaps in performance and development; with targeted training programs and mitigating actions to address any deficiencies. HR continually liases with directors and team members to manage and assess performance across @ya, ensuring oversight into participation and contribution; whilst planning, providing and executing contingency actions where necessary. Conversely, continual performance management also allows clear recognition of outstanding achievements or contributions above and beyond the status quo.

the @ya incentive schemeA broad-based incentive system incorporating all performance measures, from attendance to sales and weekly participation further promotes progressive performance within the organisation. High levels of performance – for example, regular attendance or high sales – will lead to incentives including increased commissions, vouchers, and other tangible benefits.

attendanceAttendance is a clear and simple base indication of motivation, participation and morale. Displays of commitment demonstrated to date indicate that attendance is not expected to be an issue; however, in the event that attendance of an individual becomes a problem, HR will implement predefined measures to proactively resolve and address this issue.

participation@ya’s success depends on the ability and commitment of each and every team member. Participation measures identify and address possible employee dissatisfaction and poor performance.

sales@ya’s main vehicle is our product; organisational performance will therefore be largely dependent on volume of product sold. The Sales and HR teams will work to ensure that team members receive the appropriate level of sales training to ensure all team members are well equipped to market and sell our carry bags; key performance indicators will allow additional training to be planned as required.

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@ya: corporate business plan human resources management 33

11.5orgchart

@ya: corporate business plan environmental management 34

12.1our objectives

We recognise the wide-ranging impacts of business activities on the ecosystem; we promote and adopt ecologically sustainable business practices and processes in all aspects of our operations whilst delivering a product of high standard. Where possible we will choose environmentally responsible suppliers and supplies; minimising the impact of our operation and promoting an ecological focus by supporting sustainable and responsible business partners.

12. environmental management

materials• Our carry bags are made out of 100% cotton, woven into a thick, canvas haversack. They

are durable and safe.• The materials attached to the bags are glued, and then stitched on for reinforcement. This

ensures that materials stay attached to the bag and are of no risk to humans or to the environment.

• In an era of recycling, @ya has promoted this aspect by using materials/buttons that were either found at employee’s homes or were purchased from second-hand stores.

• Spray paints and paints used to decorate the bags are washable and safe. They contain no harmful cfc’s or harmful toxins which may present a danger to consumers.

suppliers• The stockists of the carry bags: Burwood Disposal Store, Burwood. Disposal stores

primarily focus on promoting the natural environment and the benefits of which it has to offer. Therefore, there exists a parallel synergy between @ya and our supplier with regards to a high level of environmental concern and ecological sustainability.

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12.2our processes

Since @ya’s inception, employees have recognised the importance of creating, manufacturing and marketing a product in line with socially acceptable environmental standards. The production process of customising our carry bags is organised effectively; employing supplies that are of minimal detriment to the environment. Internal process management gives @ya the advantage of ensuring environmental impacts are kept to a minimum and high standards of business practice and ethics are upheld.

@ya: corporate business plan environmental management 35

packaging• The bags are packaged in either their original plastic wrapping or are sold as the bag itself.

@ya is supportive of the idea that it is illogical to package a bag in a bag, and that the least environmental impact is the best. Following this reasoning, packaging will be simple and safe to the environment.

• The bags will however, carry a label with the @ya logo and product descriptions. This label will be designed out of paper and will be attached with string. Once the bag is bought, the label can be easily removed and disposed of without any risk to the environment.

@ya

marketing & sales activities• Within the limits of a tight marketing and sales budget, @ya will be promoting our bags

primarily through personal selling and word-of-mouth recognition. Also, stalls and market days will be an effective opportunity for @ya to promote the carry bags. Minimal reliance on paper-and-poster advertisements mean @ya is able to limit our marketing approach’s environmental impact.

• Other marketing activities, including pamphlets and brochures will be designed and created with the environment as a concern. Wastage will be the focus here as @ya will attempt to limit the amount and types of materials disposed of as a result of marketing and selling purposes.

Ultimately, the common objective of the employees of @ya is to create, design, manufacture, promote and sell the customised satchel bags with a high level of concern for the environment. At the current growth stage of the business, a high ethical standard has been maintained throughout all aspects of the company. The business has operated within its responsibility to the environment and is currently in line with its environmental objectives.

@ya: corporate business plan appendix i 36

yaa requirementsThis wage policy addresses the minimum requirements specified by Young Achievers Australia – YAA handbook ref. 5.8.

timingsWages and salaries will be paid monthly from the beginning of production; payments will be made monthly.

wage and salary ratesExecutive directors are paid a monthly salary, while managers are paid an hourly wage. Managing Director $8/monthExecutive Directors $6/monthManagers $0.50/hr

commissionsA base commission of 10% will be paid on all sales. A progressive commission system will be phased in as sales increase; whereby selling more units will result in increased individual commissions.

additionals@ya is not bound by statutory regulations, agreements, or industry awards; @ya is also not required to contribute to employee superannuation, or budget for paid leave entitlements, training, or injury compensation.

accrualsEmployees will be paid the agreed amount as stipulated in the above policy outline. Wages, salaries and commissions are to be accrued and paid on a monthly basis from Unit 8 – paid every four weeks, in arrears.

overtime@ya recognises that responsibilities and demands require employees to work during the week, outside of meetings. Overtime may be paid at normal rates; each team is allocated an excess wage budget from which they can claim this overtime. Beyond this allocated amount, overtime will be drawn from the claiming team’s internal budget.

appendix i. wages & salaries policy

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@ya: corporate business plan appendix ii 37

Class: Personal Accident

Insured: Young Achievement Australia and/or executives and/or board members and/or participating students and apprentices and/or voluntary supervisors for their respective rights and interests.

Insured persons: All participating students and apprentices and voluntary supervisors, board members, executives.

Occupation: Organisers of and participants in Transitional Education and Business Education Programs and all activities in connection therewith including manufacturing, seminars, conferences, state and regional committee meetings and associated activities.

Sum insured: Maximum limit of liability of any one accident: $100,000.00

Benefits: a) As regards persons in regular gainful employment: i. Death $100,000 ii. Temporary total disablement (max. 104 weeks – excess 1 week) $400/week iii. Capital Benefits (as defined) $100,000.00 to $1,000.00 iv. Out of packet expenses (as defined) $1,500.00 b) As regards participating students and apprentices not in regular gainful employment: i. Capital Benefits (as defined) $100,000.00 to $1,000.00 ii. Out of packet expenses (as defined) $1,500.00

Period: January 1 to December 31

Remarks: Insurers have advised that it is NOT their intention to include journeys to and from YAA activities, nor “Slip and Fall” activities such as dances and their events. - Written approval from YAA must be sought before any charges occur regarding meeting venues, place of selling or changes to product proposal.

appendix ii. business insurance

@ya

a.ii.ipersonal accident policy


Class: Combined Product and Public Liability

Insured: Young Achievement Australia and/or their employees and/or committee members and/or participating students and apprentices and/or various YAA companies and/or voluntary supervisors and/or sponsor companies all for their respective liabilities.

The business: Organisers of and participants in Transitional Education Programs and all activities in connection therewith including manufacturing and sales and seminars and conferences and state and regional committee meetings and associated activities and office occupiers and no other for the purpose of this insurance.

Situation: At and from anywhere in Australia

Sum insured: $10,00,000.00 limit of indemnity

Period: January 1 to December 31

Remarks: The insurance contains many ‘exclusions/ and your particular attention is drawn to the following: ¨ Duty owned in a professional capacity ¨ Errors in formula or specification ¨ Goods designed for aircraft or use therein ¨ Watercraft ¨ “Slip and Fall” activities such as dances and other events ¨ Any changes in their business activity not approved in writing by YAA ¨ No food or drink products

appendix ii. business insurance

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a.ii.iicombined producs & public liability policy

@ya: corporate business plan appendix iii 39

appendix iii. break-even analysis

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a.iii.iunit production costs

Carry Bag Cost $5.50Accessories $1.00 -------Total Cost per Unit $6.50

a.iii.iibreak-even analysis

pricing option A B C D (selected)

selling price $7.50 $9.00 $12.00 $16.95production cost / unit $6.50 $6.50 $6.50 $6.50commissions (@10%) $0.75 $0.90 $1.20 $1.70fixed costs $669 $669 $669 $669contribution margin per unit $0.25 $1.60 $4.30 $8.75

break even point (units) 2676 418.1 155.6 76.5

@ya: corporate business plan appendix iv 40

@yaBudgeted Profit & Loss Statement

(Statement of Financial Performance)For the period 1/6/2004 – 31/10/2004

Sales Revenue Large Bags (115 @ $19.95) $2,294.25 Small Bags (125@ $16.95) 2,118.75

Less Cost of Goods Sold Large Bags (115 @ $6.50) (747.50) Small Bags (125 @ $5.50) (687.50) (1,435.00)

Commission @ 10% *(441.30)

Gross Margin $2,536.70

Less Expenses Annual Report (30.00) Insurance (55.00) Lease (40.00) Marketing & Promotion (100.00) Misc. Costs (45.00) Salaries & Wages (400.00) YAA Charter (22.00) YAA Kit Fee (209.00) (901.00)

Gross Profit 1,635.70

YAA Tax @ 30% (490.71)

Profit after Tax $1,144.99

* 10% commission is based on total budgeted sales revenue = $441.30 ($4,413 X 10%)

appendix iv. projected financials

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a.iv.ibudgeted statement of financial performance

@ya: corporate business plan appendix iv 41

@yaBudgeted Balance Sheet Statement

(Statement of Financial Position)As of the period ended 31/10/04

$ Shareholders’ funds: 9441

Retained Profits: 1,144.992

Total Shareholders’ funds: 2,088.993

Assets

Cash: 1,433.994

Account Receivable: 9005

Total Assets: 2,333.996

Less: Liabilities

Account payable: (245)7

Net Assets: 2,088.998

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a.iv.iibudgeted statement of financial position

1. $2 per share X 472 sold (estimated) = $944;2. Amount transferred from Profit & Loss Statement ‘Profit after Tax’ for the period;3. Sum of shareholders’ funds and Retained Profits;4. Amount estimated;5. Estimate: $18 per bag (small and large mixed) * 50 bags = $900. Estimate confirmed by Sales Director;6. Sum of Cash and Account Receivable;7. Estimate: 25 large bags (@ $6.50) + 15 small bag (@ $5.50) = $245;8. Total assets less account payable.


@ya Projected Return on Investment 2004/05

Return on Investment ($ per share)• Large bag $1.139

• Small bag $0.9010

Return on Investment (ROI) [%]• Large bag 78.64%11

• Small bag 62.81%12

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a.iv.iiiprojected return on investment

9. Estimated profit (see footnote 11): $533.33 / 472 shares = $1.1310. Estimated profit (see footnote 12$425.38 / 472 shares = $0.9011. ROI: Estimated profit / (total sum of fixed costs and variable costs) Estimated profit @ 115 bags: $533.33; Total costs: 678.20. ROI: 533.33 / 678.20 = 78.64%12. Estimated profit @ 125 bags: $ 425.38; Total costs: 677.20. ROI: 425.38 / 677.20 = 62.81%

Documents

business skills @ya - optushome.com.aumembers.optushome.com.au/canyoukeep/YA/bizplan.pdf · an issue – projected sales are at least 240 units, giving a return of at least $2.43