SWOT Analysis and Entrepreneurship

The provided text discusses various sources on entrepreneurship, innovation, and SWOT analysis. It mentions books like 'Innovation and Entrepreneurship' by Joseph Schumpeter, 'The Practice of Foresight in Long-Term Planning' by Michael K. Peter and David G. Jarratt, and 'Importance-Performance Analysis Based SWOT Analysis' by Bundit Phadermrod, Richard M. Crowder, and Gregory B. Wills. The text also references articles on entrepreneurship and innovation at MIT, global entrepreneurship and innovation in management, business, entrepreneurship, and innovation towards poverty reduction, regional entrepreneurship and innovation in Chile, social entrepreneurship and the institutional environment, impact of Stanford University's economic impact via innovation and entrepreneurship, new cross-proposal entrepreneurship and innovation in educational programs. It highlights the importance of SWOT analysis for entrepreneurial success.

ENTREPRENEURSHIP AND
INNOVATION

Table of Contents
1. OVERVIEW ...............................................................................................................................1
Targeted customers-.....................................................................................................................1
Problem that can be solved-.........................................................................................................2
2. EXECUTIVE SUMMARY ........................................................................................................4
3. General company description......................................................................................................5
Objective- ....................................................................................................................................5
Vision...........................................................................................................................................5
Mission.........................................................................................................................................6
Short term goals- .........................................................................................................................6
Medium term goal- .....................................................................................................................6
Long term goal- ...........................................................................................................................6
Vision- what is your aspiration ?.................................................................................................6
How will you achieve your mission.............................................................................................6
4. Opportunity .................................................................................................................................7
Why you started? ........................................................................................................................7
What opportunity you saw?.........................................................................................................7
5. Industry & Market .......................................................................................................................7
Chamber of commerce ................................................................................................................7
Respective market........................................................................................................................8
Is it a port or land locked market?...............................................................................................8
Why you have chosen that area for market?................................................................................8
Segment the market, four P's.......................................................................................................8
6.Strategy.........................................................................................................................................9
7. The team ....................................................................................................................................14
Organizational structure ............................................................................................................14
On what basis you are forming the team...................................................................................14
8. Marketing plan ..........................................................................................................................14

Niche product or mass product..................................................................................................14
Marketing ..................................................................................................................................14
Logo or slogan or both...............................................................................................................15
Competitors of the product .......................................................................................................15
Direct or indirect or potential.....................................................................................................15
Diversification............................................................................................................................15
New product- New market ........................................................................................................15
Existing product- existing market..............................................................................................16
Market skimming.......................................................................................................................16
9. Operational plan ........................................................................................................................16
10. Financial plan...........................................................................................................................16
REFERENCES..............................................................................................................................17

1. OVERVIEW
Smart home technology makes the life easier and more convenient. Henceforth, it is
equipped with special platform enabling the inhabitant to control all functions remotely and
program an array of automated home electronic devices. Additionally, the major purpose is to
serve deeper engagement on term that how this entity enables safety and security for the
connected home that assists to create the unique user experience. Therefore, the major key
drivers of the Smart home market are as enhancement in need of convenience, safety, demand
for energy efficient solutions, to get control over lighting facilities, security with technical
advancement and home entertainment.
Thus, smart home technology is kind of integration of technical advancement services
that aids to have better quality of living. Henceforth, Smart home services are the part of the
internet of things and devices that often operate together and shares the consumer usage data and
automated the actions based on homeowners preferences. Thus, one of the major beneficial
advantage of this is to have some energy efficiency savings. It offers some tremendous
advantages to elderly people who lives alone. Additionally, home automation services supports
to have improvement in efficiency, reduces the complexity and works as to improve user
experience to make it more enjoyable and beneficial for users.
However, the present report will based on manufacturing industry type. This entity will
manufacture Smart Home automation tools as video surveillance, access control, energy
monitoring, smoke detector, intrusion detection and energy alerts etc. Therefore, these new
technical advancement will become the part of the environment in which individuals can able to
live effectively.
Furthermore, it can be stated that smart building is a smart home. Henceforth,
commercial, industrial, residential buildings of all the size and shapes that inclusive of offices,
skyscrapers, apartment building and other technical advancement that reduces the cost of energy
and environment impact that ensures security as well aids in improving occupant satisfaction.
Targeted customers-
Targeted customers Functionality Solutions offering
Communication service
providers
It will assist in providing the
one solution.
The offering will be provide as
single, integrated solution that
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takes the advantage of internet
of things.
Resell this services to other
B2B customers such as owner
of the real estate etc.
Mobile application and web
for business to business
customers.
This helps in order to provide
service to end users.
It aids in making business
decision for the customers.
Corporations and interior
designers
Interior designers will define
that where to have the use of
home automation tool products
and at which place that needs
to be placed.
It will help2. EXECUTIVE
SUMMARY s customers to
know about it usage so that
utilization of the service can
be done effectively.
Individual upper middle
class
Home owners can works as to
association managing the
resources such as gym, library,
swimming with the use of
M2M solutions.
Henceforth, it will be
supported in web application
and mobile application.
Real state companies The new houses can be
enabled with the any or all of
the offerings such as safety,
energy management, waste
management and security etc.
Solutions support to the any
industry vertical.
Problem that can be solved-
Home automation tools makes the life of consumer easier and convenient. Therefore,
security system aids to provide an immense benefits in an emergency. Therefore, the one of the
solution of Smart homes are to provide some energy efficiency savings. Henceforth, it can be
stated that technology promises tremendous beneficial advantages for elderly people living alone
(Roberts, Murray and Kim, 2019). Additionally, system like Z-wave and ZigBee works as to put
the some devices to have reduced level of the functionality. Hence, it can be stated that east to
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control of the automated system provides similar benefits with the disabilities and limited range
of movement. This enables the direct interaction within the user and smart commodities.
Henceforth, it mainly focus on emotional needs, desires that attached to domestic
environment. To achieve the effective well being with the help of smart home solutions to design
smart home product and services effectively. It is also beneficial for the adult children who lives
elsewhere to have participation in the care of ageing parents. However, easier to control the
automation system provide tremendous benefits to the people who have limited range of
movement (Wu and Huarng, 2015). However, it is true to stated that consumers values the
technology as it aids to makes the life easier. Technological integration aids to enhanced safety,
reduced clutter and improved cooking ability.
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2. EXECUTIVE SUMMARY
The present report is based on topic as “Entrepreneurship and Innovation”. It is term that
relates with the developing new business venture and growing out the existing ones. This results
when ideas can implement within entity and this satisfy the need and expectation of customers.
Therefore, report has covered activities as to set up the business plan for A-Z smart home
solutions to customer.
The following activities has covered to undertake new innovation as overview of the
company and product that is about to launched in new market, object, vision, mission and
medium term goal, opportunities etc. Lastly, report has covered financial plan and that is
inclusive of balance sheet, income statement, cash flow etc.
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3. General company description
Entrepreneurship defined as process of developing new business venture or growing
existing ones (Si, Cullen and et.al., 2018). Henceforth, it can be stated that management
specialization in the entrepreneurship and innovation aids to provide the diverse set of options to
hone their entrepreneurship skills. Thus, innovation is the process that can be termed out as to
generate the ideas in ant context. Activities of the entrepreneurship cannot be survived without
the innovation facilities.
In addition to this, it can be termed out as innovation and entrepreneurship are the two
differ terms that are linked to economic develop through different characteristics to each other. It
is the ability to apply the creative solutions to problems and opportunities so that there can be
enhancement in the people lives. On the other words. Entrepreneurship innovation is the key
value that aids to enhance the longevity of the business. It is term that is relate with developing
thinking skill that aids to create new value.
The present report is based on the business activities of the A-Z smart home solutions,
this is enterprise that deals with the streamlines the setup, installation and to integrate the smart
home devices. Therefore, the main aim of this enterprise is to come up smart technology that aids
to simplify the life and produce commodities that aids to create value within market.
Objective-
The main objective of the firm is to come up with the innovative services and to produce
the useful commodities that aids to enhance the productivity and profitability of the enterprise.
Hence, innovation and creation is the two tool that aids to develop the image of enterprise within
the market.
By providing the smart home solution, the life of the consumer will be more easy and
convenient (8 Matthews and Brueggemann, 2015). Therefore, integration of technology and
services aids to home networking for better quality of living. This focus on technical
advancement that are connected and supplement to each other.
Vision
 To build the largest specialized technological lifestyle network by providing and
innovative solutions for home and building all available in one roof. Thus, main aim is to
have continuous improvement of our smart-home team.
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 The vision of the company to make the core functions of the home more smarter, efficient
and more comfortable.
Mission
To provide the highest standard of living by providing them utmost concepts and solution
using the reliable and renowned commodities while demonstrating innovative devices to exceed
customer expectation. It is vital to have success to provide the ultimate environment building
catered in lifestyle environment.
Short term goals-
 To attract the customer with innovative features.
Medium term goal-
 To enhance the sale of enterprise by attracting customer with innovative facilities.
 To expand the business working by adding new features to product and services.
 To reach out the maximum customers to enhance the growth within enterprise.
Long term goal-
 To reach out the customers to develop a system that can be easily installed, cost efficient
and able to provide genuine home automation to consumers.
 To listen the complain of customers so that modification can be done in commodities.
Vision- what is your aspiration ?
The corporate vision of the enterprise is to define future with best home automation
services. Hence, the main aspiration is to be the acknowledged world leader in design and
manufacturing of home automation tool so that better SMART services can be brought down.
Therefore, the ultimate vision of the enterprise is to be recognized as market leader in the
management of and execution of all the facilities. To become the organisation that can able to
answer higher standard of professionalism (Mazzarol and Reboud, 2017). Therefore, the overall
aspiration is ro become the admired business and service provider in the world.
How will you achieve your mission
Technology has become the integrated part of the people lives. Hence, home automation
business uses technologies like internet, sensors and automation control to create the centralized
and digital system for homes. In order to be driving force for the enterprise across the value
chain. Therefore, the main consideration must be over to understand the customer needs and
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focus on satisfaction of customer. By putting main consideration over design and quality aids to
provide dealers with superior commodities innovative solutions.
4. Opportunity
Why you started?
Home automation system are designed to integrate all kind of home devices, lights,
heating and security system. Henceforth, connected home solution consist of set of devices and
services that are connected to each other. The most of the individuals are professionally working
in this present scenario so this kind of facilities will be beneficial for them to control the
activities. Therefore, home automation system mainly used for controlling indoor and outdoor
lighting, air conditioning and electronic appliances with appropriate sensors.
What opportunity you saw?
Future scope of home automation system is to have key improvements existing digital
tools and to make the home more smarter. Therefore, homes can be interfaced with sensors as
motion, light, temperature that provide automated toggling of devices based on the conditions. It
has vast scope in future as it provides the savings, safety, control and convenience etc. In future
growth of home automation tool will be enhanced as it reduce power consumption and
automatically turn off the lights and appliances.
5. Industry & Market
Chamber of commerce
A- Z smart home solutions gives the opportunity to meet with other local business owner
and the network. It holds regular networking events that allows member to exchange ideas,
develop relationship and very assistive in terms to bring improvement in professional network. It
is essential for the growth in market as it helps in connecting local businesses.
Bank
Commercial banks makes money by lending to individuals and businesses. This provides
the company financial dealings with an institution that provides business loans, savings and
credit (Modrego and et.al., 2015). Henceforth, bank financing is one of the primary source of
capital so that entity can easily able to expand, acquisition, equipment purchase in order to
simply meet growing operating expenses.
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Respective market
A-z home solution will select the market that is covering of the number of customer and
local residents. This aids to gain competitive advantage within the market. By choosing effective
market the customer within the market can be attracted towards the product and services. It has
to be chosen wisely in order to gain longer term competitive advantage within the market.
Is it a port or land locked market?
Port-lock offers the high level of convenience with the local shops, cafes, businesses,
professional resources and beautiful surroundings. With the help of choosing this market, the
firm can able to gain competitive advancement.
Why you have chosen that area for market?
Port-lock market will be chosen, as in this entity will get the chance to get interact with
maximum number of the customer and innovative feature of home automation services will
attract the customer within the market.
Segment the market, four P's
Gaining the marketing advantage in the competitive landscape has been one of the
biggest challenge for the business. It is process of dividing the target market group into sub-
section that can communicate with through specific communication channels and key messages
(Goll, 2018). Therefore, the business can segment on the following grounds as-
Geographical segmentation- It is used to identify the business target market that based on
where the business are located. This is very useful for identifying media and marketing channels
that designed to reach certain geographic areas. It means dividing the groups into the subgroups
in the manner as age, gender, values etc. However, segmentation can be based on the income of
the customer.
Psycho-graphic segmentation- This is the method in which consumers are eager to try the new
ideas on the basis of their psychological that is personality, attitude and lifestyle. Henceforth, it
can be done with the help of following basis as-
 Innovators- At this, there are number of the influential individuals with whom the
average person can checks out the process of innovation.
 Early majority- Under this group tends to deliberate before adopting the new
commodities. This is very crucial to legitimising an innovation so that whole process can
be conducted effectively.
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 Late majority- Under this, new ideas can be adopted after the process of innovation.
Behaviour segmentation- The consumers are classified into the market segments not the basis
of knowledge, attitude and product attributes. Thus, these defined in following manner as-
 Purchase occasion- It can be differentiated on the basis of product and services. It is
crucial to identified the needs and wants of the customers.
 Benefits sought- The key points that needs to be considered are as high quality, good
taste, speed, sex appeal etc.
 user status- Potential buyers may be classified as regular users, occasional user and non
user.
Marketing mix- It is inclusive of the components as are-
 Product- A to Z smart home solutions works towards to full-fill the need and wants to
the customers by providing better home automation tool. Therefore, unique advantage of
the commodities can determine and this aids to make unique image within the market.
 Price- It is one of the technical advancement in which product offering is established at
the time of making some pricing decision. Therefore, the price determination has huge
impact over the profit margin, supply, demand and strategy of marketing.
 Promotion- In orderer to promote the awareness of home automation tools it is crucial to
undergo with elements like advertisement, public relation, social media marketing, email
marketing and search engine market etc. With help of using better advertisement tool the
entity can promote its product and services in better and efficient mode (Eesley and
Miller, 2018).
 Place- The terms marketing is all about the putting the right commodity for the right
price at the right place at the right time. Henceforth, port-locked market will be selected
so that it can be easy to reach customers, local residents etc. This aids to gain competitive
advantage within the market.
6.Strategy
Compete in the market
For competing into market A-Z Smart Home Solution use innovative ideas to gain
advantage in the marketplace. Identifying the needs and wants of customer will help in
increasing profit for future. As it is providing the best customer service so that it can be able to
compete in market. For sustaining into market a strong strategy is to be made so that it will
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provide best services to customers in the market. Innovation will bring opportunity and growth
that will increase profit and market share(Namada, 2018). For gaining competitive advantage
Smart Home Solutions have to offer suitable price to the customers so that they can purchase
product and services and helps in utilizing effective use of resources.
For sustaining in the market there are so many strategies that is being followed by the
company. Differentiation in product is another strategy that is to be used in competing in the
market. As customers do not like similar products they like differentiated product so Smart
Home Solutions is targeting and selling differentiated product. This helps in attracting more
customers towards it. Consumers nowadays are worried about the cost that market is offering so
sometimes they are not able to purchase that product because of cost of it. By adopting niche
marketing also company can compete in the market by targeting a particular group of consumers
that will become regular customer of the company(Kumar and Pansari, 2016). It is important to
sustain in the marketplace for longer duration for grabbing customers towards products and
services.
Long term planning
Goal Strategy Resources Time period
Gaining competitive
advantage
Porter's Five Force
Model
Research and
development
3-4 months
Differentiated product
so that more customers
will attract
Marketing mix Quality and quantity
of product
2 months
Maximizing wealth Swot Analysis
(Madsen and Walker,
2015)
Training and
development
5 months
SWOT Analysis
SWOT analysis refers to a technique that helps in identifying the internal factors that
affect working of the company.
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Strength
A-Z Smart Home Solutions is providing best services to its customers. It provides
equipment that are of good technology and there is no issue faced while using that type of
equipment in home. Its main strength is it provides the best quality product and services to its
customers (Peter and Jarratt, 2015). As compared to another competitor in the marketplace
company is providing differentiated product that is the another strength of the company.
Weakness
The biggest weakness of the company is it cannot invest in research and development. As
it is selling product and services that will create difference in quality. It cannot attract more
customers towards it. Due to this it will not be able to earn more profit and growth cannot be
occur in future course of action.
Opportunities
Selling product through different online websites such as Amazon, Flip kart etc. Is the
biggest opportunity for the company to attract more customers towards the company. This will
help in growth and bringing new technology into the marketplace. Online marketing of product
is the best selling technique that will attract more customers towards the company.
Threat
Competitors of Smart Home Appliances are the biggest threat of the company. As new
entrant enter into the marketplace they will bring new technology into the market (Meyr,
Wagner and Rohde, 2015).Substitute product also become threat for it as if the product is not
liked by the customer it will searching other product that will satisfy its needs and wants.
Strategy used in the company
A-Z Smart Home Solutions is using marketing mix strategy to attract more customers
towards the company. It consists of 4Ps of marketing such as Product, Price, Place and
Promotion. Firstly, Product is to be made by considering needs and wants of the customer.
Proper techniques is to be used to manufacture product and services for future course of action.
If the quality of the product is not good then customers will not buy that product and company's
operation cost will increase. Product is made with proper manufacturing process that it will
provide proper product quality to its customers. Price can be offered to customers that will be
suited for customers for purchasing product from the market. Price plays an important role in
setting up product and services for future growth of the company. For customers price is the
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main element that decide purchasing power of the customer. Price is the main element that will
decide mood of the customer. Place defines the area where product is to be sell in the
marketplace. A market is to be decided where to sell product and how customers are attracted to
buy the product. There are many ways in deciding place that where to sell the product in the
market and what will be the best place that suited for selling the product. There are so many
strategies that can be used to sell the product in the market. Generally nowadays consumer want
to but product through online so Smart Home Solutions can provide them product online and
also give better customer services (Nurmi and Niemelä, 2018). Promotion can be done through
online marketing or by adopting various techniques of promoting product such as personal
selling, direct marketing, email marketing etc.
Michael Porter's strategy
This strategy defines profitability of the firm that it is above or below from the market
forces. This helps in gaining competitive advantage by providing lower cost and the
differentiated product to its customers. For achieving performance in the market it uses three
elements such as cost leadership, differentiation and Focus.
Cost Leadership: - In this firm is setting cost for future course of action. Sources that is being
used in the firm will create cost advantage in the market. Smart Home Solutions is providing
lower cost product to the customers that will help in increasing sales of the company. Lower cost
producer always try to take advantage in the company. This will be depended on the performance
of the company. By providing product that is of lesser cost will become popular in the
marketplace. As product of the company is selling in more quantity as compared to others and it
will become cost leader.
Differentiation: - This element defines uniqueness of the product as compared to another
companies in the market. It sells unique item so that it will attract more customers towards
company that is being provided differentiated product to customers. Selling different product
will help in increasing sells as customers are more likely to purchase product that is unique from
the other product. This uniqueness will differentiate product from other companies that is being
sold and will create many offerings to its customers.
Focus: - This strategy will mainly focus on competitive areas that will help in improving it for
future course of action (Phadermrod, Crowder and Wills, 2019). This will also include many
segments on which company is focusing for future course of action. This will lead to increase
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sales in future and it will create more customer focus in the company. Therefore, this strategy
help in attracting more customer towards Smart Home Solutions.
PESTEL analysis
This analysis is used to monitor and identifying external factors of the company that will
affect working of it in future course of action.
Political Factors
This includes political instability of the country, government policy, labour law,
environmental law and different trade restrictions depend on the economy of the country. As
Smart Home Solutions working will be affected if the country's political condition is not good.
As there are government policy that will affect functioning of the company.
Economic Factors
This includes exchange rates, inflation rates, interest rates and unemployment rates that
will affect economic condition of the company. These factors affect purchasing power of the
consumer as during inflation prices gets high so consumer will not able to buy product at that
price. Thus, this will decrease flow on money in the market.
Social Factors
It includes population growth rate, health consciousness, income distribution, lifestyle
and attitude (What Is a SWOT Analysis, 2019). These will affect the culture of the company as
different companies is having different culture of employees working so sometimes due to
conflict it will affect working of employees in the company.
Technological Factors
This include innovation, automation, research and development. Adopting new
technology is difficult for Smart House Solutions as it will increase operation cost of the
company.
Environmental factors
This will include weather, climate, tourism, farming and agriculture. Weather will disturb
the functioning of company that will increase maintenance cost of the company. If the climate is
not good at the workplace then it will affect functioning of the company as well as affect
employees working in the company.
Legal Factors
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This will include different laws that will affect functioning of the company such as
discrimination, employment, consumer protection laws etc. This will affect functioning of and it
will difficult to manage all the things in the company.
7. The team
Organizational structure
This is defined as system that outlines the certain activities that are directed in terms to
achieve goals of the enterprise. Henceforth, business will be structured in terms to maximise the
efficiency. Therefore, enterprise will follow the line structure in which the president or CEO is at
the top level. This is very rigid structure. Additionally, line structure has only its direct, vertical
relationship between various level in the firm. In this, there are total of the 3 partners.
On what basis you are forming the team
For the new set up, Team will be formed with 4 partners and they will handle their day to
working within the enterprise. By assigning the activities as per their capabilities the all over
things can be done in better mode. Therefore, team will be formed with the help of four phases-
in which at the forming stage a team will discusses the aim, define and works as to assign task,
establish the particular deadline to each task and aids to form personal relationship.
8. Marketing plan
Niche product or mass product
Home automation tool will be the niche products that aids to put focus on Smart
application services that intended to target (Gutiérrez and Baquero, 2017). Thus, home
automation products will create the unique image and experience to the customers. Henceforth,
this aids to put focus on need smart commodities that supports to create the well and attractive
house.
Marketing
It is defined as an activity that inclusive of set of institution, processes that helps to
creating, communicating and delivering the service effectively. This is defined as the process of
planning, executing the conception, pricing, promotion and distribute the new ideas with
customers so that brand image within the market can be sustained for long.
In order to undergo with the good marketing strategy, the four components must be used
correctly. Therefore, each entity needs to successfully market the product and services. To
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conduct the marketing activities effectively, the entity needs to make better public relations,
product, packaging, pricing and a bit of product development.
Logo or slogan or both
A-Z entity will have the use of slogan as “Advanced Home automation leads to smart
saving”.
Competitors of the product
A-Z smart home automation tools and this firm has number of competitors within the
market as Gulf automation system co., smart Globe KW and Aurora Smart home etc. This all
brand provides the specialize wireless home automation system that aids to provide good and
effective services to the customers. Henceforth, by offering the technical advancement tool of
low voltage aids to have good automation system.
Direct or indirect or potential
Direct competition is the situation in which the two competing business are the indirect
competitors. Therefore, they contrast with direct competitors for the same potential market.
Herein, Gulf automation system co., smartGlobeKW and Aurora Smart home etc. all are the
direct competitors of the smart home automation market.
Indirect competitors are the entities that defined slightly differ product and service but
works as to target the same need. They are the competitors who are substitute to each other.
Diversification
A-Z home automation tool will enter into the new market or industry in which the
business is currently operating. This form of the the strategy will helps to organizational business
to grow. With the help of this strategy the enterprise will not only diversified its product
offerings in the new market but also can work as to expand their business horizons. Therefore,
firms can decide to diversify the activities with help of expanding into market and commodities
that are relate with the current business. Herein, it allows firm to attract customer with new
product and services in target market.
New product- New market
A-Z home automation tool is the entity that can start to undertake their business services
in the market of Kuwait that is Premier market as it is the main market. By promoting the
products as the smart home solutions in the new market aids to attracting the customers.
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By promoting the product in the new market, the entity can able to undertake its business
services effectively. This kind of activities aids to conduct the whole things in better and
attractive mode.
Existing product- existing market
In order to get compete with the existing commodities and services within the market, the
firm needs to undertake the business operations effectively and efficiently. To get compete
within the market the enterprise needs to bring modification in their existing product and
services. This aids to conduct the business operations systematically and effectively.
Market skimming
It is defined as an approach in which producer sets the high introductory price that can
attract the buyer with desire for the product and resource to buy it. Henceforth, it can be stated
that to attract the customer with new enterprise and services the entity needs to select the
skimming strategy in order to grab the maximum revenue within short term and this leads to get
maximum sales. Therefore, the high price is interpreted as sign of the high quality.
9. Operational plan
This is one of the strategic plan that aids to carry out the course of action so that entity
can undertake its activities effective and efficiently. Thus, it will be framed in following manner
as-
Human capital- A- Z entity will take their business activities with the of four members.
Henceforth, staff and skills require to implement the process as well as potential sources if these
resources. By hiring the suitable employees, the entity can able to undertake the operational
activities effectively.
Financial requirements- Effective funding leads to carry out the business activities
systematically. By allocating proper funding the needs of the all resources can be sorted
effectively.
Risk assessment- Smart home automation is the one of the tool that need to get compete with
the existing producer of home automation commodities. Therefore, the competition within the
market can be the risk that can affect the working of enterprise.
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Estimation of project life span- One proper deadline must be given to each task, that will help to
undertake the task effectively and efficiently. Henceforth, by assigning the deadline to each task
the all things can be undertaken effectively.
10. Financial plan
Sources of funds
In order to have the fund the funds for the business the owner can have various sources
such as retained earnings, term loans, working capital loans and euro issue etc. Therefore, the
sources for the medium terms is inclusive of the borrowing from financial banks, public deposit
and to take the loan from financial institution etc. for this in 2nd year each of the partners will
invest $25000 through bank loan.
Break even analysis
NET SALES 350000
EXPENSE VARIABLE FIXED
COGS 87500
LABOUR 15000 35000
RENT 0 12000
GE 14000
TOTAL EXPENSE 102500 61000 163500
NET PROFIT BEFORE TAX -186500
Cash flow statement
YEAR 1 YEAR 2 YEAR 3
CASH SALES 350000 225000 350000
LOAN 0 100000 0
NEW EQUITY 200000
TOTAL RECEIPT 550000 325000 350000
PAYMENT
Cash purchases 50000 50000 50000
Payments to creditors 60000 60000 50000
Salaries and wages 100000 100000 100000
Employee benefits 70000 50000 50000
Payroll taxes 20000 20000 30000
Rent 40000 30000 40000
Utiltities 17000 15000 25000
Repairs and maintenance 20000 15000 15000
Insurance 20000 16000 16000
Travel 20000 17000 19000
TOTAL PAYMENT 417000 373000 395000
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CASH SURPLUS AND DEFICIT -133000 48000 45000
Profit & loss
Particulars Figures (in £)
Sales 350000
Less: COGS 87500
Gross profit 262500
Less: indirect expenses 25000
Selling & distribution expenses 10000
Administration expenses 10000
Other expenses 12000
Total expenses 32000
Operating profit 230500
Less: tax
Net profit 230500
Balance sheet
Opening Year 1: Year 2: Year 3:
ASSETS
Current Assets
Cash 150,000 160,000 170,000 180,000
Marketable securities 60,000 20,000 40,000 50,000
Accounts receivable, net 20,000 23,000 63,000 63,000
Inventory 12,000 22,000 23,000 33,000
Prepaid expenses 30,000 30,000 25,000 23,000
Other 12,000 12,000 12,000 12,000
Total Current Assets 284,000 267,000 333,000 361,000
Long-Term Assets
Property, plant, and equipment 23,000 23,000 25,000 14,000
Less accumulated depreciation 16,000 15,000 15,000 11,000
Net property, plant, and
equipment 7,000 8,000 10,000 3,000
Other long-term assets
Total Long-Term Assets 7,000 8,000 10,000 3,000
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Total Assets 291,000 275,000 343,000 364,000
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt 15,000 15,000 15,000 14,000
Current maturities of long-term
debt 15,000 15,000 15,000 16,000
Accounts payable 11,000 10,000 12,300 19,000
Income taxes payable 15,000 15,600 14,000 18,000
Accrued liabilities 16,001 15,000 14,000 13,000
Other 1,000 1,000 1,000 1,000
Total Current Liabilities 73,001 71,600 71,300 81,000
Long-Term Liabilities
Long-term debt less current
maturities 16,000 15,000 23,000 25,300
Deferred income taxes 10,000 45,000 30,000 35,000
Other long-term liabilities 15,000 15,000 20,000 25,000
Total Long-Term Liabilities 41,000 75,000 73,000 85,300
Shareholders' Equity
Common stock 23,000 30,000 36,000 39,000
Additional paid-in capital 36,000 35,000 30,000 40,000
Retained earnings 25,000 45,000 26,000 17,000
Other 10,000 10,000 10,000 10,000
Total Shareholders' Equity 94,000 120,000 102,000 106,000
Total Liabilities and
Shareholders' Equity 208,001 266,600 246,300 272,300
Income statement
YEAR 1 YEAR 2 YEAR 3
SALES 350000 225000 350000
COGS 87500 56250 87500
GP 262500 168750 262500
OPERATING EXPENSE
Salaries and wages 50000 45000 45000
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Employee benefits 15000 10000 13000
Payroll taxes 25500 13000 14000
Rent 12000 12000 15000
Utilities 14000 5250 12000
Repairs and maintenance 18000 10000 8000
Insurance 25000 40000 4000
Miscellaneous 13000 3500 1500
NP 90000 30000 150000
20

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