MGMT 316: Comprehensive Business Plan for Sporty Drinks Proposal

This project presents a detailed business plan for Sporty Drinks, an energy drink company proposed to be established in Ontario, Canada. The plan encompasses a thorough market analysis, identifying the target market as sports persons and fitness enthusiasts, and assessing the growing energy drink industry. It outlines the company's management structure, human resource requirements, and marketing strategies, including social media promotion and a low-cost model. A financial strategy is presented, detailing startup expenses, profit and loss statements, balance sheets, and cash flow forecasts. The plan aims to provide a roadmap for the business, addressing market trends, strategies, and financial projections, while also fulfilling the requirements of MGMT 316, and the goal of building a comprehensive report for stakeholders.

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Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
Target Market and Market Survey...............................................................................................4
Management and Ownership.......................................................................................................4
Human Resource Requirements..................................................................................................5
Marketing Strategy......................................................................................................................5
Financial Strategy........................................................................................................................6
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................10

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Introduction
The main purpose of the assessment is to analyze the business proposal which is planned
by the management of the company. The business which is considered by the management of the
company is engaged in production and distribution of energy drinks. As per the management of
the company, the name of the proposed business would be Sporty Drink. The product which is
being offered by the business is highly hygienic and it is expected to be a useful product for
sports person and gym. The assessment also identifies potential customers and target market of
the business along the different strategies which the management of the company would be
following for the purpose of enhancing the sales of the business (Burns & Dewhurst, 2016). In
addition to this, the assessment would also be including a financial forecast for the business
determining the sales, costs and profits which can be generated by the business. As per the
decision of the management, the business would be established in Ontario region of Canada and
the management anticipates that the business would be able to attract customers and thereby also
generate revenue,
Discussion
As per the market survey conducted by the management of the company, Ontario would
be an ideal place for starting a new business for the energy drink product. There has been
significant growth in the energy drink industry and the same also has an annual growth rate of
14.3% in US. In Canada as well, the industry is growing at an annual rate of 5% roughly and the
revenue which is generated from such an industry is also showing positive trends.

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Figure 1: Sales volume of Energy Drink Market
Source: (Statistic.com)
The above figure shows the growth in the energy drink market which has been significant
during the years. The estimates which are presented also contains forecasted results for 2019
onwards which is also shown to be growing. Therefore, it can be clearly said that the business is
in its developing stage and can have a lot of potential for making revenue in future.
Target Market and Market Survey
The market for energy drink is rapidly growing as the emphasis of young generation is
more on health products and products which can replenish their energy and help in building
muscles. The target market of the business as per the plan of the management would be sports
persons and fitness freaks. The business also intends to offer different flavors to the customers so
that the management can attract their attention and thereby enhance their revenues. The market

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analysis shows that the business operating in the industry is quite successful. However, it is to be
noted that the level of competition in the market is very high and therefore appropriate strategies
are to be adopted by the management in order to ensure that the business is able to survive in the
conditions.
Management and Ownership
As per the plan of the management, the new energy drink business, Sporty Drinks would
be established on a small scale in order to test out how the market reacts to the new product. On
the basis of the reaction, the management of the company would be taking decisions whether or
not to expand the operations of the business any further. It is also a plan of the owners that the
business would be established as a private company form of business consisting of the owners
who would be directors of the business and would also hold a managerial position (Finch, 2013).
The partners would be contributing to the financial requirements of the business.
Energy drinks are a discrete class of beverage that can provide the consumer with an
instant boost of energy and also render certain health benefits. It is therefore for theses reasons
that owners believe that they can penetrate the new market and also expand in the market. The
owners are anticipating that by setting the business as a partnership, the business would be able
to acquire funds more easily and the overall risks which is associated with the business would be
distributed among the partners along with the profits which is generated by the business.
Human Resource Requirements
As per the plan which is formulated by the management, the business would be skilled
labours and also delivery personnel so that the distribution unit of the business can perform
efficiently. The business would be comprising of top management who are the owners of the

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business and all the major decisions would be taken by the owners. In the mid-level
management, the supervisors, managers and departmental heads would be working for ensuring
that the product which is developed is appropriate and meet the necessary quality standards
which the businesses are supposed to maintain. The low-level management would be consisting
of workers, cleaners, delivery personnel and sales personnel.
All the major decisions regarding the taste and flavour of the product would be decided
by the owners of the business. The owners would also be deciding on the basis of the demand for
the product whether to increase the scale of production or not. The business would also be
appointing a consultant and health expert who would be suggesting whether the product is up to
appropriate standards and whether any improvements are required to be made in the product
which is offered by the business.
Marketing Strategy
The marketing strategies of the business needs to be formulated by the management of
the company with the intention of promoting the product and ensuring that the sales of the
business is enhanced significantly. The management of the company has planned to conduct an
internal and external analysis in order to understand appropriately, the strengths, weaknesses,
opportunities and threats (Blackburn, Hart & Wainwright, 2013). The marketing strategies of the
business will be formulated with an intention to target the customers and also enhance the sales
of the business.
As per the plan of the management of Sporty Drinks, the business would be spending
extensively on advertisement and promotion of the product which is being offered to the
consumers. The business would be using social media as a medium to promote the product in the

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market and appropriately ensure that name of the product is spread far and wide. In addition to
this, the business in order to stay competitive in the market has decided to follow low cost model
so that the management can cut down unnecessary costs and thereby also offer the product to the
customers at a lower price (Boiko, 2013). This approach would help the management to attract
more customers and also get a competitive edge over its competition in the market (Afuah,
2014). The price for the product would be set according to the requirements of the business and
on the basis of the costs which is estimated by the management of the company.
The management would be creating value by offering the best quality of health drinks
which would not only be hygienic but also would be well contained which means that the
customers can also store the product for future use. In addition to this, the management has
planned that the product would be offered in cans as well so that the product is a fast moving
good and can be easily carried along with a snack.
Financial Strategy
As per the estimation of the management, the requirement of appropriate finance would
be the primary concern for the management of the company. The management considers that a
majority of the funds would be contributed by the owners of the business and a portion of the
capital would also be taken from loans so that appropriate capital structure can be established by
the management of the company.

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The above table shows the start up expenses of the business and the same appropriately
shows the initial fund requirements of the business and also the initial assets which would be
required by the management of the company (Lee et al., 2015). The table above shows that the
management would be accumulating initial capital from funds contributed by the owners and
also from loans which is taken by the management of the company. In addition to this, the
financial forecast which is presented above shows that the management of the company would be
covering the initial expenses of the business with the funds which is accumulated.
Profit and Loss Statement
The profit and loss statement which is prepared by the management of the company is for
estimating the total revenue and expenses which is generated by the business and also identify
the profitability of the business (Burns, 2016). The profit and loss statement which is prepared in
the appendix section shows that the gross sales of the business are $ 5,000,000 and the expenses
is estimated on the basis of the sales which can be achieved by the business. The analysis also
considers that out of the total sales, 10% of the sales would be sales return for any reason. The
gross profit of the business is shown to be $ 3,500,000 which is favourable and the management
anticipates that the same would enhance over the years. The profit and loss statement also
identify certain categories of costs which are related to the business and on the basis of the same
profits is estimated by the business. The profit which is generated by the business is shown to be
$ 978,000 for the period which is favourable.
Balance Sheet
The balance sheet is prepared by the business in order to estimate the different assets
which are used by the business in the operational process of the business. The balance sheet

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shows the fixed assets which the business would be utilizing and also the accumulated
depreciation on the same (Bentley, Omer & Sharp, 2013). The rate of depreciation is considered
on an estimation basis considering deprecating rates of competitors. The depreciation rate on
vehicles is considered to be 20% whereas on furniture, building and equipment, it is considered
to be 10%. The method of depreciation which is considered for the business is on the basis of
straight line method. The balance sheet also shows that the business would also be relying on
loans which are both of short term nature and long term nature.
Cash flow Forecast
The cash flow statement which is prepared by the management of the company
effectively identifies the cash inflows and outflows of the business and effectively shows the
cash positions of the business. The cash flow statement forecast is presented for a 6 months
period and estimation is shown on the basis of monthly estimations. The cash flow statement
effectively shows the inflows and outflows of the business.
Conclusion
The above discussion effectively shows the plan which is formulated by the management
of Sporty Drinks is appropriate and the management needs to move forward with the plans of the
business. The above discussion also shows marketing and financing strategies which needs to be
formulated by the business so that the operations of the business can be conducted smoothly by
the management of the company. Therefore, it can be said that the business proposal is viable
and holds a lot of potential for future.

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Reference
Afuah, A. (2014). Business model innovation: concepts, analysis, and cases. Routledge.
Bentley, K. A., Omer, T. C., & Sharp, N. Y. (2013). Business strategy, financial reporting
irregularities, and audit effort. Contemporary Accounting Research, 30(2), 780-817.
Blackburn, R. A., Hart, M., & Wainwright, T. (2013). Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development, 20(1), 8-27.
Boiko, I. (2013). Instruments of implementing the enterprises’ strategy. Economics and
Sociology, 6(2), 73-81.
Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship. Macmillan
International Higher Education.
Finch, B. (2013). How to write a business plan (Vol. 35). Kogan Page Publishers.
Lee, Y. K., Kim, S. H., Seo, M. K., & Hight, S. K. (2015). Market orientation and business
performance: Evidence from franchising industry. International Journal of Hospitality
Management, 44, 28-37.
Statistic (2019) "Energy Drinks: Sales Forecast Canada 2013-2022 | Statistic ." Statista. N. p.,
2019. Web. 15 Apr. 2019.