LSBM305 Small Business Management: London Organic Soap Business Plan

This business plan outlines the launch of an organic soap company, detailing the business structure, reasons for operation, product descriptions, manufacturing processes, and inventory handling using a just-in-time approach. It includes a business model canvas, market research strategies based on the 4Ps of marketing, and an explanation of the management and personnel structure, including the CEO's profile. The plan also provides financial projections, including a cash flow statement and statement of financial position, with interpretations of the financial data. The analysis indicates positive cash outflows for operating activities but highlights the need for improved profitability in subsequent years. Desklib offers a wealth of similar business plans and solved assignments for students.

BUSINESS PLAN

Contents
Executive summary..........................................................................................................................1
1.. Business description and structure....................................................................................1
a.) Reasons for operating business.........................................................................................1
b.) Description of selling products or services by the organisation.......................................1
c.) Explaining manufacturing process, method of inventory handling and other operational
details......................................................................................................................................1
d.) Describing value proposition to the customers.................................................................2
e.) Representing Business model canvas................................................................................2
2. Elaborating market research and its strategies...................................................................3
3. Explaining management and personnel of the organisation...............................................4
4. Computation of financial documents of the organisation...................................................5
Statement of Financial Performance: -...................................................................................8
REFERENCES..............................................................................................................................10

Executive summary
This report is considering the product of FMCG industry which is organic soap. The firm has several opportunities in the market such
as it is capturing the market share of those people who believe in hygiene and natural products. There are several risk associated with the
same such as government policies or legal structure of the specific country impacts the current performance of the organisation. The
organisation is focusing on each aspect such as minimum price so that it can become affordable by each market segment.
TASK
1.. Business description and structure.
a.) Reasons for operating business
There are several forms of legal structure available in every country. One of the form is business, in this each activity is conducted
with the purpose of earning profits which is necessary to sustain in the business environment. By satisfying the needs of the customer,
each business is capable to capture good market share. Specialisation can be achieved by the business and expertise results in the
increased revenue (Bevington and et.al., 2019.)
b.) Description of selling products or services by the organisation
The organisation is deciding to sell organic soap, it is the type of soap which are designed for every age group because there are
manufactured by considering the numerous factors such as skin type and able to be used in any type of weather. This soap does not
provide any harm to the body because it contains natural herbs and other ingredients.
c.) Explaining manufacturing process, method of inventory handling and other operational details.
The initial stage for manufacturing a soap is collection of raw material from the suppliers and selection of those suppliers which
are provide raw materials at low cost (Lipp, 2021.) Another phase is deciding the process of production, for organic soap it is crucial to
choose the materials and process by properly evaluating them. It involves melting of solid oil, setting temperature and adding sugar &
colours then add antioxidants and finally moulding and insulating the soap. The final stage consists cutting of soaps into creative pieces.
The management of inventory is a process through which an organisation tries to minimise the cost of handling and carrying the stock.
The organisation is using just in time approach; it produces organic soaps according to the demand of the customers so that stock piling
issues can be resolved.
d.) Describing value proposition to the customers.
Value proposition - It refers to the process of satisfying customers by identifying their needs from the specific product or service.
It is a strong weapon to build the reputation as well capture huge market share which eventually result in the increased revenue (Nawi,
2021.)
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e.) Representing Business model canvas
Business model canvas - It is a strategic model used to visualise the comprehensive view of the product model & structure,
activities performed, relationship with customers and key resources (Polite-Powers, 2020. The Business model canvas of the Organic soap
can be presented as given below -
Key partners
 Hygie
ne
industr
ies
 Devel
opmen
t of
busine
ss
 Invest
ors
Key activities
 Developm
ent of
product
 customer
services
and
negotiatio
n
 Marketing
plans
Value
propositions
 Easier in
transportat
ion
(Smooth
handling)
 Ease in
showering
Customer
relationships
 Diversific
ation of
products
 customer
service
 personal
relationshi
p
Customer
Segment
 Sportspers
on
 Youth and
celebrities
Key Resources
 Patent
 Differenti
ated
design
and shape
Channels
 Personal
selling
 Supermar
ket stores
Cost Structure
 research cost
 Cost of raw material
 Marketing expenses
Revenue Stream
 Proportion of sales( Rohmah, 2020)
2. Elaborating market research and its strategies
The marketing mix is a plan which is used to know the overall features of the product. For understanding the strategies adopted by
the Manufactures of organic soap can be explained by using the four Ps of marketing.
 Product - The product chosen by the organisation is organic soap which belong to the FMCG industry. In an enterprise, the firm is
also producing various variants such as sandal soap, lavender soap and rose are provided by the company. It increases the scope
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for variety to its customers (Singh, Sontakke. and Nayak, 2020).
 Price -The economic pricing strategy is used by the organisation to set the price at moderate level where each segment of the
market was able to purchase the product.
 Place - It is using decentralised approach for the distribution of the product. Retail outlets are available at near places which eases
the customers to reach the place of distribution.
 Promotion - There is also need to tell prospects about the company's products, benefits and its value to the customers. For
fulfilling the same purpose, consumers are using several tools. The techniques used by the firm are personal selling, it assists in
delivering the products smoothly and feedback can be taken instantly. however, it also includes huge cost but helps in capturing
market share (Structur, 2018).
3. Explaining management and personnel of the organisation
The management personnel of the organisation can be described as given below-
1. Chief executive officer –
The CEO of the organisation is Harvard edigale, he is serving job from 15 years and having a specialised knowledge in the field of FMCG
products. He has a passion for reading books and articles. Besides, business activities he is also contributing in corporate social
responsibility. Management is a process which is carried out to operate the functions of the organisation smoothly and effectively. It is
done to conduct the operations effectively. The organisation is applying several principles of the management given by several scholars.
The principle of division of work enables the organisation to divide the work according to the specialisation of the different persons. It
also applies the principle of chain of command by which employees has to follow the hierarchy of the organisational structure framed. It
creates discipline and reduces the ambiguity of the work (Trunina, Pryakhina, and Bilyk, 2021). Employees of the enterprise are following
the unity of command that simply means they are getting orders from the single person and reduces the overlapping of the tasks allotted.
For achieving organisational goals, the top level department of the organisation are focusing on maintaining harmony between the
employees which results in smooth functioning of the enterprise.
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4. Computation of financial documents of the organisation
Interpretation -
Cash flow statement
Cash flow Statement
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Particular
Januar
y Feb
Marc
h
Apri
l May
Jun
e July
Augus
t
Septembe
r
Octobe
r
Novembe
r
A. Cash flow from operating activities
Sales/Revenue 3060
459
0 6120 6120
612
0 9180
918
0 9180 9180 12240 12240
Payment of salary -3000
-
300
0 -3000
-
3000
-
300
0
-
3000
-
300
0 -3000 -3000 -3000 -3000
Rent Paid -216 -216 -216 -216 -216 -216 -216 -216 -216 -216 -216
Staff Wages -1000
-
100
0 -1000
-
1000
-
100
0
-
1000
-
100
0 -1000 -1000 -1000 -1000
Payment of Utilities -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100
Phones -3007 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10
Fright and postage -5 -5 -5 -5 -5 -5 -5 -5 -5 -5 -5
Stationary -2 -2 -2 -2 0 0 -2 -2 -2 -2 0
Promotion and advertisement -9000 0 0 0 0 0 0 0 0 0 -9000
Legal Expenses -50 0 0 0 0 0 0 0 0 0 0
Transport -50 -50 -50 -50 -50 -50 -50 -50 -50 -50 -50
Vehicle running -250 -250 -250 -250 -250 -250 -250 -250 -250 -250 -250
Insurance -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20
Maintained -100 -100 -100 -100 -100 -100 -100 -100 -100 -100 -100
Misc. Expense -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20
Setup cost -14600 0 0 0 0 0 0 0 0 0 0
Net cash flow from operating
activities:- -28360 -183 1347 1347
134
9 4409
440
7 4407 4407 7467 -1531
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B. Cash flow from financing
activities:-
Repayment of Loan -10 -10 -10 -10 -10 -10 -20 -20 -20 -20 -20
Interest Payment -50 -50 -50 -50 -50 -50 -50 -50 -50 -50 -50
Net Cash flow from financing
activities:- -60 -60 -60 -60 -60 -60 -70 -70 -70 -70 -70
C. Cash flow from Investing
activities:-
Initial investment made -40000 0 0 0 0 0 0 0 0 0 0
Net cash flow from investing
activities:- -40000 0 0 0 0 0 0 0 0 0 0
Total cash inflow/outflows(A+B+C) -68420 -243 1287 1287
128
9 4349
433
7 4337 4337 7397 -1601
Interpretation – From the above cash flow, it can be analysed that cash flow from operating activities in the month of January is 28360
and for the month of February it is negative. From the month of march to November, it showed a positive outflow. It can be signified that
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there is a positive cash outflows for the operating activities, inflows of cash are less than the outflows of the cash. It again showed a
negative outflow in the month of November and December. There is another activity classified in the cash flow is investing activity. In
this, it showed a negative balance of 40000 which shows that the organisation has made some investments but there is no existence of sale
of fixed or non-current assets. Cash flow from financing activity includes the repayment of loan and interest payment. The net amount of
financing activity is mainly negative. Therefore, it can be concluded that in the month of January and February the inflows of cash are less
than the outflows which means that organisation expenses are greater than its income.
Statement of Financial Performance: -
Statement of financial Positon for the year ended
Particular
Year
1 Year 2 Year 3
Shareholders’ Funds:-
Net Profit for the year ended 20355
14727
4
14727
2
Non-Current Liability:-
Loan taken 39820 39620 39420
Current Liability:- Nil Nil Nil
Total (A) 60175
18689
4
18669
2
Non-Current Assets:-
Other Non-Current Assets 60175
18689
4
18669
2
Current Assets:-
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Inventory Nil Nil Nil
Total (B) 60175
18689
4
18669
2
On the basis of above balance the conclusion can be that the loan taken by the business concern in regularly repaid by them on year to
year basis. Since it is a projected balance sheet of business plan therefore the inventory’s and assets of the enterprise are considered to be
Nil. However, over the period of time they may invest in multiple assets in order to progress or grow in future. The other noncurrent
assets reflected above represent the investment by the organisation and their investment raised in year 2 as compared to year 1 which
denotes capital investment of firm so that they can get competitive advantage against the competitors. The net profit of organisation is
constant in year 2 and year 3 which signifies that there is no growth made by the organisation in those respective years. However as
compare to year 1 they made reasonably higher profits by making reasonable changes or incorporate effective decision making in order to
increase their revenue and cut down the variable cost they incurred over the accounting period. In order to sustain in market, it is
important for the entity to regularly develop and amend their policies and takes corrective action so that funds can be utilised fruitfully to
enhance profits.
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REFERENCES
Books and Journals
Bevington, K.and et.al., 2019, December. Improving climate data visualization and information dissemination on the US drought portal
through user experience (UX) design. In AGU Fall Meeting Abstracts (Vol. 2019, pp. PA33C-1103).
Lipp, M., 2021. Business Plan-Vorlagen im Internet–Eine vergleichende Darstellung im deutschsprachigen Raum.
Nawi, N.F.I., 2021. Business Opportunity: Smily Orchid Bakery and Cake Company.
Polite-Powers, A.R., 2020. School-Based Oral Health Care in Rural Areas of Charleston County: Recommendations for a Business Plan
for Rural Federally Qualified Health Center Intervention.
Rohmah, K.A., 2020. Strategi Usaha Jamu dengan Business Model Canvas pada PT Gujati 59, Sukoharjo, Jawa Tengah (Doctoral
dissertation, Universitas Gadjah Mada).
Singh, H., Sontakke, S. and Nayak, S.K., 2020. Developing a detailed business plan (farm to fork model) for livestock (fisheries) in a
specific state (Jharkhand) of India.
Structur, F.R.S.B.S., 28. The smallness and leanness of the Riksbank’s balance sheet reflect its particular style in conducting market
liquidity operations. To maximize financial institutions’.
Trunina, I., Pryakhina, K. and Bilyk, M., 2021, September. Management of Competitive Advantages of Higher Education Institutions.
In 2021 IEEE International Conference on Modern Electrical and Energy Systems (MEES) (pp. 1-5). IEEE.
Wallace, C. and Haerpfer, C., 2018. Patterns of participation in the informal economy in East-Central Europe, 1991–1998 1. In The social
impact of informal economies in Eastern Europe (pp. 28-46). Routledge.
Warninda, T.D., Ekaputra, I.A. and Rokhim, R., 2019. Do Mudarabah and Musharakah financing impact Islamic Bank credit risk
differently? Research in International Business and Finance. 49.pp.166-175.
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