Get started Now - maus.com.au€¦ · section 2.1 section 2.2 the simple question template business plan example of a simple business plan business profile ..... 09

Copyright MAUS Business System. All rights reserved W W W . M A U S . C O M . A U

Get started NowTHE SIMPLE

BUSINESS PLAN TEMPLATE

PART - II

WWW.MAUS.COM.AU

Copyright MAUS Business System. All r ights reserved

TABLE OF

CONTENTS >>

SECTION 2.1

SECTION 2.2

WWW.MAUS.COM.AU

THE SIMPLE QUESTION TEMPLATE BUSINESS PLAN

EXAMPLE OF A SIMPLE BUSINESS PLAN

Business Profile ...................................................................................... 09

This plan has been based on the product Widget ......................... 51

Market & Competitive Profile ............................................................. 13

Business Plan XYZ Company (201A-202D) ...................................... 55

Strategic Direction ................................................................................. 21

Business Profile ......................................................................... 57

Strategic Direction .................................................................... 67

Financials .................................................................................... 79

Market & Competitive Profile ................................................ 61

Objectives And Strategies .................................................................... 27

Cash Flow Statement ............................................................................ 37

Income Statement ................................................................................. 41

Other Information & Monthly Evaluation......................................... 45

Cop

yrig

ht

MA

US

Bu

sin

ess

Sys

tem

. All

righ

ts r

eser

ved

Section 2.1

The Simple

The following questions represent the major areas that are generally covered in a business plan. Answer the questions in the order that they are presented and you will finish up with a well formatted business plan.

If you want to include more detail, see the detailed templates included in Part 3 of this manual.

QUESTION TEMPLATE BUSINESS PLAN

WWW.M AU S.COM .AU

W W W.MAUS.COM.AU

Copyright MAUS Business System. All rights reserved

step

Section 2.1

BUSINESS PROFILE


W WW.MAUS.COM.AU

8

BUSINESS PROFILE

WHAT BUSINESS ARE YOU IN?

WHAT ARE THE UNIQUE FEATURES OF YOUR BUSINESS’S PRODUCTS OR SERVICES?

Provide a general outline of your business, sufficient for outsiders to fully understand what your business is all about. Which industry is it in? What is the major benefit, rather than product or service that you provide to your customers?

Discuss product or service advantages that give you an edge in the market. Is your product or service substan-

tially better than your competitors? Does it offer the best, the fastest, the most powerful, the cleanest or the

most efficient solution?


W WW.MAUS.COM.AU

9

BUSINESS PROFILE

WHAT WERE YOUR SALES LAST YEAR AND OVER THE LAST FEW YEARS? HOW WELL HAVE YOU PERFORMED? IF YOU HAVE NOT PERFORMED TO BUDGET, INDICATE WHY NOT.

WHAT ARE YOUR PROJECTED SALES AND PROFITS FOR THE NEXT THREE YEARS?

This provides a background to your sales situation and a lead-in to the future of the business. For instance, you

may include something like “Although our sales have increased by ten percent a year over the last three years

we have never really taken advantage of the opportunities available. This plan is being prepared to enable us to

do so in the future.”

This is the bottom line. How much profit are you going to make?

This is the bottom line. How much profit are you going to make?

Year before last

Last Year Year 1 Year 2 Year 3

Sales

Gross Profit

Net Profit


W WW.MAUS.COM.AU

10

BUSINESS PROFILE

WHAT PROOF CAN YOU PROVIDE THAT YOU WILL ACHIEVE THIS LEVEL OF SALES AND PROFIT?

Back up your forecasts with some form of evidence that there will be continuing demand for your goods

or services. Do you have any advance orders, existing customers that have promised to use your goods or

services, market research surveys or sales experience in this industry that implies a natural growth in the

market. Do you have evidence of any external factors such as changes in legislation, competitor status or

cultural influencers that will lead to a demand for your products or services?

Add anything that reinforces the proposition that you will be successful. For instance, mention any large orders

you have received in the past or perhaps profile some of your existing customers. List anything which may add credibility to your business.


W WW.MAUS.COM.AU

11

BUSINESS PROFILE

W W W.MAUS.COM.AU


step

Section 2.1

MARKET & COMPETITIVE PROFILE


W WW.MAUS.COM.AU

14


HOW BIG IS THE TOTAL MARKET? IS THE MARKET GROWING OR DECLINING?

Explain who will buy your products or services. Is this a good, strong, growing market or is it declining? If it is

declining you should consider diversifying into other markets.

Sometimes the figures on total market size are irrelevant, especially when a business is only a small fish in a very big pond. For instance, a Plumber who has just set up shop will probably get no help from knowing the

size of the total Plumbing market. However, if he is a one-man plumbing business in a particular suburb and specialising in a particular area, it would be worthwhile him knowing how big the market is in this area, how

many competitors there are and how many specialise in the same services as he does.

If you are trying to find out how big the market is, try contacting the association that covers your product or service. Or contact the government information service to enquire about their published statistical information.

If you are launching a new product which will be retailed, you could contact a number of the larger retailers

and ask them how many of these types of products they would sell.

You need to establish the most reliable source of information for your product or service.


W WW.MAUS.COM.AU

15


CAN THE TOTAL MARKET BE BROKEN DOWN INTO SMALLER SUB-MARKETS OR MARKET SEGMENTS?

Try to break down the total market into smaller segments. This will help you develop your plans and

competitively position your products and services. Examples of segmentation, which show you exactly how to

do this are included elsewhere in this manual in the section Examples of Segmentation.

A quick example: If you are selling computers you might segment your market into large businesses, small

businesses, the home buyer, government bodies and students. When you break down your market into

smaller segments such as this it is easier for you to decide how to sell your goods or services to each segment.

For example, you may need to sell your computers at a low price to students and to sell them through the

university magazine. However, to government bodies price would be less of a consideration than reliability. You may also need to employ a sales rep to sell effectively to government bodies.


W WW.MAUS.COM.AU

16


ARE THERE ANY MARKET TRENDS THAT WILL AFFECT YOUR BUSINESS?

It is very important to know and recognise the trends and the external factors that could affect the market, so

you can assess whether or not your business will be viable in the long term. Are there any cultural, legislative,

social, environmental, technological or other influencers that may affect your business? For example, technological influencers have made typewriters, telexes and buggies almost obsolete. Environmental and social issues have seriously affected the plastics industry by forcing companies who were using plastic-based

packaging to find alternatives. There are trends in the market for following a healthier low-fat lifestyle. The hat market will increase in coming years because of awareness of the deteriorating ozone level. Look at your products, services and markets and assess whether there are any potential threats or opportunities that could

affect your planning.


W WW.MAUS.COM.AU

17


ENVIRONMENTAL ISSUES

Consumers are becoming so conscious of environmental issues that we should consider how our business

affects the environment and how we can use this to improve our market share. What is our carbon footprint?

Can we reduce this? What can we do from an internal production or operational perspective? What else can we

do to add to our competitive analysis?

What internal operational steps can the company

take to lessen the impact on the environment?

For example in terms of the office: recycle paper and toner cartridges, switch lights and computers

off, increase recycling opportunities and install

water saving devices in bathrooms. In terms of

production can you use a different supplier with

more environmental friendly products? Can you

manufacture in a different way or remove your

waste in a different way?

Is there anything we do in our processes or

operations that is superior to our competitors?

What can we say about our “green” initiatives that

will help us to distinguish our products from our

competitors?

Examples may be organic foods, products that are

bio-degradable etc. You might also consider if your

products do not necessarily benefit from being “environmentally friendly” or fit into this category, then just listing your green initiative on your website

and in your corporate literature may help you to

build goodwill.


W WW.MAUS.COM.AU

18


HOW DO YOU COMPARE TO YOUR COMPETITORS?

The labels on the left hand side of the box below are examples only. Change them to suit your company.

Your Company Competitor Competitor

Price Strategy

Retail price

Payment terms

Product Strategy

Quality

Ease of use

Reliability

Product life

Country of origin

Promotion

No of reps

Advertising appeal

Website Search Engine Optimisation (SEO)

Pay Per Click (PPC)

Distribution

Exclusive

Direct marketing


W WW.MAUS.COM.AU

19


W W W.MAUS.COM.AU


step

Section 2.1

STRATEGIC DIRECTION


W WW.MAUS.COM.AU

22

STRATEGIC DIRECTION

TARGET MARKET (WHO WILL BUY YOUR PRODUCTS/SERVICES?).

HOW WILL YOU POSITION YOUR BUSINESS’S PRODUCTS OR SERVICES AGAINST YOUR COMPETITORS? IS THERE A GAP IN THE MARKET?

Based on the market trends, profiles of your business and your competitors, who exactly will you sell your products and services to? What market represents the best chance of success? Where are the opportunities?

Why will people buy your goods or services? Are you offering the same as everyone else is or something

that is substantially different and that fills a need in the market? There could be a gap in the market. I.e. No competitors that sell similar goods or services at a price that you are prepared to sell at or no-one else that

has a particular feature or distributes their product in the same manner as you do. In a previous question you

looked at the features of your products and services - in this section you should look at the benefits to the customers of these features and whether your competitors can provide the same benefits.This is an explanation of why you will win! Discuss any major product or service advantages that give you an

edge in the market place. For instance, all watches tell the time but each manufacturer positions its products

differently. People buy Swatch watches because they are fashionable and Rolex watches because of their

image. Isolate the unique feature of your products or services - this is called your competitive advantage.

A service business would do the same. For instance, a gardener’s competitive advantage might be to offer fixed price services. This gives the customer security of price - they know exactly what the service will cost from

the start. The gardener could also offer garbage removal, lawn mowing and pool cleaning. The benefit to the customer is ease of purchase. They can order all these services with one phone call, pay with one cheque and

have a familiar face doing all the work.


W WW.MAUS.COM.AU

23

STRATEGIC DIRECTION

WHAT ARE THE MAJOR THINGS THAT YOU WILL NEED TO ACHIEVE IN ORDER TO MEET THESE FINANCIAL RETURNS?

MARKETING STRATEGY HIGHLIGHTS:

ORGANISATION AND MANAGEMENT STRATEGY HIGHLIGHTS:

PRODUCTION STRATEGY OR RETAIL STRATEGY HIGHLIGHTS:

This is a brief outline of all the things to come. E.g. “We will increase our advertising expenditure, invest in a

new machine, improve our distribution by appointing a freight agency and better target our product to the

consumer based on the results of our market research campaign”. If you are applying for funding for capital

expenditure highlight what the funds will be used for.

Product Positioning

General Marketing Strategy

Number of new employees

Training

Systems and Reporting

(Depending on the type of business you are in)


W WW.MAUS.COM.AU

24

STRATEGIC DIRECTION

FINANCIAL STRATEGY HIGHLIGHTS:

INVESTOR OR SHAREHOLDER STRATEGY HIGHLIGHTS:

If you are the business owner, are you planning on exiting (selling) the business? If so, over what timeframe

and for how much money? Are you looking for a capital injection or simply interested in increasing shareholder

value? If presenting to outside investors or a bank, how much do you wish to borrow and what will be the

return on investment? What, specifically, do you need financing for?


W WW.MAUS.COM.AU

25

STRATEGIC DIRECTION

W W W.MAUS.COM.AU


step

Section 2.1

OBJECTIVES AND STRATEGIES


W WW.MAUS.COM.AU

28


EXAMPLE OF MARKETING STRATEGIES

EXAMPLE OF EXIT AND SHAREHOLDER STRATEGIES

The forms on the following pages cover the major areas of your business which you need to plan for. Use them

to list all the things that you are going to do over the next year, or years, to improve the performance of your

business and to achieve your projected sales and profit figures. Below is an example of how the forms should look when filled in. The “Who” heading refers to who is responsible for making sure that the tasks or strategies are achieved. The “When” column refers to when the task or strategy is to be completed.

Promotional: develop promotions by product, by region, by segment or type of customer, develop a

print advertising campaign, develop a lead generation program, contact “centres of influence”, issue a PR release, develop a new sales approach, contact lost customers and past enquirers, sell new products to

existing customers, develop an up-sell promotion, develop a sales promotion.

Web Promotional: to attract how many leads per month, to create an image, to provide information, to

distribute material, to improve web based profile.

Product: improve the quality, launch a new model or product, develop a returns policy, lengthen the

warranty period, conduct R&D in the area of xxxxxx, develop a brand name, provide add-on accessories

to xxxxx, change the type of package, group like products into package purchases.

Pricing: alter the pricing structure, offer discounts and bulk rates, develop distributor, agent and retailer

pricing levels.

To sell the business in two years for a defined amount of money. To build the value in the business by improving profitability. To impress potential shareholders by implementing systems and procedures.

To develop an employee succession plan.

Strategy (Action Objectives) Who When

To employ a new secretary for sales. PH Mar

To produce an internal newsletter for staff. JB April


W WW.MAUS.COM.AU

29


EXAMPLE OF FINANCIAL STRATEGIES

EXAMPLE OF ORGANISATIONAL & MANAGEMENT STRATEGIES

EXAMPLE OF RETAILER STRATEGIES

EXAMPLE OF ENVIRONMENTAL OBJECTIVES

EXAMPLE OF CHARITABLE OBJECTIVE

EXAMPLE OF PRODUCTION STRATEGIES

Distribution: appoint new distributors, sub-distributors or agents, develop material for distributors, sell

direct.

Eliminate cash-flow shortages, improve the collection of money from debtors, stretch out payments to creditors, reduce expenses, rationalise leases, apply for a $50,000 overdraft, reduce wage payments,

purchase new equipment, reduce inventory levels, look at lower cost rent alternatives.

Improve morale, conduct a sales training course, chart the organisation, and develop policies and

procedures.

Rotate stock on a daily basis, reduce stock damage/pilferage, purchase a better cash register, improve

customer service through training, and improve presentation of stock.

To reduce our electricity consumption by 10%.

To reduce hazardous waste from production by 10%.Become carbon neutral by 201X

To provide $5,000 to charities in 200X

Purchase new machinery, schedule two months for installation and trials of new machinery, commence

production in October on new machinery, spend $50,000 on R&D, lower WIP inventory levels to five percent of production, develop production policies and procedures, reduce reject rate, develop better

production scheduling techniques in association with the marketing department’s sales forecasts, find alternate suppliers for XXX raw material, maintain production at an average ninety percent of capacity.


W WW.MAUS.COM.AU

30


Strategy (Action Objectives)

Define what you intend to do with the business in terms of ownership, investors or succession. i.e. “We intend to sell the business in 5 years.” (Detailed strategies are included in the “Sell Your Business” book and software published by MAUS.

# 1

# 2

# 3

# 4

EXIT OR SHAREHOLDER INVESTOR PLAN20 to 20

STRATEGIES

Milestones, tasks or action objectives Who When

E.g. To collect a list of all trademarks, patents and domain names so the business appears well organised.

SK Last day


W WW.MAUS.COM.AU

31


Total Sales Objective

Sales objectives by product, market segment or any other variable that you care to use to measure your performance

# 1

# 2

# 3

# 4

MARKETING PLAN20 to 20

MARKETING STRATEGIES


E.g. To contact thirty lost customers every month. SK Last day


W WW.MAUS.COM.AU

32


Budget Sales

Budget Net Profit

Budget Gross Profit

Budget Expenses

FINANCIAL PLAN 20 to 20

FINANCIAL STRATEGIES


E.g. Apply for a $50,000 overdraft. PH 1/6


W WW.MAUS.COM.AU

33


Number of staff to be hired

Payroll Budget

Training & Human Resource Budget

ORGANISATIONAL AND MANAGEMENT PLAN 20 to 20

ORGANISATIONAL & MANAGEMENT STRATEGIES


E.g. Institute weekly sales training. CC 23/6


W WW.MAUS.COM.AU

34

Production Forecast

Plant Capacity

Production Costs

PRODUCTION PLAN 20 to 20

PRODUCTION STRATEGIES


E.g. Reduce reject rate by two per cent a month for three months. CL 28/9



W WW.MAUS.COM.AU

35


W W W.MAUS.COM.AU


step

Section 2.1

CASH FLOW STATEMENT


W WW.MAUS.COM.AU

38

CASH FLOW STATEMENT

Detailed descriptions of these statements are included in this manual. The Cash Flow statement is an extremely important document

which needs to be prepared on a monthly basis. A Cash Flow statement shows how much cash the business will have on hand. It only

takes into account when bills are actually paid and when monies are actually received. For instance, suppose that $100,000 worth of

goods is sold this month. Although this is registered as a sale this month, the money will not be physically received until next month

or even later. Therefore it won’t appear in the Cash Flow statement until the month it is physically received.

The same applies to expenses. An advertisement in the Yellow pages, costing $4,000 for the whole year, will only appear in the Cash

Flow statement when it is physically paid for.

It doesn’t matter how healthy the order book looks, if bills can’t be paid the business will fail.

Budget Actual Variance

OPENING BALANCE

Cash Inflow

Cash Sales

Cash from Debtors

Interest Revenue

Other

Total Available

Cash Outflow

Wages

Rent

Credit

Accounting Fees

Selling and Admin Expenses

Office Expenses

Purchases of Assets

Loan Repayments

Directors' Drawings

Total Outflow

CLOSING BALANCE


W WW.MAUS.COM.AU

39

CASH FLOW STATEMENT

W W W.MAUS.COM.AU


step

Section 2.1

INCOME STATEMENT


W WW.MAUS.COM.AU

42

INCOME STATEMENT

Income statements (also referred to as profit & loss statements) are important as they tell you whether or not you are making a profit. Businesses should prepare these statements on a monthly basis. Often, to simplify these reports, rather than trying to record the complex inventory movements, many businesses prepare their operational budgets by averaging out a cost of sales figure.

Budget Actual Variance

Sales

Less Cost of Goods Sold

Opening Inventory

Purchases

Duty on Purchases

Less Closing Inventory

Gross Margin

Add Miscellaneous Operating Revenue

Commission Revenue

Discount Revenue

Less Selling and Distribution Expenses

Advertising

Commission Expense

Delivery Expenses

Salaries - Sales

Vehicles

Depreciation on Showroom

Administration & Management Expenses

Audit Fee

Directors' Fees

Office Expenses

Salaries - Office

Telephone

Depreciation on Buildings - Office


W WW.MAUS.COM.AU

43

INCOME STATEMENT

Financial Expenses

Bad Debts

Doubtful Debts

Discount Expense

Interest on Debentures

Net Operating Profit

Add Non-operating Revenue

Profit on Sale of Surplus Equipment

Net Profit before Tax

Less Provision for Income Tax

Net Profit after Tax

W W W.MAUS.COM.AU


step

Section 2.1

OTHER INFORMATION

MONTHLY EVALUATION

&


W WW.MAUS.COM.AU

46

OTHER INFORMATION & MONTHLY EVALUATION

OTHER INFORMATION

Any other information that supports your plan should be included. The Appendices can be used to include such

things as brochures, customer satisfaction letters, PR releases, etc.


W WW.MAUS.COM.AU

47

OTHER INFORMATION & MONTHLY EVALUATION

MONTHLY EVALUATION

Two key elements of successful business planning are the allocation of tasks to individuals and the

accountability of those individuals. A business plan does not produce results because it has been written

down - results are produced when employees are given targets and performance goals for which they are

accountable.

Cop

yrig

ht

MA

US

Bu

sin

ess

Sys

tem

. All

righ

ts r

eser

ved

Section 2.2

Example of a

Most people find it difficult to get the feel for writing a business plan until they see an example.

The following pages include a sample business plan for “XYZ Company”. This company is a manufacturing organisation. No matter what type of business you are in, the general business planning principles will be the same.

SIMPLE BUSINESS PLAN

WWW.M AU S.COM .AU

W W W.MAUS.COM.AU


step

Section 2.2

THIS PLAN HAS BEEN BASED ON

THE PRODUCT WIDGET


W WW.MAUS.COM.AU

52

THIS PLAN HAS BEEN BASED ON THE PRODUCT WIDGET

A Widget is an imaginary name that could refer to anything. In this case the word Widget has been used to refer

to a product in the industrial market. This is an example of a simple plan.

Figures used throughout this plan are indicative only and do not refer to any industry norm. Wherever possible

figures will appear financially correct within the context of the plan presented but occasionally they will be different. For instance, some figures are used differently in different situations to help guide the reader through the content and workings of the plan. Similarly, for ease of reading and comprehension, in some sections of the

plan not all competitors, segments, etc. are shown.


W WW.MAUS.COM.AU

53

THIS PLAN HAS BEEN BASED ON THE PRODUCT WIDGET

W W W.MAUS.COM.AU


step

Section 2.2

BUSINESS PLAN XYZ COMPANY 201A-202D

SUBMITTED TO : THE VAULT BANK

LOAN APPLIED FOR : $250,000

REASON : CAPITAL EXPANSION

W W W.MAUS.COM.AU


step

Section 2.2

BUSINESS PROFILE



W WW.MAUS.COM.AU

58

BUSINESS PROFILE

BUSINESS OVERVIEW

UNIQUE FEATURES OF XYZ WIDGETS

SALES & PROFIT FORECAST

XYZ was incorporated in Statesville in 20XX. The company manufactures and distributes Widgets which it

makes entirely at its in-house manufacturing plant. The company has twenty employees at Head Office and one sales office, with two sales representatives, interstate.

XYZ has achieved an excellent reputation as a high quality supplier of Widgets. Widgets are protective casings

that are sold to manufacturers of motors. They protect the motor from the external environment offering

protection against water, temperature fluctuations, corrosion, dust, etc. It is estimated that a Widget can increase the life of a motor by almost a third.

This business plan has enabled XYZ to clearly see what business the company is in and where it is headed. In

doing so, the company has pinpointed some significant new product and market opportunities which could increase sales quite substantially. The company no longer sees itself as simply in the business of supplying

Widgets. It now sees itself in the business of “protecting and extending the life of motors”. By defining the business in this way the company has identified possible new services such as contract service agreements and training. It sees new product opportunities such as anti-corrosive paints and materials, lubricants and

other engine protection products that would fit well with its existing customer base. Instead of just supplying Widgets, XYZ will look to supply its customers with a whole range of goods and services.

XYZ’s Widgets are generally considered to be the best quality Widgets in the marketplace because of their high

temperature resistance and excellent waterproofing capabilities. Independent tests from the University of Widgets indicate that XYZ Widgets have an average life of five years whereas those of the competition have an average life of only three years.

Although sales have increased by ten percent a year over the last two years the company has not taken full

advantage of the market opportunities which have appeared. The company will, over the next period, adapt

its products and selling efforts to growing new markets whilst maintaining its market leadership in its existing

markets.


W WW.MAUS.COM.AU

59

BUSINESS PROFILE

PROOF THAT XYZ WILL ACHIEVE THIS LEVEL OF SALES

FORECAST SALES & PROFIT

It is anticipated that XYZ will achieve this increase in sales because:

* The company has increased sales by ten percent over the last two years and is geared for growth.

* The company has an excellent reputation and good customer base which can be relied upon to place future orders.

* Although the market leader, the company has never targeted the marine and heavy industrial equipment segments. These

markets are increasing at a substantial growth rate. A competitive analysis of XYZ has shown that the company has substantial

product benefits over the competition. It is estimated that XYZ can become a major player in these segments. The company will start running promotions to these segments commencing in the first quarter of this year.* The company will be placing more emphasis on markets that are in the growth and maturity stage of the product life cycle and

less on those that are in decline.

* Thirty percent of the current sales forecast has already been achieved with advance orders. This is eleven percent up on last

year’s figure.* Last year the company could not supply product for a two month period on two product lines. These production limitations will

be resolved by the installation of new machinery which will not only increase the capacity of the plant but increase the quality of the

product.

Last Year This year 201B 201C 201D

Sales (000's) $5,355 $5,831 $6,500 $6,900 $7,300

Gross Profit $1,874 $2,624 $3,900 $4,140 $4,380

% Gross Profit 35% 45 % 60% 60% 60%

Net Profit $107 $583 $975 $1,035 $1,095

0

2000

This Year

Sales Gross Profit Nett Profit

201B 201C

6000

4000

8000

W W W.MAUS.COM.AU


step

Section 2.2

MARKET AND COMPETITIVE PROFILE



W WW.MAUS.COM.AU

62


TOTAL MARKET

The total market for Widgets consists of just about any manufacturer of motors and mechanised equipment as

all these manufacturers need to have protective casings for their motors.

The Widget Association estimates that in the last financial year the total market for Widgets was $17.4m and growing at around 5% pa. XYZ’s current sales are approximately $5.8m which would equate to a 33% share of

the total market.

Market Segments: Within the total market XYZ has identified several different types of customers with different types of selling needs. These types of companies have been identified as

* Manufacturers of motors for the Marine industry.

* Manufacturers of motors for the Automotive industry.

* Manufacturers of motors for the Electrical industry.

* Manufacturers of motors for the Aeronautical industry.

* Manufacturers of motors for the Heavy Industrial industry.

NEW PRODUCT AND OPPORTUNITY. In addition to this traditional market, research by the marketing

department has also discovered that add-on products to the Widget and related markets of contract

maintenance, service parts, relocation and installation of equipment, lubrication, anti-corrosive and other

associated materials are worth around $50m a year. This is an area that XYZ could very easily diversify into to

rapidly expand the business.

The diversification into these other markets will be detailed in a report to be released next month evaluating these product opportunities. The rest of this plan will concentrate on getting the core of our business correctly

positioned to maintain and strengthen our 33% market share position.

WARNING: There are trends in the market that are undermining XYZ’s strong competitive position. The company must adapt to these trends now or face the consequences.


W WW.MAUS.COM.AU

63


GENERAL MARKET TRENDS

SIZE OF MARKET SEGM ENTS TODAY

Over the last five years there have been trends in the market that have led to the changing importance of the various market segments. In the past XYZ has always concentrated on the Automotive segment. Last year’s

Automotive segment was 50 percent of the total market. However, it can be seen from the pie chart below that

the automotive segment is rapidly declining due to legislation and tariff changes whilst other segments, such

as the Marine segment, are growing.

For XYZ to survive they will need to target their future efforts to the growing segments.

The Automotive industry’s decline from 50% of the market to 35% is primarily due to two of the largest

manufacturers shutting down their operations and moving their plants offshore. The Marine and Heavy

Industrial equipment segments have increased in relative importance significantly over the last five years. These trends are expected to continue over the next few years.

XYZ has traditionally focused on the Automotive industry. Over the next few years XYZ will start to direct more

programs at these other two growing segments. XYZ can gain a considerable share of these two segments

because of the superior technical capabilities of their Widgets.

35%

25%

5%

10%

25%

AUTOMOTIVE

MARINE

ELECTRICAL

AERONAUTICAL

HEAVY INDUSTRIAL


W WW.MAUS.COM.AU

64



XYZ will begin a detailed program to reduce the impact of our manufacturing on the environment. We will

reduce this at both the production and office areas. Our three main initiatives at production level will include. 1. Changing suppliers to those that comply with the strict environmental criteria.

2. Changing our waste removal process

3. Recycling some of our wastage back into production.

Our three main initiatives at the office level will include. 1. Recycling of all garbage.

2. Establishment of paper recycling and usage of double sides for draft material.

3. Implementation of power saving through the re-alignment of computer and lights and the

training of staff.


W WW.MAUS.COM.AU

65



XYZ Widget Sly Widget ABC Widget

Price Strategy

Retail Price $615 $500 $595

Payment Terms 30 days 7 days 7 Days

Product Strategy

Temperature Resistance 180C 120C 120C

Waterproofing Excellent Poor Excellent

Reliability Excellent Medium Medium

Product Life Average 5 years Assume 3 years Assume 3 years

Country of Origin Local Imported Local

Promotion

No of Reps 8 5 10

Advertising Appeal "The Best" "When you need a durable Widget buy Sly"

"The specialist marine Widget experts"

W W W.MAUS.COM.AU


step

Section 2.2

STRATEGICDIRECTION



W WW.MAUS.COM.AU

68

STRATEGIC DIRECTION

TARGET MARKET

PRODUCT POSITIONING

STRATEGY HIGHLIGHTS

Based on these market trends and profiles of the business and competitors it has been decided to concentrate XYZ’s efforts toward the following segments.

* Marine industry motor manufacturers

* Automotive motor manufacturers

* Heavy industrial equipment motor manufacturers.

Generally, the product will be positioned as the highest quality Widget in the market. XYZ has recognised the

problems associated with mass marketing and will position the product slightly differently in each segment.

Marine segment : The company will emphasise the superior waterproofing capabilities of XYZ’s Widgets.

Automotive segment : The company will emphasise the overall high quality of its Widgets

and the flexibility of XYZ to customise orders to meet customer’s requirements.

Heavy industrial segment : The company will emphasise the durability of the product.

The specific strategies and actions for each major area of the business are explained over the next few pages.

Marketing strategy highlights:

XYZ will better position and target products to growth markets over the next planning period. The company

will strengthen its sales performance in various sales territories through the use of defined strategies which are detailed in the marketing plan.

Production strategy highlights:

Over the next year the company will upgrade the plant by purchasing a new Widget machine. It will remove the

current major bottlenecks in production and reduce the Widget reject rate to ten percent.


W WW.MAUS.COM.AU

69

STRATEGIC DIRECTION

LOAN

SHAREHOLDER STRATEGY

Organisation and management strategy highlights:

Over the next period XYZ will employ five full time and two part time staff. The company will concentrate on developing overall policies and procedures in all areas. A training needs analysis will be conducted.

Financial strategy highlights:

The company will increase gross margin to forty-five percent which will result in a strengthening of the bottom line. Emphasis will be placed on consolidating and reducing debts to help fund new capital expansion.

The company is requesting a loan of $250,000 to finance purchase of a new Widget machine. The improved profitability generated by the improved efficiency of the Widget machine will see a 2 year return on investment on this investment.

Peter Thompson is a 100% shareholder of the XYZ business.. Peter is looking at retiring in the next 3 years and

consequently is wishing to maximize the value of the business. Peter Thompson will implement a series of actions now so that there will be minimum stress on the business when this succession is affected.


W WW.MAUS.COM.AU

70

STRATEGIC DIRECTION

MARKETING NEXT YEAR'S OBJECTIVES

Total Sales of Widgets To increase sales by 10% to $5.83m.

Sales Objectives by Market Segment.

Automotive Segment To increase sales from $4.016m to $4.373m

Marine Segment To increase sales from $.268m to $.291m

Heavy Industrial Segment To increase sales from $.536m to $.583m

Other To increase sales to $.584m

MARKETING MILESTONES OR MAJOR TASKS OR

ACTION OBJECTIVES

WHO(Person responsible)

WHEN (Date to be completed)

Promotional Strategies

Print Advertising Develop a corporate brochure. HB June 201A

Advertise monthly in magazines that are specifically targeted to production managers in the automotive, marine and heavy industrial segments.

HB Jan 201A

Advertise monthly in magazines that are aimed at production managers in the general industry.

HB Jan 201A

Advertise quarterly in magazines that are aimed at purchasing officers.

HB Jan 201A

Lead Generation Program Conduct monthly on-going lead generation program. Send out monthly direct mail leaflets with response coupons. Qualify leads and make appointments by using telemarketing staff.

JL Oct 201A

"Centres Of Influence" Program

Personally contact at least ten production consultants each month.Produce a monthly newsletter that shows examples of Widget applications in various companies

JL Oct 201A

MARKETING STRATEGIES


W WW.MAUS.COM.AU

71

STRATEGIC DIRECTION

PR Program PR release to be initiated each month to various trade journals and magazines.

HB Jul 201A

Sales Force Employ two telemarketing staff. BC Sep 201A

Employ sales specialist for marine segment. HB Mar 201A

Implement a new structural program for the sales force, allocating sales reps to accounts and segments rather than area.

JL Jan 201A

Organise training program to be implemented at sales conference.

KM Jan 201A

Lost Customers Contact monthly all past customers that have not re-ordered to ask why not and see whether we can win back their business.

LN Dec 201A

Follow up Enquiries Contact all enquirers monthly and determine if they have purchased from a competitor and, if so, why.

LN Dec 201A

Existing Customers Follow up all new customers two weeks after they purchase to ensure they are satisfied with the product.

LN Jul 201A

Send quarterly newsletter to existing customers to keep them informed of our other products.

LN Jan 201A

Try and up-sell all enquiries for our standard range to our premium range.

LN Feb 201A

Sales Promotion Develop an ongoing sales promotion to target existing customers.

LN Aug 201A

Online Promotion Increase Search Engine Optimisation of the website to improve rankings in major search engines to increase trafficIncrease the use of Pay Per Click through sponsored sites, search engines, advertising networks, websites and blogs to improve hits on our website

LN Jan 201A


W WW.MAUS.COM.AU

72


Supply Maintain a maximum of one week to dispatch from date of order.

CQ Jan 201B

Warranty Extend the warranty from one year to three years. CL Jan 201A


Price Level Maintain price level in all segments at 10% higher than competitors to reinforce the quality image.

PH Jul 201A

Discounts Offer a 5% discount for payment with order. PH Jul 201A

Manufacturers Agents Pay a 15% commission on retail price of all confirmed sales orders passed to us by our manufacturer’s representatives.

PH Jul 201A


Channel Distribute direct to the client where possible. Use manufacturer’s agents in outer regions.

CQ Apr 201A


Competitor Profile Keep updated competitor profile. PH Jun 201A

Marketing information system

Document on every enquiry “How did you hear about us?”

DR Jul 201A

Document on every order “How did you hear about us?”

DR Jul 201A

Produce monthly sales reports by product, by market segment, by territory and by sales representative.

DR Mar 201B

STRATEGIC DIRECTION


W WW.MAUS.COM.AU

73

STRATEGIC DIRECTION

PRODUCTION NEXT YEAR'S OBJECTIVES

Production Forecast To produce 10,025 units over the next year.

Plant Capacity To operate at a total of 90% plant capacity for the year.

Production Costs Reduce production costs by 8%.

PRODUCTION STRATEGIESMILESTONES OR MAJOR TASKS OR ACTION

OBJECTIVES



New equipment purchase Purchase new Widget machine. CL Mar 201A

Installation of new equipment

Have new equipment installed and running at full capacity.

CL May 201A

Production scheduling Remove major bottlenecks. CL Feb 201A

Quality rating Company to reach AAA standard. CL Feb 201A

Quality control 100% of Widget Premium to be audited.10% sampling of other products.

DM Jun 201A

Reject rate Reduce reject rate from 12% to 5% over the next year.

DM Jun 201B

Raw materials Reduce raw materials costs from 38% to 36% DM Jun 201B

Research and development Adapt new Widget technology into present production.

CL Jun 201A

Technology transfer Prepare a plan showing how the company can adapt the new technology to other existing products and spin-off products.

CL Dec 201A

Inventory level Reduce the inventory level to eight turns per year. DM Jun 201A

Production procedures and policies manual

Develop detailed procedures and policies manual detailing production processes, times, materials, man hours, etc.

DM Jan 201A

Environmental Suppliers Review suppliers based on environmental criteria as well as price and quality

CL Jan 201A


W WW.MAUS.COM.AU

74

STRATEGIC DIRECTION

PRODUCTION NEXT YEAR'S OBJECTIVES

Net Profit To achieve forecast net profit of $583,000.

Gross Profit To increase the average gross margin for all products from 35% to 45%.

Budget To not exceed the following expense budgets.Production budget $1,000,000Marketing Budget $ 500,000Payroll Budget $ 790,000Management Overheads $ 890,000

FINANCIAL STRATEGIES



Cash Flow Eliminate cash shortage in the traditional tight periods of December to January

PH Jun 201A

Collection Days Reduce the average collection days from 45 days to 30 days.

PH Jun 201A

Payment Days Maintain current payment of bills, on average, to 30 days.

OJ Jun 201A

Expenses Develop and implement new policies on approval and signatories on expenses.

PH Mar 201C

Leases Pay off the existing lease on capital equipment, thus reducing the monthly financial burden.

PH Jun 201A

Overdraft Reduce the overdraft from $50,000 to $30,000. PH Jun 201A

Wages Pay all wages on a monthly basis instead of weekly. OJ Jan 201A

New Equipment Organise funding for the $500,000 expenditure on new equipment.

PH Jan 201A

Payback Ensure a payback on new equipment through sales of one year.

NI Jun 201B

Inventory Improve the number of stock turns to eight a year. DM Jun 201A


W WW.MAUS.COM.AU

75

STRATEGIC DIRECTION

Rent Negotiate new terms on the premises and reduce existing payments by 10%

NI Aug 201B

Bank Charges Renegotiate with the bank and consolidate some outstanding loans with lower interest rates.

NI Aug 201B


W WW.MAUS.COM.AU

76

ORGANISATIONAL AND MANAGEMENT NEXT YEAR'S OBJECTIVES

Budget To not exceed the payroll budget of $790,000

Staff To employ or re-deploy a total of eight full-time and part-time staff over the next year.

HUMAN RESOURCE STRATEGIES

MILESTONES OR MAJOR TASKS OR ACTION OBJECTIVES




0rganisational Draw organisational chart. MT Aug 201A

Develop incentive scheme related to job require-ments.

MT Aug 201A

Policies and procedures Develop policies and procedures manual. BC July 201A

Employ or re-deploy staff Employ two machine operators. MT Mar 201A

Employ one quality control sorter. MT May 201A

Employ two telemarketers. BC Sep 201A

Employ one specialist marine salesperson. BC Mar 201A

Employ one marketing assistant. BC Feb 201A

Employ one accounts receivable person. PH Jul 201A

Training Carry out a training needs analysis. MT Jan 201A

Morale Install suggestion box. MT Jan 201A

Organise monthly meetings to follow up tasks MT Jan 201A

STRATEGIC DIRECTION


W WW.MAUS.COM.AU

77

STRATEGIC DIRECTION

W W W.MAUS.COM.AU


step

Section 2.2

FINANCIALS



W WW.MAUS.COM.AU

80

FINANCIALS

This business plan should include a cash flow and a profit and loss budget. A detailed example of these statements has been included in Section 4.6. Please read this section for more information on how to prepare

your financial statements.


W WW.MAUS.COM.AU

81

FINANCIALS

MAUS Business Systems (Corprat Pty Ltd trading as MAUS Business Systems)

ABN 5508 4644 208. We abide by the privacy act.

W W W . M A U S . C O M . A U

1300 300 586

[email protected]

www.maus.com.au

Documents

Get started Now - maus.com.au€¦ · section 2.1 section 2.2 the simple question template business plan example of a simple business plan business profile ..... 09