This presentation provides a review of high cost and low cost budgeting plans for SMEs, including their benefits and strategies. It also discusses the implementation and impact of these budgeting plans on revenue, expenses, and net profit.
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R E V I E WO FH I G HC O S TA N DL O WC O S T B U D G E T I N GP L A N BUDGETING PLAN FOR SME
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INTRODUCTION Marketingstrategyissaidtobeoneofthegreatesttoolforthe company who are aspiring to enter into a new business or trying to enter in a new project or stepping foot in a new industry. The very advantage of the marketing strategy is that it helps the company to minimize the cost and also helps the company to formulate a strict plan after taking the industry and market situation into consideration. This will also help the management of the company to take the decision.
REQUIREMENT OF BUDGETING PLAN FOR SME TherequirementofBudgetingPlanforSMEincludessome benefits (Cacciolatti and Lee 2016). They are provided below: Helps to manage the revenue and expenses of company very efficiently Helps the company to manage the cash flow of the company It helps the company to blend with the ever changing market and industry in which the company is involved in. It also helps in the pricing strategy of the company.
STRATEGY PLAN The best strategy for small and medium enterprise who wants to launch the insulated vessel in the market are provided below: •The company’s strategy should focus on the cost reduction of the product which they want to introduce in the market. •The strategy also put emphasis on the increase on the brand value of the company by providing well established service. •The strategy will also include the sales structure so that the growth rate of the company remains in upward slope (Dong, Liu and Lin 2014).
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Inthelowcostbudgetingplan10%increaseistakeninto consideration as it is observed that the revenue and sales has also increased in this process (Alomar and Pasek 2014). As there is a increase in sales it is also observed that the cost of goods sold also increased by 10%. It is also assumed that the expenses has also increased by 10%. It is also observed that the net profit also increased considerably. After the formulation it is seen that the company will gain the more net profit than its initial year.
HIGH COST BUDGETING PLAN
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In the process of the formulation high cost budgeting plan it is assumed that there will be a 30% increase in revenue and sales of the company. It is also assumed that there will be a 30% increase in the cost of goods sold in the company (Ganzarain and Errastin 2016). Hence the gross profit will also increase. It is also assumed that there will be a 30% increase in th expenses which will be incurred by the company while performing the business. After the formulation it is seen that the company will steep rise in the net profit of the company.
BIBLIOGRAPHY Alomar, M. and Pasek, Z.J., 2014. Linking supply chain strategy and processes to performance improvement.Procedia CIRP,17, pp.628-634. Cacciolatti, L. and Lee, S.H., 2016. Revisiting the relationship between marketing capabilities and firm performance: The moderating role of market orientation, marketing strategy and organisational power.Journal of Business Research,69(12), pp.5597-5610. Dong, J., Liu, C. and Lin, Z., 2014. Charging infrastructure planning for promoting battery electric vehicles: An activity- based approach using multiday travel data.Transportation Research Part C: Emerging Technologies,38, pp.44-55. Ganzarain, J. and Errasti, N., 2016. Three stage maturity model in SME's toward industry 4.0.Journal of Industrial Engineering and Management (JIEM),9(5), pp.1119-1128.