MGT 401 - Business Plan Evaluation
Added on 2020-03-07
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Running head: BUSINESS PLAN EVALUATIONBusiness Plan Evaluation Name of the Student Name of the University Author note
1BUSINESS PLAN EVALUATIONAnswer to question 1:Jessie has prepared a business plan for opening a coffee shop. Coffee shops are quitecommon business for Australians. The industry trend and analysis indicate that, it hasdeveloped especially in the last five years. Considering the love of Australians towards thevibrant coffee culture and good quality coffee, the revenue in this industry is increasing and itis expected to reach minimum of 7% on an annual basis by the year 2017. This figureindicates that there has been a great boost over the years in this industry. Considering the planmade by Jessie, there are few strong points and weaknesses in this plan. Those are discussedbelow: Strength The primary strength of the business plan made by Jessie is that, it has predeterminedand pragmatic mission. Since, the coffee industry is growing and more players are coming tothe market with their new and innovative plans, while starting a new business it is very muchsignificant to determine the mission and vision of the organization. The mission of theproposed coffee shop would be to give the most effort for creating a unique place for theconsumers where they can socialize in a relaxing and comfortable environment. Along withthat they will also be able to experience one of the best home-brewed coffees along withdelicious snacks and pastries. Other than that, the business plan has determined its small termand long term objective in a transparent way. For the first month, a minimum of 10% profithas been expected as well, which is the primary short term goal for the café. However,considering the long term goals, the café has determined its objective to be selected as one ofthe best cafes by the local guides and food websites. Determining the objectives and fixingthe short term goals are the two strongest points about the business plan. The business planalso contains the description of the expenses that can be required for the café, such as the
2BUSINESS PLAN EVALUATIONpromotional expenses, legal expenses, insurance fees, rent, consultation fees and otherdeposits and stationary expenses. The financial budget of the business has been written indetails in the plan which is a major part of a business planning. Weakness Other than the strong points in the business plan, the plan has several weak points aswell. Those are listed below: Unrealistic budget projections: The business plan has projected few unrealistic monetary projections such as; it didnot include the monthly salary of the owners. This is a major drawback of the plan. Also, theplan has considered the starting inventory budget of the café to be quite high. The ownersmay have some issues with the budget of the business at the initial stage. Since the owners donot have any sponsor currently, they have to arrange for the money themselves. Therefore,the budget needs to be reviewed before proceeding with the plan. The plan has alsoconsidered 10% profit for the first month of the business, which seems very unlikely for astart up business. Undefined target customers For every business, there is a target customer base. If the café targets the youngstersto be their major customers, they have to decorate the interiors according to that; however, ifthey target the middle aged or the old population, they have to outline their menu anddecoration in accordance to that. This specifies the lack of market research before making thedraft business plan.
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