Developing International Business Plan - Desklib

This article discusses the key assumptions, factors affecting sales and cost projections, viability of the plan, and measures to mitigate risks in developing an international business plan.

Running head: DEVELOPING INTERNATIONAL BUSINESS PLAN
Developing International Business Plan
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Text Assignment #23.................................................................................................................2
Text Assignment #24.................................................................................................................3
1. Listing the key assumptions that underpin the projections for the business:.........................3
2. Listing five factors that could adversely affect sales projections:.........................................4
3. Listing five factors that could adversely affect cost and expenses projection:......................4
4. Under which of the circumstances would be the plan become unviable:..............................4
5. Detecting the measures that could be used in mitigating the risk:.........................................5
Reference and Bibliography:......................................................................................................6

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Text Assignment #23
1. Financial projections of the new business:
No
.
Worksheet for the Proposed Company
a The money needed for the commencing the project is $ 183,000.00, which is needed
for conducting certain expenses such as Cost incurred in market research, Equipment
Purchased, Website Development, Advertising, Legal expenses, Other expenses,
Furniture and Fitting.
b The overall capital needed for commencing the project is financed by the partners, as
there are no loans obtained for starting the proposed project.
c The funds need to be financed by bank loans and seed investors for commencing the
project.
d The fund will be needed before the start of the project, as relevant expenses needs to
be conducted by the company.
e The borrowing will be rapid after the completion of fifth year, as the actual income
and profits from the project is collected, which reduces the preserve on delivering the
loan amount.
f 40% of the venture could be sold for obtaining the required level of funds for the
project.
g The exit route will only be open after the commencement of third year of the project,
where the investor could take the money from business.
h Equipment’s, Furniture, and Fitting can be used as the collateral for the lease of loan
i No there will be no grants or loans to help finance the business
j There is not further private cash that is available to invest in the business

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k The key risk that might adversely affect projections of the project is the volatility
from external forces and economic condition.
l The reduction in cost structure and improvement in selling price could be used to
minimise the negative impact from these risks
Text Assignment #24
1. Listing the key assumptions that underpin the projections for the business:
The key assumptions that underpin the projection of the business is sales value, sales
volume, expected sales increment, variable cost, and fixed cost. The major product sold by
the proposed company is Tinhorn Creek Vineyards Kerner Icewine Oldfield Series, which is
priced at the levels of $29.99. Moreover, the second product Reif Estate Riesling Icewine is
priced at $29.95, which relatively summarizes the overall assumptions of sales value for the
new proposed project. Though, the sales volume is also assumed in the projection, where
estimated number of customers new the location, online customers and tourist are estimated
to detect the sales volume. The relevant estimation for increment in sales volume is also
conducted where the volume will rise by 5 % each month in year 1 and 2.5% in each month
in year 2 and 5% each quarter in year 3 to year 5. However, the estimation is also conducted
where no increment in sales prices is observed for the project.
The relevant costing estimation is conducted for you project, where variable cost for
the first year is 55% of the actual sales, while from 2nd year onwards its 50% of the actual
sales. Moreover, the fixed cost estimated for the project is at the levels of $80,000 for years 1

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and 2, while from year 3 to 5 the fixed cost will be $125,000. The overall estimation is
mainly conducted to detect the actual revenues which could be generated by the project.
2. Listing five factors that could adversely affect sales projections:
The five factors that could adversely affect sales projects of the project is current
global conditions, current industry conditions, rate of inflation, marketing efforts, and past
economic performance. The identified factors might affect the sales projections and reduce
viability of the investment scope from the project. The factors such as inflation and current
global conditions might directly affect the actual financial performance. Armstrong et al.,
(2015) stated that inflation plays a viable role in identifying the financial viability of an
investment, as it detects the time value of future cash projects conducted from investment.
3. Listing five factors that could adversely affect cost and expenses projection:
Labour wages, raw material cost, industrial production process, and inflation is
identified, as the factors, which might affect cost and expenses projection of the project. In
addition, the factors might directly affect cost projection of the project, which might hamper
project projection of the new project. Moreover, the factors could adversely affect the
projections prepared for the project and reduce viability of the investment scope. On the other
hand, Bullough et al., (2015) mentioned that without the projection of accurate cost and
expenses incurred in a project, the company could not approve its commencement.
4. Under which of the circumstances would be the plan become unviable:
The plans will only be unviable under circumstance such as increment in inflation
rate, economic conditions, sales projections, and cost projections of the company. Under
these circumstances the project viability will relatively reduce and hamper ability to generate
adequate returns from investment. In addition, under the above circumstance plan will

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become unviable for the company, which might hamper the actual financial performance of
the project. Increment in cost could also hamper the actual financial performance of the
company, while reduction in sales volume might decline the actual revenue that might
generate from the project (Burns, 2016).
5. Detecting the measures that could be used in mitigating the risk:
The use of zero based budgeting system could be conducted for reducing the negative
impact of above identified circumstances. The measure could help in reducing the level of
risk such as cost increment in the production functions. This use of zero based budgeting
system might help in detecting the cost incurred in each process and understand the actual
production cost incurred in the production system. Relevant omission can be conducted on
certain activities that does not contribute to the revenue generation capability of the company.
This might help in overcoming the circumstance and mitigating the risk involved in
operations. The risk involved in declining demand can be supported by improving the level of
customer reach by the company. The use of adequate marketing measure could eventually
help in improving the level of sales, which might reduce due to the negative impact of the
circumstances (Cramer, 2017).

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Reference and Bibliography:
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Bullough, A., De Luque, M. S., Abdelzaher, D., & Heim, W. (2015). Developing women
leaders through entrepreneurship education and training. The Academy of
Management Perspectives, 29(2), 250-270.
Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Cramer, J. (2017). Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
Neelankavil, J. P. (2015). International business research. Routledge.
Wild, J. J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education
Limited.