This business plan outlines the opportunity, sales and marketing strategies, operational structure, and financial plans for a cocoa beans factory. It includes a written and visual pitch, target market analysis, and opportunity testing plan.
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Running Head: Business Plan 1 Project Report: Business plan
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Business Plan 2 Contents 1.0 Business plan pitch:....................................................................................................3 1.1 Written pitch:..........................................................................................................3 1.2 Visual pitch:............................................................................................................3 1.3 Backer reward.........................................................................................................4 2.0 Business opportunity..................................................................................................5 2.1 Customer need........................................................................................................5 2.2 Target market:.........................................................................................................6 2.3 Relevant megatrends...............................................................................................6 2.4 Similar successful campaign...................................................................................8 2.5 Opportunity testing plan.........................................................................................8 3.0 Sales and marketing opportunity................................................................................8 3.1 Fundamentals..........................................................................................................8 3.2 Social media and free publicity..............................................................................9 3.3 Measurement and information..............................................................................10 4.0 Operational strategy..................................................................................................10 4.1 Operational structure............................................................................................10 4.2 Outsourcing...........................................................................................................11 4.3 Operational risk....................................................................................................11 5.0 financial plans...........................................................................................................11 5.1 P&L and balance sheet:........................................................................................11 5.2 Capital requirement and funding plan:.................................................................12 5.3 Valuation and justification:...................................................................................13 References.......................................................................................................................14 Appendix.........................................................................................................................15
Business Plan 3
Business Plan 4 1.0 Business plan pitch: 1.1 Written pitch: “Cocoa beans factory” is a new business idea which would offer varieties of chocolates and fresh coffee beans in the market. The market study and market trend explains that the demand of cocoa beans and chocolates would never be lower in the market as there are various health benefits of these products. A study explains that the people would never lose their interest in the chocolate because if its various health benefits, trends and the taste of the chocolate. In Australian market, there is lesser option for the pure chocolate. Hence, in this business the cocoa beans and pure chocolate would be imported from Belgium market and it would be packed by “Cocoa beans factory” in different flavours and in different quantity. Company would also offer the customized packaging to its customers according to their demand and the flavours they required. This business feasibility explains that the business would offer high profits and stability in future as the demand would be increased day by day and the customer base of the company is also quite larger. The main vision of the business is to become the leader in the chocolatier industry in the company and then expand the business to overseas through emphasizing over the perfection, quality and excellence of the chocolate (Quattrone, 2016). Company always works on creating the indulgent and finest chocolate with adding the new innovation and flavours into it. the mission strategy of the company explains that the owners of the company are quite passionate about art of chocolate making and hence, they always starves to create perfect premium chocolates for their customers which will put a smile on their customer’s face and will give them a thought of satisfaction. Finest quality beans would be used by the company to prepare the premium chocolate. Passionate, meticulous and innovation are the key factors of the business. 1.2 Visual pitch: The company would offer its products in different ways such as the packaging of the product would be done in small packets or family packets, along with that, various flavours would also be offered by the company to its customers. Few samples of chocolates are as follows:
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Business Plan 5 (Source: Author) Company also offers an option to its customers in which they could customize the chocolate box according to their demand. In a single box, various flavours could be offered to the customers. Company also has various gifts packaging option and it is quite common nowadays to gift chocolate to someone. Hence, it explains that the demand of the product would surely be higher in the market. 1.3 Backer reward Funding the funds for the business is the main part to start a business. Without the availability of required funds, a business can never start and run smoothly. Through the study, it has been recognized that there are few rewards which could be given to backers to reduce the cost of the business and cover all the different group of backers at one go: Digital gratitude:
Business Plan 6 Many of backers are always ready to throw few bucks. All the business need is to send some appreciation letter, thank you note and a digital copy of the business which can be printed out (Mihm, 2010). Access: Kick-start backers are the people who join the business at early start and they always are very supportive and they offer exclusive access to the entrepreneurs to become more efficient. A private event or different incentive scheme could motivate them towards the interment in the business. Original art: Original art is most powerful in order to incorporate the backers into process and set a unique memento for the business. It is required for the business to show the kick-starts about their innovative idea and long term goal to attract them towards the business (Hussey, 2010). Carefully considered merchandise: It is important for the business to set a better merchandise process to sell the products and services in the market. The merchandise process of the business must be well designed and it should not affect much on the bank of the business. 2.0 Business opportunity 2.1 Customer need: Through the years, it has been estimated and analyzed that the demand of chocolate products has been higher in the market due to its health benefits, flavour intensity, sourcing, value, increment in the number of chocolate lovers. The study explains that through the years, the customer shopping habits have been changed and nowadays they prefer to offer the premium products to their friends. Earlier, they used to buy all the products from the supermarket but now they have recognized the importance of premium and hence, they prefer to buy the products from better places, such as, they prefer to eat at the place which offers finest food. The cravings, culture etc have also affected the customer’s need. On the basis of study on consumer and their needs, it has been recognized that the business of chocolate and cocoa bean would be improved in near future as all the products are
Business Plan 7 offered by the business according to their customers demand and nature. Along with that the innovation and creativity with flavour would never push the business towards decline stage. The product life cycle of the business would always be at growth stage because of these factors. 2.2 Target market: Target market of the company would be the people who love chocolate and the company should focus on the different taste and different flavour for different target market. Company could also target the customers who wished to use the chocolate as a part of gift. Along with the increment in the knowledge about health, the people prefer the chocolate and hence, the company should advertise and present its products as the healthier product for their customers and ask their target people to have it as a healthier snack (Lysons & Farrington, 2012). The target market of the company is entire Australian market, company would offer different packaging, flavours and other options according to their customer’s needs so that the entire market could be grabbed by the market. Majorly, chocolate companies only focus towards the children because of their taste buds and love for chocolate but this reduces the target market and profitability share of the market. Hence, company has decided to come with various products in the market so that the different group could be targeted. Such as company has planned to introduce diabetic chocolate, weight lose chocolate etc. 2.3 Relevant megatrends The study explains that various megatrends have come in the existence in the recent chocolate market. Few of them have been discussed as follows:
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Business Plan 8 (Confectionery news, 2019) Shifts in behaviours: It has been found that the environment is changing rapidly and along with that the customer’s behaviour is also changing, customer have become aware about their health, activities and worth of the product and hence it has become quite important for the “Cocoa beans factory” to study over the customers behaviours and trends in the market so that the better product could be offered to the public accordingly. Potential future application:
Business Plan 9 Study explains that the number of chocolate customers is increasing day by day because of various health benefits and innovation in the industry. Hence, it is important for the business to keep a track over the people and attract them towards the business in order to improve the market base and overall performance of the business (Messner, 2016). Creating more intimate experiences: “Experience more” megatrends have become quite successful. Prioritize the experience over the passion has become new trend in the market. Company is required to focus on this trend to become more successful in the market. 2.4 Similar successful campaign “Cocoa brand factory” could plan a private event in which various crowd sourcing would be done by the company to improve the funds and improve the overall performance of the business. The company would tell about the pitch, vision, mission, objectives and aim to the crow funders to attract them towards the business so that the base of funds could be improved and the overall performance of the business could be managed (Mihm, 2010). Company could also explain them about their marketing and financial plans for next 2 years to make them understand about the customer base, market share and profitability level. 2.5 Opportunity testing plan A market feasibility study has been conducted in the market to measure that how much time it would take by the company to come in the market and run their business. The raw material would be imported by the company from Belgium market. Entrepreneurs have already talked to the supplier and according to the planning; the business would be able to run its operations by the starting of first week in the July month. It further explains that the proper planning of place, packaging, innovation creativity etc have been done by the company. Company is directly planning to take raw material from the farmers so that the cost f middle man could be saved. Also, the inventory would be ordered by the company in such a way that economical order could be done and the additional cost of the business could be saved. 3.0 Sales and marketing opportunity 3.1 Fundamentals:
Business Plan 10 Sales and marketing process is one of the essential processes in a business to improve the market base, number of selling units and profitability level of the business. In order to improve the marketing base, company has planned to follow the below process: Place: “Cocoa business factory” would be opened by the company in the market of Melbourne because from here, it would be easier for the company to capture the entire market and from here, company would plan to open new branch in the market of Sydney. Place is essential part of marketing strategy and hence, company has conducted proper research and study to choose this place for their store (Jeffrey, 2018). Price: “Cocoa business factory” would follow the penetration marketing strategy. In which, initially, the products would be offered in the lower prices, but along with the time, the prices of the product would be improved. This strategy would help the company to attract the customers at first instance and then make them loyal towards the brand. Promotion: Promotions are the main tactics of the business. “Cocoa business factory” would use the social media, local newspaper and local hoardings to promote the product in the market. Also, the company is planning to open a website through which the customers could place the order and the product would be delivered to them. Website is also open for the feedback so that the changes in the product could be done accordingly (Koropp, Kellermanns, Grichnik & Stanley, 2014). Product: The “Cocoa beans factory” would offer varieties of chocolates and fresh coffee beans in the market. Company would also offer the customized packaging to its customers according to their demand and the flavours they required. 3.2 Social media and free publicity Social media marketing: Social media marketing is one of them most used marketing platform nowadays. Company would promote its chocolates and other products through its Instagram handle,
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Business Plan 11 twitter account, Facebook and the company’s own website. It is easier for the business to influence the customers through social media and the amazing discount through riding the social media account would attract the customer more towards the business. Special discount announcement on different occasion such as Christmas would also enhance the overall sales and profitability level of the business. Free publicity: Social media marketing is quite expensive for the business. Hence, the company could also use the free publicity stunt to let the target people know about the company and its huge variety of chocolates. Company could introduce itself as the best premium chocolate store in the Australia market. Different is always great and attracts the customers more towards the business (Hussey, 2014). It has been studied that this publicity has helped various brands to get instant improvement in the sales. 3.3 Measurement and information: Planning a business always require proper idea about the market and the way through which sales would be done by the business. On the basis of the study, it has been recognized that the discounts are always appealing for the customers so that prices of the product would be bit higher and the discount would be offered on that product to attract the customers towards the business and identify the total sales on the basis of that. 4.0 Operational strategy: 4.1 Operational structure The operational structure of the business would be as follows:
Business Plan 12 (Higgins, 2012) Proper work would be divided to all the above stated people according to their experience and their expertise in order to run the business smoothly and improve the performance of the business. 4.2 Outsourcing “Cocoa factory business” is focusing on offering the premium quality chocolate and cocoa beans to its customers. In order to provide the same, finest quality of beans are required by the company. Hence, the company would outsource the pure chocolate and beans from the Belgium market. Also, the other process would be handled by the business itself. Company has enough efficient and employees who are experiences enough to make some innovation and creativity in the chocolates and offer them in the attractive packaging (Higgins, 2012). 4.3 Operational risk “Cocoa factory business” idea explains that it would be a wonderful business and offers higher profitability to the stakeholders for a longer period. But along with that, there are various risks which could be faced by the business. Few of them are as follows: 1.Employee retention 2.Supplier issues 3.Changes in the rules and regulations of important and export John (CEO of the business) Harry (Head innovator and creator) Shawn (Marketing manager) Elian (Operational and financial head)
Business Plan 13 4.Licence and permits 5.Funds issues 6.Competition 7.Limited funds (Chandra, 2011) Company has prepared the mitigation plan for all the above stated issues in order to save itself from instant losses and manage the business. 5.0 financial plans: 5.1 P&L and balance sheet: On the basis of the overall study over the business and its profit and loss statement account, it has been measured that initially the sales of the business would be around $ 50,000 but along with the time, sales would be increased by 25% each year. Further, it has been observed that the company could also earn little revenue through offering the franchise in the market. Different discount would be given to the customers of the company to improve the sales of the business (appendix). The profit and loss statement for next 3 years explains that the net sales would be improved and long with that, the cost of sales of the company would also be improved. However, in terms of gross margin rate, the % would be 61.9%, 65.56% and 60.21%. At the end of the 3rdyear, gross profit % would be reduced because of the few changes in the business and introduction of new products in the market (Higgins, 2012). On the basis of overall study over the profit and loss statement brief that the net profit of the company would be improved at great extent and it would help the business to grow further and meet the mission and objectives of the business. Further, the balance sheet statement explains that initially the current assets of the business would be around $ 129,300 but along with the time, it would be reduce to manage the liquidity position of the business. Further, it has been observed that the total assets of the business would be lower in the 2ndyear because of the lower cash in hand (appendix). The balance sheet statement for next 3 years explains that the overall solvency and liquidity position would be improved and along with that, the financial position company would also be improved. However, in terms of ratios, the position of the company is improved year by year (DemaMoreno, 2009).
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Business Plan 14 On the basis of overall study over the balance sheet statement, it has been found that the overall financial position and solvency position of the company would be improved at great extent and it would help the business to grow further and meet the mission and objectives of the business. 5.2 Capital requirement and funding plan: The company would require around $ 9450 to run the business smoothly. the capital requirement table is as follows: Income sourcesSell of food items Sell of beverages Number of employees5 employees (salary of each emeployee is $ 300.) Projected invetsment in equipment and material$ 1000 Projected R&D cost$ 800 Deprecitaion allowed forMachinery and equipment @ 10% (SLM) Expected rent and rates charges$ 550 Creditor days expected and debtor day allowedCreditors tunrover days = 58 days Debtors tunrover days = 10 days start up Expenses calculationsRent Deposit550$ Furniture & Fixtures1,500$ Equipment1,000$ Buildout/ Renovations800$ Decorating, Painting and Remodeling800$ Installation of Fixtures & Equipment200$ Starting Inventory2,200$ Legal and Other Professional Fees1,000$ License and Permits300$ Advertising and Promotion800$ Consulting300$ 9,450$ the funding would be done by the company as follows:
Business Plan 15 Shareholders nameJohnHarryShawnElian Number of share800500500700 % shareholding32%20%20%28% Cash investment4,800$3,000$3,000$4,200$ 5.3 Valuation and justification: The valuation and justification of financial statement and projections of the company has given in the appendix.
Business Plan 16 References: Chandra, P. (2011).Financial management. Tata McGraw-Hill Education. Confectioney news. (2019). 20 most influntial megratrends to shape the world. (online). Retrieved from: <<https://www.confectionerynews.com/Article/2017/09/07/Euromonitor-20- megatrends-to-shape-the-world-by-2030>> DemaMoreno, S. (2009). Behind the negotiations: Financial decision-making processes in Spanish dual-income couples.Feminist Economics,15(1), 27-56. Higgins, R. C. (2012).Analysis for marketing management. McGraw-Hill/Irwin. Hussey, D.E., (2007).Strategic Management: From Theory to Implementation, UK: Taylor and Francis Hussey, R. (2014).MBA Accounting1sted. U.K: Macmillan International Higher Education. Jeffrey, J. (2018).Research on Professional Responsibility and Ethics in Accounting1sted. U.K: Emerald Group Publishing. Koropp, C., Kellermanns, F. W., Grichnik, D., & Stanley, L. (2014). Financial decision making in family firms: An adaptation of the theory of planned behavior.Family Business Review,27(4), 307-327. Lysons, K. & Farrington, B. (2012).Purchasing and supply chain management, Harlow, Essex: Pearson Financial Times Messner, M. (2016). Does industry matter? How industry context shapes management accounting practice. Management Accounting Research, 31, 103-111. Mihm, (2010).Fast Fashion in a Flat World: Global Sourcing Strategies. International Business and Economics Research Journal, 9 (6) pp 55-63 Quattrone, P. (2016). Management accounting goes digital: Will the move make it wiser?.Management Accounting Research,31, 118-122.
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Business Plan 18 Profit and Loss Statement YearJul 19Jul 20Ju;y 21 Income Sales Sale of goods/services50,000.00$62,500.00$78,125.00$ Sundry Income (e.g. Commission earned, frachise fees etc.)500.00$15,000.00$5,000.00$ Etc.500.00$500.00$700.00$ Total Sales51,000.00$78,000.00$83,825.00$ Less Discounts/Commissions Sales Discounts given2,500.00$3,125.00$3,906.25$ Sales Commissions paid1,250.00$1,562.50$1,953.13$ Total Discounts/ Commissions3,750.00$4,687.50$5,859.38$ Total Net Income47,250.00$73,312.50$77,965.63$ Cost of Sales Opening Stock-$2,000.00$1,750.00$ Stock Purchased20,000.00$25,000.00$31,250.00$ 20,000.00$27,000.00$33,000.00$ Less Closing Stock2,000.00$1,750.00$1,980.00$ Total Cost of Sales18,000.00$25,250.00$31,020.00$ Gross Profit29,250.00$48,062.50$46,945.63$ Expenses General & Administrative Bank charges500.00$500.00$500.00$ Credit card commission1,000.00$1,000.00$1,000.00$ Consultant fees1,500.00$1,500.00$1,500.00$ Office Supplies800.00$800.00$800.00$ Business insurance900.00$900.00$900.00$ Etc.800.00$800.00$800.00$ Total General & Administrative5,500.00$5,500.00$5,500.00$ Marketing & Promotional Advertising1,000.00$1,100.00$1,210.00$ Promotion - General1,500.00$1,650.00$1,815.00$ Promotion - Other800.00$880.00$968.00$ Etc.700.00$770.00$847.00$ Total Marketing & Promotional4,000.00$4,400.00$4,840.00$ Operating Expenses Newspapers & magazines2,500.00$2,500.00$2,500.00$ Parking/Taxis/Tolls1,000.00$1,000.00$1,000.00$ Laundry/dry cleaning800.00$800.00$800.00$ Cleaning & cleaning products785.00$785.00$785.00$ Sundry supplies415.00$415.00$415.00$ Equipment hire250.00$250.00$250.00$ Etc.-$-$-$ Total Operating Expenses5,750.00$5,750.00$5,750.00$ Motor Vehicle Expenses Fuel500.00$501.00$502.00$ Vehicle service costs760.00$761.52$763.04$ Tyres & other replacement costs200.00$200.00$200.00$ Insurance100.00$100.00$100.00$ Registrations-$-$-$ Total Motor Vehicle Expenses1,560.00$1,562.52$1,565.04$ Website Expenses Domain name registration2,000.00$2,000.00$2,000.00$ Hosting expenses250.00$250.00$250.00$ etc-$-$-$
Business Plan 19
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Business Plan 20 Jul 19Jul 20Jul 21 Current Assets $100,000.00$5,000.00$25,000.00 $3,000.00$4,000.00$8,000.00 General$2,000.00$2,000.00$2,000.00 Rates$1,000.00$1,000.00$1,000.00 Workcover$250.00$250.00$250.00 Insurance$5,000.00$5,000.00$5,000.00 Etc. Total Prepaid expenses8,250.00$8,250.00$8,250.00$ Inventory Raw material$2,000.00$1,750.00 Total Inventory18,000.00$25,250.00$31,020.00$ Short term Investments50.00$500.00$1,000.00$ Other current assets-$1,500.00$2,500.00$ 129,300.00$44,500.00$75,770.00$ Fixed Assets Computer$5,000.00$5,000.00$5,000.00 Store Fit Out$1,000.00$1,000.00$1,000.00 Office Equipment$1,500.00$1,500.00$1,500.00 Leasehold$1,500.00$1,500.00$1,500.00 Buildings & improvements$3,000.00$3,000.00$3,000.00 Furniture & Fixtures$1,100.00$1,100.00$1,100.00 Etc. 5,600.00$5,600.00$5,600.00$ Total Assets134,900.00$50,100.00$81,370.00$ Current Liabilities Bank Overdraft-$9,000.00$9,000.00$ Credit Card Debt5,000.00$8,000.00$12,000.00$ 3,000.00$12,000.00$9,000.00$ -$500.00$5,000.00$ -$150.00$800.00$ -$200.00$600.00$ -$400.00$400.00$ 10,000.00$10,000.00$10,000.00$ Etc. 18,000.00$40,250.00$46,800.00$ Long Term Liabilities Motor Vehicle Loan1,000.00$500.00$300.00$ Equipment Finance800.00$1,500.00$1,000.00$ Long term Loans200.00$500.00$800.00$ 2,000.00$2,500.00$2,100.00$ Total Liabilities20,000.00$42,750.00$48,900.00$ Net Assets114,900.00$7,350.00$32,470.00$ Owners Funds100,000.00$12,765.00-$5,510.00-$ Retained Earnings14,035.00$500.00$2,000.00$ Current Year Profit865.00$19,615.00$35,980.00$ Total Shareholders Funds (Equity)114,900.00$7,350.00$32,470.00$ Assets Total Current Liabilities Total Long Term Liabilities Balance Sheet Prepaid Expenses Cash on hand Year Total Current Assets Liabilities Debtors Total Fixed Assets Creditors GST collected Superannuation PAYG Witholding Payable Workcover Insurance Payable Current portion of long term debt Shareholders Funds ( Equity)
Business Plan 21 Cash Flow Statement Cashflows from Operations1/07/20201/07/20211/07/2022 Cash receipts from customers (enter positive amounts)Cash Sales210,000$220,500$231,525$ Cash collected from customers (debtors)150,000$157,500$165,375$ Funding from Creditors-$-$-$ Stock purchased, not yet paid150,000$157,500$165,375$ Cash paid for100,000$105,000$110,250$ (enter negative amounts)Total Expenses-$-$-$ Inventory (stock)purchases-$-$-$ Funding to Debtors Sales made not yet collected-$-$-$ Net Cash Flow from Operations610,000$640,500$672,525$ Investing Activities-$-$-$ Cash receipts from-$-$-$ (enter positive amounts)Sale of property and equipment-$-$-$ Matured Investments50,000$50,000$50,000$ Cash paid for-$ (enter negative amounts)Purchase of property and equipment-$-$40,000$ Purchase of investments10,000$25,000$26,000$ Net Cash Flow from Investing Activities40,000$25,000$16,000-$ Financing Activities-$-$-$ Cash receipts from-$-$-$ (enter positive amounts)Increase in short term debt5,000$5,000$5,000$ Increase in long term debt-$-$-$ Increase in equity (proceeds from owners)5,000$5,000$10,000$ Cash paid for-$ (enter negative amounts)Repayment of loans5,000$5,000$5,000$ Dividends15,000$15,000$15,000$ Net Cash Flow from Financing Activities10,000-$10,000-$5,000-$ Net Increase in Cash64,000$65,550$65,153$ Cash at End of Year64,000$65,550$65,153$