Buster's Business Expansion Plan

This assignment examines the challenges Buster, an organization expanding to a two-store operation, faces. It delves into government regulations, new location guidelines, team roles, marketing strategies, product quality maintenance, and funding sources like bank loans. The report emphasizes addressing these challenges for successful expansion.

Entrepreneurship

Table of Contents
1. INTRODUCTION.......................................................................................................................1
2. Organization oft the business and the key players involved........................................................1
3. Finances involved........................................................................................................................2
4. Marketing.....................................................................................................................................4
5. Operations....................................................................................................................................5
6. Legal issues .................................................................................................................................5
7. Major challenges that might affect the performance of cited firm..............................................6
Conclusion.......................................................................................................................................7
REFERENCES................................................................................................................................8

1. INTRODUCTION
The business plan that has been referred in the report is about a new venture of Buster. It
wants to expand its business to a two-store operation from one-store (Ács, Autio and Szerb,
2014). It is a store located in the office building lobby. The products it offers include snacks,
beverages, greeting cards, newspapers wrapped sandwiches etc. It wants to expand its business in
order to form a chain of 10-15 stores that will be located in down-town buildings of office.
2. Organization oft the business and the key players involved
a.) Owner:The owner of Buster is Ms. Marsha Jones who is also responsible for managing
various activities associated with it. She is responsible for managing the various employees that
are working in the store. Also, the stock that is to be kept in the tore is also decided by her. She is
highly qualified because of her experiences at the department stores in down town London where
she was applauded for her enhanced management skills. Currently for managing
b.) Legal structure of company: The type of business structure that is chosen has a huge impact
over many aspects which include liability, taxes involved an also the strategy for exit (Bae and
et.al., 2014). Henceforth, the legal structure that is currently followed by Buster is sole
proprietorship, since Ms. Jones is the single individual owner of such an unincorporated business
venture. With the help of such a structure they are easily benefited in terms of savings and the
regulations imposed by tax.
c.) Management team: The management team of Buster operates under the supervision of Ms.
Jones. The team works for almost 30 to 40 hours a week and is responsible for carrying out
activities for effectively managing the tasks of store. Also, based on the current scenario, the
business plan involves expansion to a two store operation so, efforts are being done by the team
so that the objective of the store would be achieved.
d.) Employees: These are responsible for carrying out the activities within the store. The
management team after deciding the activities assign the roles to the respective employees who
efficiently mange to complete the sales targets and other activities such as satisfying the
customers (Baum, Frese and Baron, 2014). Employees of an organization are responsible for the
overall working efficiency of an organization as a whole. If employees are not able to do their
duties in effective manner then, the overall brand image of Buster will definitely be affected.
e.) Contractors: The vendors of Buster stores are very much effective because they are able to
deliver the supplies on time. As a result of this, the stock is managed effectively. However, at
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times environmental factors do affect the supplying of materials such as storm or any other
natural calamity.
3. Finances involved
a.) Operating costs involved within the new business: The monthly expenditure is a result of
many daily activities that are conducted within the store. These include the daily supplies of food
items and newspapers from suppliers. The food items are a necessity because they have to served
fresh to the customers. Other supplies such as greeting cards are ordered whenever the stock goes
empty. No requirement is there on regular basis. Also, cleaning of the store on a daily basis also
accounts for the costings. Furthermore, since it is expanding into a two store operation the
costings will be doubled. Now the costings that are involved within the currently running store
will be applicable to Buster also, so overall costings will get doubled. Also, the indirect costings
will also be involved. They might be the electricity bill costs. Because the amount of electricity
used every day is not fixed so it is has an indirect impact over the costings.
b.) Investment requirements in order to launch new product: First of all the main requirements of
revenues will be in the facilities of furnishing. The overall furnishing has to be done so that the
new store will be more enhanced and presentable. Based on advanced technology the store will
also be applying new technologies that would ease the work load of employees. They would get
to know new methods of doing their tasks. So these will certainly involve expenses related to
inventory purchases made by store (Bruni, Gherardi and Poggio, 2014). In addition to this,
during the initial six months of operation the store needs to meet the payroll. So this will also
further add up to the costings.
c.)Anticipated revenue: The annual revenue of Buster is usually between $150,000 to $300,000
that is the monthly expense are about $19,000. So the new venture will involve more revenues.
The reason is that the initial start up cost will also add up to the costings. Moreover, for
effectively carrying out the activities, addition of new technologies will also add up. So, overall
the anticipated revenue will be near about the double of $19,000.
d.) Pro-forma projection of cash low for the initial year of operation:
Revenues Mont
h 1
Mont
h 2
Mont
h 3
Mont
h 4
Mont
h 5
Mont
h 6
Mont
h 7
Month
8
Mont
h 9
Mont
h 10
Mont
h 11
Mont
h 12
Electricity Bill $5,00 $4,00 $5,0 $4,00 $3,50 $4,50 $5,00 $4,60 $5,00 $4,00 $3,50 $5,00
2

0 0 00 0 0 0 0 0 0 0 0 0
Advanced
technology
techniques
$10,0
00
$9,00
0
$9,0
00
$8,00
0
$7,50
0
$5,00
0
$4,00
0
$6,00
0
$4,00
0
$4,00
0
$6,00
0
$4,50
0
Total Revenue $15,
000
$13,0
00
$14,
000
$12,0
00
$11,0
00
$9,50
0
$9,00
0
$10,6
00
$10,6
00
$9,00
0
$9,50
0
$9,50
0
Costs
Rent $2,00
0
$2,00
0
$2,0
00
$2,00
0
$2,00
0
$2,00
0
$2,00
0
$2,00
0
$2,00
0
$2,00
0
$2,00
0
$2,00
0
Payroll $5,00
0
$5,00
0
$5,0
00
$5,00
0
$5,00
0
$5,00
0
$5,00
0
$5,00
0
$5,00
0
$5,00
0
$5,00
0
$5,00
0
Materials $1,50
0
$1,50
0
$1,5
00
$1,50
0
$1,50
0
$1,50
0
$1,50
0
$1,50
0
$1,50
0
$1,50
0
$1,50
0
$1,50
0
Salary of
employees
$500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Total costs $9,00
0
$9,00
0
$9,0
00
$9,00
0
$9,00
0
$9,00
0
$9,00
0
$9,00
0
$9,00
0
$9,00
0
$9,00
0
$9,00
0
NET CASH
FLOW
$6,00
0
$4,00
0
$5,0
00
$3,00
0
$2,00
0
$500 $0 $1,60
0
$1,60
0
$0 $500 $500
e.) Payback pointy from anticipated cash flow:
The time that is required for the net cash flow or revenue to payback the investment that
is done initially is known as Payback-point.
From the cash flow above it can be found out that the initial month cash flow was found
out to be $6,000. So looking back at the revenues it can be seen that the net cash flow was
recovered within the initial month itself. The reason for this is that the quality of services and
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products offered by the store is so much good that it can recover its initial investment within the
initial month.
f.) Anticipated return over the investment done: From the cash flow, it can be easily seen that
return of initial investment could be done within the staring months of operation. So The
expected return would be double the amount of money invested.
4. Marketing
a.) Marketing strategy: For effectively analysing the market an organization adopts various
marketing strategies. It gives them the idea to carry out their business in effective manner
(Carland, Carland and Stewart, 2015). So, Buster also follows some strategies that prove to be
quite beneficial.
Since it is a store that offers various varieties of products including snacks, greeting
cards, beverages, etc., the strategy that could prove to be most beneficial is branding. The store
needs to do branding of its products to attract customers. It also ensures high value of market
share. If proper branding is done then, the market share of the organization will be increased
thereby affecting its positioning in the market.
Another technique or strategy that can be used is Relationship management. In it the store
maintains a proper relationship with consumers by delivering them with quality products and
services.
Also in order to manage all their tasks efficiently Buster store can utilize the technology
by using digital marketing. They could take help of e-commerce for advertising and promoting
their products. This will definitely increase their sales.
b.) Marketing requirements for business:
1.)Price: The pricing of the products should be done such that consumers find that price
worth it. For this the store needs to maintain the quality of their products and satisfy the
customers accordingly.
2.)Product: The product should be of high quality s that the customers are pleased with its
quality. For this, the suppliers need to be analysed regularly so that the raw materials or finished
products received can be quality approved beforehand (Carland and Carland, 2015).
3.)Promotion: This is the most important factor. Since the store wants to expand its
business into a two store operation, therefore it becomes necessary for the organization to
promote it business in the down town London and other areas of operation.
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4.)Place: Since the store will be opened in a nearby office building, so it is necessary that
the store is able to deliver services and products keeping in mind the location of it. The
distribution will be done effectively if it takes help of online marketing as well.
c.) Competition: Being a retailer store, it will definitely face tough competition from other stores.
There are many stores in London that will prove to be tough competitor. They can overcome
Buster by making their products available at rates lower than those of the cited firm. So there
might be a possibility that it reduces its price. However, this should not be the final choice. In
order to face competition Buster should focus on enhancing their quality so that customers do not
consider the high price factor seeing the quality.
5. Operations
a.) Business location: The current store operates in a small lobby of an office building. The
expansion needs to be done in a new office building that will be constructed two blocks away
from it. So Buster needs to expand its business to that office building. Thus, the location will be
an important factor. It needs to follow the guidelines that will be offered there. It needs to make
full utilisation of such a location (Drucker, 2014). Also, managing both the locations effectively
will be quite challenging. The finances should also be managed effectively of both locations. No
such problem should arise that one location has been affected because of all the financing done
over new location. The location should be also considered because it will help in keeping the
customers attracted towards their services.
b.) Operating the business: In order to expand the business into a two store operation, the store
needs to keep in mind certain points. The first thing that Buster should focus upon is the
operation hours. This has to based upon the current position of store. Each of the workers in
current store operates for about 30 hours a week. So Buster should ensure that the working hours
are more or less equal to that of current store.
Furthermore, the procedures that are required to be followed by the store in terms of
production of goods/products have to be followed. The supply of stock should be done on time.
The time taken that is required for delivery of products to the existing stores should be
considered and supplies should be provided within the same time limit.
If any issues emerge out in the process of carrying out the business at the new store, then
a special team should be made in advance so that the extra issues could also be addressed
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(Kirzner, 2015). These might include handling of complaints of consumers, staff related issues,
delay in supply because of environment related factors.
6. Legal issues
a.) Addressing of the legal issues involved:For addressing the legal issues the cited firm needs to
follow certain rules and regulations. The liability of Buster over new location is an important
facto. Also, the liability of it over the available resources needs to be considered as well. They
will affect the overall business of Buster. Since it will be operating in a new office building
therefore it is important that the store stays abide by the rules and regulations that are set by the
owner of that building. Also, since it will rent a part of that building for opening of new store
therefore, the costs in respect to it needs to be paid accordingly.
Furthermore, the structure of business that the Buster will follow should be made
according to the guidelines that are given by the top management staff. The structure should be
made in such a way that, the remaining other premises of the building should not be negatively
affected. All the workers and other staff needs to follow the structure that has been set for the
betterment of the cited firm.
Also, there are certain commercial laws, that have to be followed by the organization.
The reason for this is that in order to stay in the business, it has to stay abide by the terms and
conditions that those commercial laws imply. Whenever the commercial is made it needs to issue
the copyright so that no other organization can copy it.
b.) Handling of legal issues: The expansion of the store into a two-store will be a complicated
task. Opening a new venture, that too in a new office building, will involve various sorts of legal
issues that have to be handled effectively by the cited firm (Kuratko, 2016). Therefore, first of all
the store should employ a legal in-house attorney or counsel for handling all sorts of legal issues
that can come in the way of Buster's operation. The matters that are usually out of reach by the
internal parties associated with Buster, can be handled by taking help from the external legal
services. External agencies can be consulted for handling of issues that involve government
policies. The legal counsel of Buster can take help of these external agencies for handling very
complicated legal issues.
7. Major challenges that might affect the performance of cited firm
The expansion into a two store operation will definitely not be an easy task. Other retailer
stores will definitely give a tough competition to it. It is obvious that for expanding into a new
6

office building, store needs to stay abide by the terms and condition set by the owner of the
same building. Sometimes, it may be possible that a particular term might go against the strategy
that is already planned by Buster. So this is a major part of challenges to be faced.
Furthermore, the funding of Buster will also be a challenge. Since it is a non government
organization, so it needs to look upon his sectors. However, it can take help of bank loans which
might be returned with the profits earned in their initial months of operation.
They also need to provide the customers with same quality products as offered by the
existing store. So that its brand image is not affected and also investors also get pleased (Storey,
2016).
If all the challenges are addressed properly then, the idea of expansion into a two store
operation will prove to be a huge success.
Conclusion
From the report, it can be finally concluded that in order to expand a business, various
guidelines and policies associated with the new location and also the government have to be
followed. Also, the role of various members of the cited organization have to be analysed in
effective manner so that the selected marketing strategy could be followed accordingly. This
will as a whole enhance the overall performance of organization.
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REFERENCES
BOOKS AND JOURNALS
Ács, Z. J., and Autio, E. Szerb, L., 2014. National systems of entrepreneurship: Measurement
issues and policy implications. Research Policy. 43(3). pp.476-494.\
Bae, T. J., and et.al., 2014. The relationship between entrepreneurship education and
entrepreneurial intentions: A meta‐analytic review. Entrepreneurship Theory and Practice.
38(2). pp.217-254.
Baum, J. R., and Frese, M. Baron, R. A., 2014. The psychology of entrepreneurship. Psychology
Press.
Bruni, A., and Gherardi, S. Poggio, B., 2014. Gender and entrepreneurship: An ethnographic
approach. Routledge.
Carland, J. C., and Carland, J. W. Stewart, W. H., 2015. Seeing what's not there: The enigma of
entrepreneurship. Journal of small business strategy. 7(1). pp.1-20.
Carland, J. W. and Carland, J. C., 2015. A model of potential entrepreneurship: Profiles and
educational implications. Journal of Small Business Strategy. 8(1). pp.1-14.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Kirzner, I. M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D. F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Storey, D. J. ed., 2016. Entrepreneurship and new firm. Routledge.
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