Entrepreneurship Skill Assignment

Entrepreneurship

Table of Contents
INTRODUCTION...........................................................................................................................3
Introduction and description of the venture................................................................................3
Organization of business.............................................................................................................3
Financials....................................................................................................................................5
Marketing....................................................................................................................................8
Operations ..................................................................................................................................9
Legal issues.................................................................................................................................9
Major challenges.......................................................................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
New ventures that are carefully planned have more chances of succeeding in the future.
Planning helps entrepreneur to determine exactly the things that are required for starting the
venture and resources like financial and human resource that are required to implement the plan
(Barringer, 2015.). The Report is based on business plan for expanding the operations of Buster
from one store to two store operation.
MAIN BODY
Introduction and description of the venture.
Business plan refers to the document that defines the way in which a new business will
achieve its aim and objectives. It covers various things from different point of view like
operational, financial and marketing etc. Business plan helps to achieve the vision of
organization, increases the chances of success in future (Chambers and Humble, 2017.).
The business plan will outline the proposed venture of Buster to expand its operations
from one store to two stores. Buster is a small retail business that operates in lobby of big office
building. Owner of the business spent fifty hours per week at the store whereas there are two
employees and each worker spent thirty hours per week at the store. It offers variety of products
that are required by occupants of office building such as newspaper, snacks,paperback books
greeting cards, beverages, sandwiches, gift items etc.
The aspirations of Buster is to expand its business in new office building further, it also
aims to start a chain of stores consist of 10-15 stores in large buildings down-town. Owner has
decided to use the savings, mortgage on house, attracting investors to invest in the business etc.
This will help to improve current sales and profitability of Buster as well also helps to gain
competitive advantage over competitors.
Organization of business.
Owner
Owner is the individual or group of the business who is also called legal proprietor. The
owner and Manager of Buster is Marsha Jones. Owner will be responsible to manage all the
operations of existing as well as proposed store in new office building. Owner has completed
degree in Business Administration (Chambers and Humble, 2017).
Company legal structure

Legal structure refers to the form of business that are allowed by state law. There are
various forms of the organization such as sole proprietorship, partnership, S corporation, C
corporation etc. The legal structure of Buster is C corporation (Gill, Dana and Obradovich,
2018). This form of business was chosen because of various tax advantages. Under this, tax is
charged on corporate income as well as on personal income. Shareholders of Buster has elected
Marsha Jones that will manage proposed store in new office building.
Management team
Management team refers to the individuals that are working at high level of the business.
Management team of Buster includes various people that will be responsible for different roles.
Mr. Wallace is the Store Manager. Mr. Wallace has 5 years experience of working in the field of
Retail industry and possess degree in the field of Finance. Store Manager will be responsible for
ordering, handling the products. Mr. Mondu is the Operations Manager of the business. Mr.
Mondu has degree and experience of 2 years in the field of operations management. Operations
Manager will be responsible for bringing an improvement in the quality , efficiency of
organizational process.
Employees
Employees are the individuals that are working in the business and helps the owner to
deliver products or services to ultimate customers. Currently there are two employees working in
the existing store of the business (Hallen, Cohen and Bingham, 2017). Each employee is working
for thirty hours in a week at the store. Business will hire 4 new employees for the proposed store
that also includes one technician that will support operations manager. Employees will help the
business to conduct day to day activities in effective way. Such as dealing with customers,
exchanging the damaged products,
Contractors/vendors
Contractors refers to the individual or firm that enters into contract with business to
supply raw material or labour that helps the firm to develop and offer products to the customer.
Buster will purchase raw material on monthly basis from contractor. Further, business will enter
into contract with supplier of machineries and equipments for proposed store. So that, business
can easily develop and sell the products to customers.

Financials
a) Anticipated Operating cost- The anticipated operating cost of new venture for month is as
follows:
Expenses Amount ( $)
Rent 1200
Utility 900
Office supplies 900
Accountancy and legal fees 1000
Total 4000
b) Anticipated investment requirements
The anticipated investment requirements of new venture for twelve months is as follows :
Anticipated requirement of investment
Amount in
($)
Headin
g
Month
1
Mont
h 2
Mont
h 3
Mont
h 4
Mont
h 5
Mon
th 6
Mont
h 7
Mon
th 8
Mont
h 9
Mont
h 10
Mon
th 11
Mon
th 12 Total
Furnitur
e 400 400 300 500 400 500 700 800 800 850 900 1200 7750
Inventor
y 500 400 500 400 600 400 460 500 550 500 600 10006410
Payroll 200 300 100 300 400 200 250 300 330 400 500 800 4080
Technol
ogical
expense
s 300 400 200 300 400 500 550 600 640 700 740 800 6130
Advertis
ing and
promoti
400 300 400 500 400 300 350 400 460 500 300 500 4810

on
Researc
h
expense
s 200 300 200 100 300 150 100 120 180 200 4000 500 6350
Total 2000 2100 1700 2100 2500 2050 2410 2720 2960 3150 7040 4800
3553
0
c) Anticipated revenue
The anticipated revenue for new venture for the period of six months is as follows -
Anticipated Revenue (Amount in $)
Heading Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Revenue
from Sales 15000 20000 25000 15000 30000 35000
Revenue
from
Commission 300 400 300 300 400 500
Total 15300 20400 25300 15300 30400 35500
d) Cash flow statement
Cash Flow Statement
Heading
Month
1
Month
2
Mont
h 3
Mont
h 4
Mont
h 5
Mont
h 6
Mont
h 7
Mont
h 8
Month
9
Month
10
Month
11
Mo
nth
12 Total
Revenue
Sales 15000 20000 25000 15000
3000
0
3500
0 30000 40000 35000 45000 42000
480
00 3800
Commis 300 400 300 300 400 500 400 500 550 600 650 600 3855

sion
Interest 500 550 600 650 700 750 800 850 900 950 1000
105
0 148
Total
Revenue 15800 20950 25900 15950
3110
0
3625
0 31200 41350 36450 46550 43650
496
50 4041
Cost
Rent 1000 1200 1400 1800 1800 2000 2100 2200 2200 2500 2800
300
0 240
Payroll 1500 1800 2000 2200 2000 2500 3000 3200 3000 3000 3100
300
0 543
Raw
Material 1200 1300 1800 1000 1400 1700 1300 2000 2500 3000 3400
370
0 546
Total
cost 3700 4300 5200 5000 5200 6200 6400 7400 7700 8500 9300
970
0 1029
Net cash
flow 12100 16650 20700 10950
2590
0
3005
0 24800 33950 28750 38050 34350
399
50 3948
e) Payback point
Payback period
Monthly
Cash inflow
Cumulative cash
inflow
1 12100 12100
2 16650 28750
3 20700 49450
4 10950 60400
5 25900 86300
6 30050 116350
7 24800 141150
8 33950 175100

9 28750 203850
10 38050 241900
11 34350 276250
12 39950 316200
Payback period = 2 year + 35530-28750/20700= 2.327 year
f) Anticipated return on investment
Income statement
Heading Year 1 Year 2 Year 3
Turnover 404100 406300 410000
Expenses 394800 400000 400000
Operating
profit 9300 6300 10000
Tax 930 630 1000
Net profit 8370 5670 9000
Return on Investment
Year 1 Year 2 Year 3
8370/35530*100 =
23.55%
5670/35530*100 =
15.95%
9000/35530*100 =
25.33%
Marketing
a) Marketing strategy
One of the most important element for the success of the business is its marketing
strategy. To attract large number of customers Buster will use the procedure to ensure high level
of customer service and reliability will be developed for maintaining adequate level of stock for
all types of products for the customers.

b) Marketing requirements
For effective marketing business will develop effective strategies related with product,
price, place and promotion etc. It will use billboards, advertisement of new store in newspaper,
magazine, radio etc. to capture the attention of the customers (McKenzie, 2015). Moreover, it
will use social media platforms like Facebook, Instagram etc. so that, customers can get relevant
information regarding proposed store.
Product
Buster plans to offer various products to target segment of the customers to gain
competitive advantage over other firms that are operating in Retail industry. This includes the
items that are demanded and required by people living in office building. Such as paperback
books, pre wrapped sandwiches, greeting cards, bottled beverages, snacks, gift items etc. All
these products are available in different size, quantity and quality. The products are having
various benefits to the buyers.
Price
Company will use penetration pricing strategy to attract existing as well as new
customers towards the products offered by the firm. Penetration pricing is a type of strategy that
business uses for offering the products at lower price in the market. This will help Buster to
retain loyal customers and they will not shift towards the products of competitors.
Promotion
It refers to tools and methods that will be used by business to promote its products in the
market. This will help to increase the sale of the items as well as also help to improve
profitability of retail business. In order to attract targeted segment of customers, Buster will use
various tools and techniques for promotion its wide range of products like gift items, snacks etc.
Place
Products of the firm will be directly sold to ultimate customers and no middleman will be
involved. Sales force of the company will help to sell the products to buyers. Firm will also
provide the facility of free home delivery to the clients.
c) Competition
It refers to the process of competing with rivals. It promotes innovation in the industry,
efficiency of the business etc. There are various firms that are operating in retail sector and
offering products to the customers. Penetration pricing strategy of Buster will help to compete

with other companies by offering the products at affordable prices (Kuratko and Hornsby,
2017). There are two criteria that will improve the chances of success of proposed store these are
low cost of operations and convenience to customers in respect of purchasing the products.
Operations
Location
The proposed store will be opened in Hong Kong. A new office building is opening two
blocks far from the building in which company is already having its one store. Buster will open
second store in the new building. Further, it will open chain of stores in building downturn in the
future.
Process of operations
Store Manager of the firm will purchase raw material from contractor on monthly basis
after this, products will be produced by employees that are working in the store. Consumable
products will be stored in cold warehouse until it will be dispatched to consumers (Kirzner,
2015).
Legal issues
Buster will have to comply various laws and regulations for second store in new office
building. There may be various types of legal issues such as compliance of intellectual property
law, commercial law issues, issues regarding structuring of business etc. To comply with the
above laws so that, penalty will not be imposed on business. Firstly, new venture will enter into
agreement with employees regarding employment. It also have to sign various agreements for
commercial property. Other than this, firm will have to protect its new products with the help of
Intellectual Property Rights and Copyright etc. Buster will appoint in house attorney that will
help to deal with various types of legal issues. Such as issues related with employment, taxation
matter and other regulatory matters etc. In house attorney of Buster will provide advice to
organization as well as to employees. So that, they does not have to face negative consequences
in the future.
Major challenges
There are various types of new ventures that failed due to lack of proper planning.
Therefore, one of the major challenge that Buster may face is during the stage of planning for
starting new store in new office building. Another challenge is that, retail store have to develop

strong strategies to compete with other firms that are offering similar type of products to the
customers. Therefore, competition is another challenge that may affect the success of the
business. Duster will have to develop innovative consumer items so that, it can easily survive in
the industry (Hayden, 2016).
Hiring best employees is also one of the major challenge that Duster may face while
opening new store in new office building. It is a great challenge for human resource department
of the business to employ skilled and talented employees. When income increases, expenditure
of the business also increases. Therefore another challenge that new venture may face is related
with management of finance. To face this difficulty, Duster should take support from financial
consultancy firm that will help to take decisions related with financial matters.
CONCLUSION
The above Report has outlined that business plan is the written document that
explain the way in which a new venture will achieve its aim and objectives. Owner of firm is
responsible to manage all the operations of business. The legal structure of Buster is C
corporation. Management team of firm involves various people like Operational Manager, Store
Manager etc. Every venture face various challenges like financial management etc.
REFERENCES
Books and Journals -
Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson
Education India.
Chambers, I. and Humble, J., 2017. Developing a Plan for the Planet: A Business Plan for
Sustainable Living. Routledge.
Chambers, I. and Humble, J., 2017. Plan for the planet: a business plan for a sustainable world.
Routledge.

Gill, A., Dana, L.P. and Obradovich, J.D., 2018. Financial risk management and financial
performance of new small business ventures: evidence from Indian survey data. Journal
for International Business and Entrepreneurship Development. 11(2). pp.75-95.
Hallen, B.L., Cohen, S. and Bingham, C., 2017. Do accelerators accelerate? If so, how? The
impact of intensive learning from others on new venture development. If so, how.
Hayden, R.M., 2016. Comprehensive Financial Plan Generator, Client-to-Client Comparative
Analytics Tool, Advisor Ratings, Overall Financial Wellness Rating System and On-
Demand Decision Analysis, Data Importation Aggregator. U.S. Patent Application
14/886,273.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D.F. and Hornsby, J.S., 2017. New venture management: The entrepreneur’s roadmap.
Routledge.
McKeever, M., 2016. How to write a business plan. Nolo.
McKenzie, D., 2015. Identifying and spurring high-growth entrepreneurship: Experimental
evidence from a business plan competition. The World Bank.

1

2

3