Comparison of Business Plans for Desklib - Business Plan Analysis

The report analyzes two different business plans for a management consulting service business in Australia and a coffee shop business in the USA. The report compares the background, marketing, operations, financial projections, and implementation and timetable of both businesses. The report provides recommendations and a conclusion for a successful business plan.

BUSINESS PLAN ANALYSIS

Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Organisational Overview...........................................................................................................5
3.0 Comparison of Business Plans...................................................................................................6
3.1 Background............................................................................................................................6
3.2 Marketing...............................................................................................................................6
3.3 Operations..............................................................................................................................8
3.4 Financial Projections..............................................................................................................9
3.5 Implementation and Timetable............................................................................................10
4.0 Recommendation and Conclusion...........................................................................................11
References......................................................................................................................................12
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1.0 Introduction
A business plan is a crucial aspect of the business studies and bears critical importance to the
entrepreneurs. Business plan chalks out the detailed policies and strategies that should be
adopted by the budding entrepreneurs before the start of a new venture (Arli, 2017). Also, the
plan provides guidelines as to the operation and financial benchmark for the purpose of decision-
making by the owners. The instant report analyses two different business plans. The first plan
revolves around a management consulting service business in Australia whereas the second plan
is of the coffee shop business in the USA.
At the very outset of the study, the organisational overview of both the business has been
provided followed by the comparison of business plans. In this context, it will be interesting to
note that the points specified in the Blueprints business plan seem to be exhaustible at first
glance and hence, those points are considered to be the basis for subsequent comparison.
Therefore, the comparative analysis focuses on the background of the business in terms of their
mission and vision statement and also the corpora goals and objectives of both the bossiness. In
the latter part of the study, the market elements have been analysed in two segments. Firstly, how
effectively the business plans of both the firms have incorporated market trends and competitive
landscape of the industry. Secondly, how well the marketing strategies including the promotional
venture have been specified within these plans. Furthermore, the researcher attempts to make a
comparative evaluation of operational strategies of both the businesses as laid down in the plans
in terms of legal structure, management hierarchy, premises and facilities and so on. Finally, the
report focuses on the financial projections of both the businesses and assesses the effectiveness
of both the projections in the light of established theoretical framework and tools like ratio
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analysis, forecasted financials, break-even point etc. Based on the findings, the researcher
provides recommendations and wraps up the discussion by way of concluding note.
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2.0 Organisational Overview
Blueprints Business Planning Pty. Ltd. (Blueprints) is a management consultancy company
specialised in the small and medium enterprises (SME) across the country for the preparation of
business plan, training in management skills and strategy formulation. Blueprints are primarily
engaged in the service sector of niche audience asking for consultancy services like plan
drafting, management training and venture funding and business collaboration. Therefore, the
competitive advantage of the business lies on the fact that how well the clientele of the firm are
achieving their business goals and sustainability.
On the other hand, Java Culture Coffee Bar (Java Culture) is a coffee shop business in America.
Java Culture provides high-quality gourmet coffee along with complimentary pastries and free
books for reading (Software, 2018). This is comparatively an easier business plan to conceive
than that of the Blueprints. The success of the business will depend on the value creation through
brand building, satisfied customer base and financial prospect in terms of profitability, liquidity
and solvency in the long-run.
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3.0 Comparison of Business Plans
The given report attempts to identify the principal elements of the business plans of both the
businesses and analyses those elements in terms of future feasibility and viability for commercial
perspective.
3.1 Background
As far as the mission statement and business objectives are concerned, Blueprints wants to
become one of the best business planners in the Sydney marketplace. On the other hand, Java
Culture focuses on becoming "Best New Coffee Bar in the area" as per the rating of the local
restaurant guide. Both the mission statements seem to be logical and feasible in terms SMART
framework. Both are specific in terms of particular objectivity, measurable from the viewpoint
of geographical location, achievable in terms of management acumen, realistic as none of the
objectives is beyond imagination. However, as per as timelines are concerned, Blueprints does
not provide the timeframe in the mission statement, though the business has short and long-term
objectives that are measurable and achievable. On the other hand, Java Culture also lays down its
profitability objective from the very first month which seems to be a bit unrealistic considering
the risks and uncertainties associated with a new venture and initial set-up costs (Software,
2018).
3.2 Marketing
Market Analysis
Blueprints want to provide management consultancy services and therefore, the owner has taken
steps to conduct the market survey in the given field with the help of data provided by
organisations like Institute of Management Consultants, Australia; NSW Small Business
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Advisory Network and also secondary research through relevant literature review. Based on the
findings, it has been asserted that there has been a definite demand for such kind of services in
the Sydney and nearby regions. In addition, the seasonality factor has also been assessed through
a market survey and found that December and January are the lean months because of the
festivity. It seems that the market research conducted for Blueprints is logical and tenable.
On the other hand, the coffee shop market in the USA has also been assessed in the Java Culture
business plan. Since the shop will be placed near Oregon University to attract local students, the
market research conducted by 1997 Oregon Food service Statistics (NAICS 72) has been
consulted. Such research focussed on Eugene region and as per the research findings, the area
has substantial demand for coffee shops (Software, 2018). The research has shown that the
market is full of competitors like Starbucks. However, considering the lower price offering of
Java Culture, this market research also seems to be logical and insightful.
Marketing Strategy
Blueprints have few specific marketing strategies in terms of promotion and publicity initiatives.
Direct mail, promotional literature including leaflets, brochures, business cards and letterheads
are to be used to create and promote the brand name. Additionally, the business plan also
incorporates the plans for ICT marketing strategies. A website will be created and the same will
be promoted through social media. Since the business is a startup and social media promotion is
less costly affairs than a physical advertisement, it may be conceived to be a logical positioning
(Sood, 2012).
On the other hand, the business plan of Java Culture suggests that the business will try to
leverage the benefit of the proximity of the coffee shop to the University. The local students will
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come there for competitively proceed coffee. In addition, the offering of free books will also be
promoted (Software, 2018). However, the business plan is silent as to the marketing tools and
channels to be used. Since the business is planned to set up near the University, some distribution
of promotional literature could have been helpful and the same could have been explicitly
included in the business plan. Moreover, Java Culture's business plan does not refer to online
marketing strategies. At least a social media presence could have brought more customers. Since
the objective of the business is to rank top in local restaurants guides’, it could have been more
sensible to promote the shop at least though rating websites like Zomato etc. moreover, a
Facebook page would have been ideal for attracting students (Software, 2018).
3.3 Operations
Blueprints business plan is detailed with respect to the operating strategies and policies. The plan
provides the overall idea about the business in terms of its legal structure. It has been mentioned
in the plan that the business is going to be registered with the regulators and also the necessary
licensing should also be made (like GST for example). Besides, the management structure along
with the Board composition has been shown with reference to the individual profit sharing and
capital contribution ratio. In addition, the plan depicts the roles and responsibilities matrix for
each of the owners with a specific target to be accomplished within s specified deadline. Further
analysis of the plan may reveal that the plan provides a design of space. Space has been owned
and hence there is no rent provision. The utilisation of space has also been laid down in details.
Also, the equipment and utilises necessary to kick-start the ventures are also listed within the
business plan. Therefore, it may be noted that the business plan has been successfully
incorporated all the necessary operational aspects of the business to make the plan strong and
logical.
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On the other hand, the business plan of Java Culture has not been that detailed though there has
been a reference to the space utilisation (Software, 2018). However, the necessary equipment is
not separately shown but included in the financial sections in a superficial manner which does
not provide an exhaustive picture of the business assets. Additionally, the management hierarchy
and composition of owner groups within the business has not been mentioned in the plan.
Besides, the necessary legal formalities with respect to the incorporation and licensing are also
not present within the operational plan. Therefore, it may be stated that the said busies plan
suffers from non-visibility as to how the business will run once it becomes operational.
3.4 Financial Projections
As far as financial projection is concerned, the same may be regarded as one of the most critical
aspects of the entire business plan. The business plan should clearly document all the financial
implications in terms of funding, projections, assumptions in the preparation of forecasted
financial statements and also the financial KPIs (key performance indicators) like break-even
point, net profit ratio, return on assets etc. An insight into the Blueprints business plan depicts
that the plan prepares the forecasted income statement and also the balance sheet along with the
projected cash flow statement. In addition, it has also been observed that the plan includes the
overall projection of owners' personal expenses schedule for the next periods. It is to be noted
that the business is the primary engagement of the owner groups and as a result, there will be a
clear-cut indication about the owner’s return out of the business in order to sustain him. such
return may be in the form of salary, the share of profit or interest on capital ( Arli, 2017).
Detailing about such within the business plan provides a specific overview of both the business
and owner's positioning about the financial condition going forward (Sener. and Hacioglu, 2017).
In addition, it has also been noted that the management performs certain ratio analysis including
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the calculation of break-even point in order to establish eh financial viability of the business. In
short, it may be conceded that the business plan of Blueprints is perfectly prepared in terms of
financial elements.
However, in the case of Java Culture business plan, some of these elements are not present.
Rather, the sales growth has been projected along with the visual presentation in the form of
graph and table. However, the basic assumptions behind such growth have not been specified.
Moreover, the plan does not incorporate projected financial statement within it making it almost
redundant for the users as the lack of financial projections and financial visibility; it may be
unclear for the owners or any other stakeholders to assess the true potential of the business.
However, the business plan provides, in details, the initial capital requirement, the source of such
funding, monthly operational expenses and also the sale and purchase budget in brief (Software,
2018). However, the depreciation schedule, loan amortisation schedule and also the ratio analysis
is missing which could have been plotted in the plan to demonstrate the financial feasibility of
the venture.
3.5 Implementation and Timetable
Blueprints business plan has structured timetable in terms of each deliverable and actionable. A
brief perusal of their timetable shows that the same is prepared for the next 12 months on a
monthly basis elaborating the target set for each month. In other words, the same may be
considered to be very realistic and helpful in managing the tasks and roles. On the other hand,
Java Culture management has not incorporated any timetable in their business plans. In this
context, it may be noted timeliness of each of the actions and strategies are important in order to
get those implemented in a timely manner (Nicholson, 2015). Without a well-developed and
detailed timetable, a business plan may not be implemented in reality.
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4.0 Recommendation and Conclusion
Analysis established that the plan of Blueprints is comparatively more detailed and methodical
than that of the Java Culture. However, none of the plans has talked about the exit plan. This is
an utmost need for the start-up business. If the business fails, there should be an exit route for the
entrepreneurs so that the amount invested may be recouped (Arora, Arora, and Palvia, 2014).
Additionally, it may be advised to incorporate operational and financial details in the plan of
Java Culture. Moreover, the pricing policy and coffee shop duration of operational hours, menu
and also the details of the staff are not explicitly mentioned therein. Effort should be taken to
include these points as well.
Based on the discussions and analysis performed in the preceding sections of the report, it may
be concluded that a well-prepared business plan is essentially needed for the success of a
business. Thought the success or failure primarily depends on the entrepreneurs’’ acumen and
expertise, the efficient business plan helps him to undertake necessary strategic decisions
(Bezawada, 2012).
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References
Arli, D. (2017). Does Social Media Matter? Investigating the Effect of Social Media Features on
Consumer Attitudes. Journal of Promotion Management, 23(4), pp.521-539.
Arora, A., Arora, A. and Palvia, S. (2014). Social Media Index Valuation: Impact of
Technological, Social, Economic, and Ethical Dimensions. Journal of Promotion Management,
20(3), pp.328-344.
Bezawada, D. (2012). Women Entrepreneurship: Importance of It Education. Global Journal
For Research Analysis, 3(8), pp.1-2.
Nicholson, D. (2015). The Effect of Achievement Needs and Entrepreneurship on the Start-up
Intention: Focus on Mediation Role of Start-up Motivation. Asia-Pacific Journal of Business
Venturing and Entrepreneurship, 10(3), pp.51-60.
Sener, S. and Hacioglu, V. (2017). Innovative entreprenuership under
uncertainty. Pressacademia, 6(2), pp.168-176.
Software, P. (2018). Coffee Shop Business Plan Sample – Company Summary | Bplans. [online]
Bplans.com. Available at:
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Dec. 2018].
Software, P. (2018). Coffee Shop Business Plan Sample - Executive Summary | Bplans. [online]
Bplans.com. Available at:
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https://www.bplans.com/coffee_shop_business_plan/executive_summary_fc.php [Accessed 10
Dec. 2018].
Software, P. (2018). Coffee Shop Business Plan Sample – Financial Plan | Bplans. [online]
Bplans.com. Available at:
https://www.bplans.com/coffee_shop_business_plan/financial_plan_fc.php [Accessed 10 Dec.
2018].
Software, P. (2018). Coffee Shop Business Plan Sample - Management Summary | Bplans.
[online] Bplans.com. Available at:
https://www.bplans.com/coffee_shop_business_plan/management_summary_fc.php [Accessed
10 Dec. 2018].
Software, P. (2018). Coffee Shop Business Plan Sample – Market Analysis Summary | Bplans.
[online] Bplans.com. Available at:
https://www.bplans.com/coffee_shop_business_plan/market_analysis_summary_fc.php
[Accessed 10 Dec. 2018].
Software, P. (2018). Coffee Shop Business Plan Sample – Products | Bplans. [online]
Bplans.com. Available at: https://www.bplans.com/coffee_shop_business_plan/products_fc.php
[Accessed 10 Dec. 2018].
Software, P. (2018). Coffee Shop Business Plan Sample – Strategy and Implementation Summary
| Bplans. [online] Bplans.com. Available at:
https://www.bplans.com/coffee_shop_business_plan/strategy_and_implementation_summary_fc.
php [Accessed 10 Dec. 2018].
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Sood, S. (2012). The Death of Social Media in Start-Up Companies and the Rise of S-
Commerce. Journal of Electronic Commerce in Organizations, 10(2), pp.1-15.
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