business plan
... The reason ‘Magnetic Sports’ was chosen as the business name was to reflect the nature of the business. ... The reason for this business plan is to formalise the current business activity that these two individuals have been engaging in, informally, since March 2002, and grow into a reputable business which enjoys the recognition by a greater market share. Our strategy for success is embedded in our distinct business model. We plan not only to provide sports equipment, but to do it at competitive prices by exploiting India’s cheap labour and we plan to offer sports training/coaching and to provide that at a discounted rate to our customers. ... Magnetic sports will start business mainly in Leicestershire, where the majority of the networks have been created by Mr. ... Subsequently, a customer acquisition plan will be the main focus of the business in its initial stages. ... Sisodia’s home garage, which serves as the business warehouse to-date. Upon the business reaching a certain size, a warehouse will be rented to store the sports equipment. ... 1 Introduction The name of the business is Magnetic Sports. It currently exists, but the name is not registered and no formal steps towards establishing the legal ownership of the business have been taken. However, the business activity has been prevalent since March 2002. ... Sisodia’s educational commitments they have not been able to give their full effort into the business and consequently it has had to take the back seat to their important university commitments. Fortunately, both of them graduate this summer (2003) and are both ready to put in all their effort in this business. It has been decided that the business will remain to have unlimited liability as a partnership. ... This view is taken on the basis of the success of the business since it started trading in March 2002. The location of the business is currently at 81 Balderstone Close, Leicester. ... The idea for the business and the success of it is mainly down to the activities of Mr. ... Noor, a friend, saw the opportunities in his activities and approached him with the idea to make this enjoyable activity into a business. ... However, the long term forecast is to make a profit, which is a feasible according to the profit performance since March 2002, when business activity began. ... One of the strategic goals of the business is to experience high growth and profit maximization through the traditional brick and mortar process. ... This decision has been taken, since the longevity of online business can be risky and expensive and thus, forming a company and having limited liability protects us and our future investors from being personally liable for creditors’ payments if bankruptcy was to follow from trading online. ... Other unique factors of the business is that the quality of the product is extremely high, for example the average UK bat lasts approximately ¾ of season, but the vampire bats have estimated usage of 2-3 years with problems. ... However, there are vast amounts of competitors in the sports equipment side of the business such Gray Nicolls, Slazenger, VKS sports, Newberry, County and many more. ... Sisodia are currently taking orders and are being shown interest from plenty of sources and they are both anxious to finish university and put all their efforts into making this business succeed by serving the eager market that awaits them. ... 2 Product/Service Strategy Our strength as a business pivots itself on our product and service strategy. ... Once we are satisfied that the high quality of products are well-known, we will then begin to increase the prices in order to meet the extra costs of our growing business. ... 5 Advertising and Promotion Strategy To-date, we have used word-of-mouth to get our business recognised and known for its activities. ... This promotional material will include a booklet which will highlight our business’ products and services. ... They will have to pay by either: - cash - cheque An electronic point-of-sale (POS) machine will be purchased in 2005, if the business is successful to that date and it can be afforded. ... The factors that are critical for our business concept to work are that individuals and organisations need to understand that the products and services that are being offered by our organisation are of the highest quality, and provide a first class after sales service. ... 2 Development Timeline We plan to have the site up and running by the end of July 2003, but the products that we have already imported, have begun to sell in the UK. ... We have also looked into future ideas that the business could diversify into. ... 1 Business Organization Magnetic Sports will be equally owned by Mr. ... Sisodia will keep account of the business’ finances Marketing – Mr. Noor will take responsibility of the distribution of the business’ promotional literature and the strategic management of the warehouses. Below, we have illustrated our business structure through an organisational chart. ... His other major role is the creation and dispersing of the business’ promotional literature. ... He will act as the web editor for the content of the business website too. ... Vijay’s other main duty will include the accounts of the business, which is critical in the business. ... Year One Analysis: In the first year, we will start the business. Thus, we will have to register the name of the business and also purchase the domain name for the business’ website. ... The business’ ownership will be contractulised by forming a partnership agreement through a solicitor service. ... Before the business is started, several insurances must be purchased. Employee liability insurance, business insurance, cash cover insurance and insurance for goods will be sought. ... Sisodia, since they will be the only two employees of the business in the first year. ... The business van will also have to be maintained, through the purchase of road tax, insurance, MOT and the servicing of the van throughout the year. ... The reason for this is so that concentration will be given to making a success out of the layout of the business that has occurred in the first three years. ... Start-up Costs: £ Internet Domain Name 30 (one year cover) Internet Hosting Service 450 (one year cover) Two Mobile Phone Handsets 100 (one-off payment) Registration of Business Name 250 (one-off payment) Partnership Agreement 50 (one-off payment) Employee Liability 250 (one year cover) Business Insurance 250 (one year cover) Cash Cover Insurance 600 (one year cover) Insurance for goods 60 (one year cover) Premise/Storage 360 (one year cover) Total 2400 Operating Costs: £ Petrol/Delivery 1500 pa Salary 20000 pa for two N. ... Contributions 1200 pa for two (6% of monthly salary) Phone Bill: Rental 900 pa for two Call Charges 100 pa for two Internet Domain Name 30 (one year cover) Internet Hosting Service 450 (one year cover) Insurance for goods 60 pa Employee Liability 250 pa Business Insurance 250 pa Cash cover insurance 600 pa Solicitor Fees 100 pa Accountant Fees 100 pa Hosting Service 450 pa Merchant Account 100 pa Vehicle Maintenance 650 pa Admin/Stationary 500 pa Internet Connection 300 pa Stock 36000 pa VAT 6300 pa Customs and Excise Duty 800 pa Packaging 160 pa Premise/Storage 360 pa Promotional Literature 500 pa Total 71690 Please note that the Insurance for goods, Employee Liability, Business Insurance, Solicitor Fees, Accountant Fees, Hosting Service and Domain Name costs are both start up and operating costs because they will be incurred every year. So it can be said that the total expenditure in the first year will be: Start-up costs + [operating costs – (the Insurance for goods, Employee Liability, Business Insurance, Hosting Service and Domain Name, Cash cover insurance and the cost of premise/storage) = Total year one expenditure 2400 + [71690 – (60 + 250 + 250 + 450 + 30 + 600 + 360)] = £72,090 A cash flow forecast, balance sheet and a pro forma profit and loss account will now be presented. ... By doing this exercise, we can plan contingencies for such undesirable times. The presentation of the balance sheet will is presented to show the current value of the business for potential investors interested in this information as well as helping Mr. ... Sisodia plan for the future and keep tabs on what they own. ... Contributions 1200 Phone Bill: Rental 900 Call Charges 100 Internet Domain Name 30 Internet Hosting Service 450 Insurance for goods 60 Employee Liability 250 Business Insurance 250 Cash cover insurance 600 Solicitor Fees 100 Accountant Fees 100 Hosting Service 450 Merchant Account 100 Vehicle Maintenance 650 Admin/Stationary 500 Internet Connection 300 Stock 36000 Customs and Excise Duty 800 Premise/Storage 360 Promotional Literature 500 Total Operating Expenses 71690 Other costs/income Start-up Costs: Two Mobile Phone Handsets 100 Registration of Business Name 250 Partnership Agreement 50 Total other costs 400 Profit before interest & taxation 38300. ... Net profits for the financial period March 2003 to March 2004 has been retained by the business and not taken by Mr. ... This has been decided so that Magnetic Sports can be helped to grow as a business. ... 5 Insurance for goods 60 0 0 0 0 0 0 0 0 0 0 0 Employee Liability 250 0 0 0 0 0 0 0 0 0 0 0 Business Insurance 250 0 0 0 0 0 0 0 0 0 0 0 Cash cover insurance 600 0 0 0 0 0 0 0 0 0 0 0 Solicitor Fees 0 0 25 0 0 25 0 0 25 0 0 25 Accountant 0 0 0 0 0 0 0 0 0 0 0 100 Merchant Account 0 0 25 0 0 25 0 0 25 0 0 25 Vehicle Maintenance 0 650 0 0 0 0 0 0 0 0 0 0 Admin/Stationary 41. ... 0 Offerings It is evident, from the cash flow forecast, that the first month of business is going to be the most difficult and the business would require a bank overdraft of £11,000 to cope with the start-up and stock purchases. After this point the business is fairly self sufficient in terms of capital and will be able to repay the overdraft and have extra finances to purchase more products for the business to diversify into other areas if need be. From the graph on section , the business has huge fluctuations in closing balances, a major long term goal will be to stabilise these fluctuations and for the business to achieve steady growth.