Business Plan

This Business Plan document provides information about understanding the small business environment, investigation of competitors, costing process, key performance indicators, and financial preparation & analysis.

Running head: Business Plan
Business Plan
Name of the Student
Name of the University
Author Note

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BUSINESS PLAN
Table of Contents
Section One – Understanding the Small Business Environment...............................................2
1 – Overall Information of the Company...................................................................................2
2A- Investigation of the Competitors in the market...................................................................2
2B -Advantage and Disadvantage of the Competitors...............................................................3
3 A Costing Process...................................................................................................................7
3 B Key Performance Indicators................................................................................................7
8 – Compliance..........................................................................................................................8
9 - Importance of Internal Control System................................................................................8
Section Two: Financial Preparation & Analysis........................................................................9
B: Report Explanation................................................................................................................9
Requirement 1:.......................................................................................................................9
Requirement 2:.....................................................................................................................10
Requirement 3:.....................................................................................................................11
Section 3: Financial Preparation and Forecasting....................................................................11
Forecasted Revenue.............................................................................................................11
Reliability of the Forecasting Techniques............................................................................13
Section 4: Financial Preparation and Forecasting- Financial Options.....................................14
Section 5: Succession Plan.......................................................................................................15
Professional Letter...............................................................................................................15
Reference..................................................................................................................................17

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Section One – Understanding the Small Business Environment
1 – Overall Information of the Company
The business which Gabriel and Jamie want to establish is dog care centre. As they
have experience in this filed and able to know all the policy and principle which there in
regards are so the business so they want to establish the same so that they will able to get
revenue from the business. As per the business is concern they wanted to make a start on a
larger scale and it will be situated in North-western Sydney Area, the name of the start-up
will be Daily Doggy Care Centre.
The business is based upon the dog care centre so it will target all the individual pet
owners in the locality as their prime customer upon that it will also provide its services online
so that it can able to satisfy the demand of Australian customers. The company provide
services like it will be selling the pet product in their shop and also in their online store and
also, they will deal in caring of the dogs in the day time.
The location which is been consider by the Gabriel and Jamie is in North-western
Sydney Area so it is the area which is been selected for the business operation and also it is
able to make an online website so that it can able to sell their product online and able to serve
more number of the customers.
2A- Investigation of the Competitors in the market
The competitors are also very important part for any business organization as there
they how can directly affect the business profit so it is necessary for the business house to
know the competitors in the business.

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Name of the
Competitor
Address of the Business
Paws of Fun 58 Australia St, Camperdown NSW 2050, Australia
PetResorts 425 Galston Road, Dural NSW 2158
2B -Advantage and Disadvantage of the Competitors
The advantage and the disadvantage of the competitors which are been shown above
is been shown below:
Paws of Fun
It is an Australian based Dog care centre and it carries its business as by
making local dog store in the country (Pawsoffun.com.au 2019). The services which is been
offered by the company is that it provides services like supervised dog care centre and also
the salon services so that the individual is able to make their dogs look good. The advantage
is that it able to hold the customer in the market as it is being carrying its business from
longer period so it able to have some sort of the goodwill and as a result of it the company is
able to hold the market so it will be a tough job for the new business to carry their business in
the market and to hold the customers (Dunphy et al. 2015). The disadvantage which can be
said in the company is that it able to serve so years so it is able to charge a high price so if the
company is able to give the same service at low cost so that it will able to get customers in
the market.
Company is able to many types of the services in the shop and the pricing which is
been there is shown below:

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Table No – 1
Source - Author
So from the above it can be know about the play school service which is been
provided by the Paws of Fun and how it charged the cost from different individual as it show
that it have many plans and the customer can able to show any one of them as per their
requirement (Pawsoffun.com.au 2019).
Table No – 2
Source – Author
The above table show about the dog grooming services charges which the company is able to
charge from each individual. So, it can be said that it the company is able to have many

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option and the individual can able to select the one which is required by the individual
(Pawsoffun.com.au 2019).
Pet Resorts
It is also an Australian dog care centre and provides different types of the services to
the individual. The advantage which the company has that it have infrastructure in very large
scale so it add up value to the company and as a result it able to get more number of the
customers in the business and also able to serve more quality of services as it contain experts
which have experience of the field of many years so it will be very tough for the company to
make up with them so if the new company want to take their part in the market than it will
have to give better quality of the service in low rate company to the existing company
(www.petresortsaustralia.com 2019). The only disadvantage is that it charged a high price as
it takes into consideration the premium clients so the new company can able to get the
business by targeting low client so that it can able to hold low level of individual.
The company provide dog care service and the charge which they charge from the
individual is been shown below:

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Table No – 3
Source – Author
So, from the above it can be seen that the charges which the company take from the
individual in regards of the services and it can be seen that it charges the amount as per the
different services and it gave many options to the individual to choose from the service list
(www.petresortsaustralia.com 2019).

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3 A Costing Process
Costing is the process which is been carried by then company so that it can able to
know the amount of the money which will be spend in regards of the service provided and
also it helps the company to know the amount of the price they should charge from the
customer (Botha and Robertson 2014). As the company is able to know the cost and it add the
profit margin and as a result it able to get the price of the services. So as the company is
providing the service on day basic of the should do the costing as per operating costing
method so that it can able to take out the cost as per the hours of the services provided to the
dogs (Burns and Dewhurst 2016).
While calculating the selling price it should take into consideration the Variable and
fixed cost as the combination of both will form the prime cost and then it has to add the profit
margin in the prime cost and then the output will be the selling price of the service and for the
calculation it should take into consideration the operating cost method (McKeever 2016).
3 B Key Performance Indicators
Key Performance Indicators are the indicator it shows how the company is able to
perform in the future and how it can able to meet the need and objective of the business
(Rosati and Conti 2016). As the company is the start-up so it should take into consideration
many factors and the factors are been shown below:
 Cost of the Service – Firstly is should take into consideration the initial amount of
the cost which is to spend in order to get the return and also it have to know the
amount of the revenue it will able to earn form the same by providing the services so
it should know the cost and revenue of the business (Rosati and Conti 2016).
 Span of the Business – Secondly it should able to check the time period of the
business as it should take into consideration the span time so that if there is no scope

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in the business than it will not able to start up the same so if there worth in the
business than only the individual should do the start-up (Scarborough 2016).
8 – Compliance
The company should able to record all the information properly and timely so that it
will help them to know all the details of the transaction easily and effectively and also it helps
them to know the date on which the expense is been made (Tounés, Lassas-Clerc and Fayolle
2014). If some time it wants to check the information it can easily check them as it is been
recorded timely so it also help them to match between the two entries. If the company is able
to do the transaction as per the required by the compliance as it will able to get proper method
of the accounting and also it able to give a better presentation in the financial statement.
Internal control shows how the company is able to manage their internal management
as if there is any weakness in the internal control than it will directly affect the business risk
of the company (Ward 2016). So, it is necessary for the company to have a proper amount of
internal control so that it can able to have able to control all the business risk which happens
in the company.
9 - Importance of Internal Control System
The company should able to manage all the accounts receivables so that it able to
know how the cash inflow is been carried by the company. So the company should able to
record all the revenue effectively so that there will be no material misstatement in the
financial statement of the company. The company should have proper internal control system
so that it able to record all the proper amount of the details of the revenue and able to show
proper amount of the revenue in the financial statement and it also help them to make all the
information properly in the system so that if any information is been needed by the company
than it can able to have the information easily and effectively.

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Section Two: Financial Preparation & Analysis
Explanation of Break-Even Point
In accounting break-even point is defined as revenues necessary to cover a business’s
total fixed costs and variable cost for the specified time period. Break-even point represents
either in sale units or revenues terms which is needed to cover the total costs of the company
(Kimmel et al. 2017). Break-even is considered useful for the business owners in determining
the degree of profitability.
Explanation of various types of cost and their impact on Break-even point:
Cost is something in break-even that can be categorized in numerous ways based on
the nature of cost. The most general method is classifying the cost into fixed and variable
costs. The fixed does not changes with the rise or fall in units of production. Based on this
cost, the break-even point is useful in ascertaining the number of units or dollars of revenue
that is required to cover the overall cost.
Difference between break-even-point and living costs:
 The break-even point is regarded as the measure of substance whereas the living cost
is the measure of risks
 With lower amount of break-even quantity, the better it is for the company, while
higher is the living cost, the better it is for company.
B: Report Explanation
Requirement 1:
The key performance indicators which can be identified from the business plan which
is being formulated by the business are listed below in details:

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BUSINESS PLAN
 Increase in the number of customers which can be served by the business is one of the
performance indicators of the business. As the number of customers which is served
by the business increases so does the revenue which is generated by the business.
 The profits which is generated by the business is also one of the performance
indicator of the business as the same is the main objective of conducting the business.
The profits which is made by the business depends on the total fees which is collected
by the business.
 The total payments include significant payments which are undertaken by the
business during the period are important as the same have a direct impact on the
profits of the business. Therefore, the cost consideration is considered to be important.
 The cash balance which is available with the management of the company is also
considered to be one of the consideration of performance as availability of the same
means that the liquidity position of the business is intact and appropriate.
 The satisfaction of the customers is also one of the consideration which can affect the
decisions of the business and is considered to be one of the financial indicators of the
business.
Requirement 2:
The difference between the success of the company and the one that fails is generally
the cash management. Having a very little sum of cash implies that a business might have to
pass the ventures that are profitable and may take out loans to overcome the issues of
liquidity (Macve 2015). Very little amount of cash might imply that the company is unable to
function at the normal level or it is forced close its operations completely. To avoid such kind
of issues, company generally remains dependent on cash flow budget to plan and control cash
receipts as well as payments. The cash flow budget is regarded as the effective method of

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keeping up with the real time company outgoings. Maintaining the cash flow budget would
help in forecasting the overall health of the company.
Requirement 3:
Under the accounting terms, variance can be defined as the difference between the
anticipated or the planned amount and the actual amount. For instance, variance occurs for
items that are is contained inside the departments export report.
Importance of variance:
Variance analysis is useful in effective budgeting activity since the management
wants to have lower deviation from the budgets that is planned (Hoyle, Schaefer and Doupnik
2015). The lower amount of deviations helps the managers in making a detailed as well as
forward looking budget decisions.
Variance analysis also acts as the mechanism of control. Variance analysis helps the
management in making the probable ways of how such kind of deviations can be avoided.
The variance analysis helps in passing on the responsibility by employing control mechanism
on required departments. If the labour efficiency variance is found to be unfavourable or the
purchase of raw materials is unfavourable, the management can improve control of the
departments to improve the efficiency.
Section 3: Financial Preparation and Forecasting
Forecasted Revenue
Autumn
2019 Actual Sales

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Periods
Months
Mo
nth
2020
$
2021
$
2022
$
Av
er
ag
e
ov
er
3
Ye
ars
Ac
tu
al
Sal
es
(A)
M
on
thl
y
Fa
cto
r
C)
Mo
nths
to
be
fore
cast
ed
Forec
ast
Sales
Based
on
Mont
hly
Factor
of 2
yrs
$ (D)
Forec
ast
Sales
Data
(G)
AB
S
Err
or
(H)
%
Err
or
(I)
1 July 17595 68900 92100
59
53
2
1.3
4 July
79,57
7
92,28
5
18
5
20.
1%
2
Aug
ust 19550 69800 93450
60
93
3
1.3
4
Aug
ust
81,57
9
92,67
8
77
2
82.
6%
3
Sep
tem
ber 29325 69950 93510
64
26
2
1.3
4
Sep
tem
ber
85,90
6
93,07
1
43
9
46.
9%
4
Oct
obe
r 31280 73650 95730
66
88
7
1.3
0
Oct
obe
r
86,93
9
93,46
3
22
67
23
6.8
%
5
Nov
em
ber 37145 77980 95840
70
32
2
1.2
3
Nov
em
ber
86,42
8
93,85
6
19
84
20
7.0
%
6
Dec
em
ber 41055 76450 94200
70
56
8
1.2
3
Dec
em
ber
86,95
3
94,24
9 49
5.2
%
7
Jan
uar
y 29325 69990 79800
59
70
5
1.1
4
Jan
uar
y
68,07
3
94,64
1
14
84
1
18
59.
8%
8
Feb
rua
ry 41055 77890 99390
72
77
8
1.2
8
Feb
rua
ry
92,86
7
95,03
4
43
56
43
8.3
%
9
Mar
ch 59400 82810 99450
80
55
3
1.2
0
Mar
ch
96,74
0
95,42
7
40
23
40
4.5
%
10
Apri
l 59600 83150 97800
80
18
3
1.1
8
Apri
l
94,31
1
95,81
9
19
81
20
2.6
%
11
Ma
y 62500 87930 95600
82
01
0
1.0
9
Ma
y
89,16
4
96,21
2
61
2
64.
0%
12 Jun 66500 91410 96470 84 1.0 Jun 13 14.

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BUSINESS PLAN
e
79
3 6 e
89,48
7
96,60
5 5 0%
85
25
27 15
1,272,
381
1,133
,340
Average
of Each
Year (A)
41,194.
2
77,492.
5
94,445
.0
Inter
cept
E).
91
89
2.7
3
Total of
Each Year
(A)
494,33
0.00
929,91
0.00
1,133,
340.00
2,310,
404
Slope
(F)
39
2.6
57
3
Total of
All 3
Years (A)
2,557,5
80.00
Average
of All 3
Years (A) 852527
2023
Forecast
Average
(B) 86,502
Reliability of the Forecasting Techniques
The forecasting technique which is used for the purpose of forecasting the total
revenue of the business of Gabriel and Jamie’s business is linear forecasting techniques and
regression analysis (Brook and Pagnanelli 2014). The regression analysis which is followed
by the business for the purpose of ascertaining the revenue which can be generated by the
business for the year 2023. It is to be noted that regression analysis depends on the
relationship between dependent and independent variables of the business (Marom and
Lussier 2014). Regression analysis is followed by a business as the same is considered to be a
powerful tool for the comparing the information which is provided to the business. The
factors which needs to be considered are independent variables and the dependent variables
which are included. Therefore, it can be said that reliance can be provided on the results
which is provided by regression analysis (Badiru and Osisanya 2016). Therefore, the same
makes the forecasting tool appropriate from the perspective of the business.

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BUSINESS PLAN
Section 4: Financial Preparation and Forecasting- Financial Options
One of the major requirements which the management of the company needs to focus
on is the capital requirements which the business needs to have in order to function properly.
The plan of Gabriel and Jamie is to expand the level of operations so that more profits can be
generated by the management. The expansion proposal would be requiring appropriate
financing as the owners plan to move the business into a new business property, employ new
van for work purposes and also recruit new employees to meet the operational needs of the
business. It is for these reasons that the financial prospects must be considered by the
business for appropriate planning of the activities of the business. The management of the
company needs to choose an appropriate source of finance which would be compatible with
the purpose that the fund would be used in the first place. The different source of finances
which would be used are listed below in details:
 Long Term Debts: Gabriel and Jamie would be considering the option of taking long
term loans for the purpose of purchasing the property which is being considered by
them. The long-term debts would be appropriate as the amount is big and the overall
burden on the business would be low in such a case (Bewaji, Yang and Han 2015). In
addition to this, the management of the company can also enjoy the leverage effect
which is associated with long term debts. In addition to this, long term debt also helps
the business to form an appropriate capital structure which can reduce the overall
risks associated with the business.
 Retained Earnings: In case of meeting the expenses of meeting a new van would be
financed by the savings which is kept aside by the business in the form of retained
earnings (Begenau 2018). The retained earnings are the most appropriate source for
financing such activities as the same effectively helps the management to keep the
risks at minimum and also acquire an asset. The retained earnings of the business are

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BUSINESS PLAN
savings which is kept aside by the business for such a purpose only. The van would be
costing an amount of $ 45,000. This would help the business to manage the risks as
well as appropriately finance the risks which are associated with the business.
 Short term Loans: The management can take a short-term loan for the purpose of
financing the activities of the business (Cummings and Wright 2016). The short-term
loan which is taken by the business can help the management to meet the salary
expenses which needs to be undertaken by the business (Aiyar, Calomiris and
Wieladek 2014). The short-term loans which is undertaken by the business would be
for a period of 1 years and therefore, the overall risks which is associated with the
source is minimum. The management of the company choose such a capital as the
overall costs which is associated with such a capital is minimum and the risks can also
be maintained.
Section 5: Succession Plan
Professional Letter
Name: Gabriel and Jamie
Company: Daily Doggy Care Centre (DDCC)
Address: North Western Sydney Area
Date: 07/06/2019
Sir,
The management needs to consider the requirements for listing the business for sales
in such a manner that whole process can be smoothly conducted. The exit strategy should
focus on effectively liquidating the stakes of ownership in the business. The exit period

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BUSINESS PLAN
which should be considered by the business must be at least 3 months. This is the time for the
business to settle all debts, value the assets at market value so that the same can be effectively
disposed (DeTienne, McKelvie and Chandler 2015). The business contract of sales should
also contain such conditions along with the role which would be played by the owners. The
business sales of contract must include provisions that expertise would be provided by the
owners in case the buyer requires the same in any legal matters or even commercial matter.
It would also be your responsibilities to effectively dispose off the assets of the
business and for the same purpose the management needs to appropriately value the assets of
the business. The assets of the business need to be sold off so that the liquidation process of
the business can be conducted in a transparent manner (Hawkey 2017). The operations of the
business would be affected in a manner that the financial activities of the business are
conducted in an appropriate manner. The owners would also be required to clear out all the
debts which is due to the employees of the business in terms of salaries which needs to be
paid by the business (Doh et al. 2017). The employee dues must be cleared by the business as
per guidelines which needs to be followed at the time of liquidation of the business.
In addition to this, the management of the company also needs to clear off other debts
of the business such as account receivables, account payables and lease payments which the
business needs to make before the exit plan can be implemented. In addition to this any banks
dues and loan need to be cleared as well. In case of secured loans, the banks would be
acquiring the assets on the basis of which the loan was actually provided to the management
of the company. Therefore, these are the consideration which you need to consider while
implementing the exit plan for the business and also ensure that all the guidelines are
appropriately followed by the business.

17
BUSINESS PLAN
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