Business Design Report: Financial Analysis and Market Strategy

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This report provides a comprehensive analysis of a small business plan, focusing on the fictional Body Fit Pty Ltd, a fitness center. It begins with an overview of financial projections, including key highlights of the financial performance, profit and loss statements, and balance sheets, while also examining the business's performance measures. The report then delves into the business's operational aspects, covering stock recording, legal compliance, quality systems, and technology implementation. Part 2 provides detailed business specifics, including registration details, organizational structure, key personnel, products and services, and risk management. It also incorporates market research, competitor analysis, and advertising strategies to assess the business's market position. Furthermore, the report addresses financial considerations, including cash flow management, stakeholder communication, and strategies for debt collection. Overall, the report assesses the business's strengths, weaknesses, and potential areas for improvement, culminating in an action plan and financial review. The report is a useful resource for students studying entrepreneurship.
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Small Business: Business design
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Table of Contents
PART 1........................................................................................................................................................................................................1
Key highlights of financial projection.....................................................................................................................................................1
Key highlights of P&L a/c.......................................................................................................................................................................2
Key highlights of balance sheet...............................................................................................................................................................2
Measuring business success & decisions.................................................................................................................................................3
Stock recording & control........................................................................................................................................................................3
Legal & regulatory compliance................................................................................................................................................................3
Quality system..........................................................................................................................................................................................3
Performance measures.............................................................................................................................................................................3
Technologies/innovation..........................................................................................................................................................................3
Operations & revenue control system......................................................................................................................................................4
Suggestions for improvement..................................................................................................................................................................4
Technical & specialist skills....................................................................................................................................................................4
Financial backers requirement.................................................................................................................................................................4
Strategies for debt collection & debtor’s contingency.............................................................................................................................4
Cash Flow Management...........................................................................................................................................................................5
Stakeholders Communication..................................................................................................................................................................5
PART 2........................................................................................................................................................................................................5
BUSINESS DETAILS.................................................................................................................................................................................5
Registration details...................................................................................................................................................................................5
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Business premises....................................................................................................................................................................................6
Organization chart....................................................................................................................................................................................6
Management & ownership.......................................................................................................................................................................6
Key personnel..........................................................................................................................................................................................7
Products/services....................................................................................................................................................................................10
Innovation..............................................................................................................................................................................................11
Insurance................................................................................................................................................................................................11
Risk management...................................................................................................................................................................................11
Legal consideration................................................................................................................................................................................12
Operations..............................................................................................................................................................................................12
Sustainability plan..................................................................................................................................................................................14
THE MARKET..........................................................................................................................................................................................15
Market research......................................................................................................................................................................................15
Market targets........................................................................................................................................................................................15
Environmental/industry analysis............................................................................................................................................................15
Customers...............................................................................................................................................................................................17
Competitors............................................................................................................................................................................................19
Advertising & sales................................................................................................................................................................................20
THE FUTURE...........................................................................................................................................................................................21
Action Plan.............................................................................................................................................................................................22
THE FINANCES.......................................................................................................................................................................................22
Key objectives & financial review.........................................................................................................................................................22
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REFERENCES..........................................................................................................................................................................................24
APPENDIX................................................................................................................................................................................................26
Appendix 1.............................................................................................................................................................................................26
Appendix 2.............................................................................................................................................................................................26
Appendix 3.............................................................................................................................................................................................26
Appendix 4.............................................................................................................................................................................................27
Appendix 5.............................................................................................................................................................................................28
Appendix 6.............................................................................................................................................................................................30
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PART 1
Key highlights of financial projection
It is expected that the Jungle Gym will have an expected yearly sales value worth $536,650 at a gross profit of $378,690 (71%)
and net profit of $109,869 respectively for the 1st financial year. Balance sheet expects an equity growth from $104,905 to $214,774 &
$345,949 and all the debts will be cleared till 2nd year so that available cash funds can be used in the business for further business
opportunities exist in the market. As business sales volume is expected to grow from 5900 to 7500 during peak load in every month @
7.46 sales price, Jungle Gym will definitely have strong cash position.
Key highlights of P&L a/c
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
-20000
-10000
0
10000
20000
30000
P&L result-Actual
Sales Total expenditures Net profit
Jungle Gym’s sales showcase rising trend till the end of May to $22,990 and thereafter, declined to $19,750 in August and
afterwards, again reflect growing trend with the annual turnover of $243,610 which is substantial different from the expected
sales of $536,650.
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In the beginning period, its total expenditure was $24,871 due to high accounting & legal charges worth $1,775 and thereafter
remains constant to $23,346.
Due to overrun expenditure beyond the sales value, firm has incurred net loss except only in the month of Oct and Nov at a
profit of $494 and $3,304 respectively shows poor performance. In the whole year, Jungle Gym has reported an annual profit
of $38,067 which is less than projected return of $109,869.
Key highlights of balance sheet
Jungle Gym’s SOFP reported poor cash management as in 2016, its cash balance dropped down from $39,810 to $1203.
In the non-current assets, firm have L&B worth $120,000 and P&E has been depreciated by $9600 with a closing balance of
$40,400.
Jungle Gym has paid its secured loans as a result; it has been declined from $104,905 (equal to projected) to $54,553.
Measuring business success & decisions
After examining the results, it becomes clear that business did not operated as planned and Jungle Gym’s managers have to
make plans for boosting sales by attracting crowded audiences (Goldmann, 2017). Moreover, by putting cost control measures and
tighten control over the daily operations, return can be maximized and projected results can be achieved.
Stock recording & control
Looking to the financial statements, there was no opening & closing inventory items recorded. However, for the purpose of
inventory control, Jungle Gym has planned to implement electronic system through POS (Point of Sale) so that every transaction will
be automatically posted into the system.
Legal & regulatory compliance
Yes, business has successfully adhered with the legal requirement and applied necessary principles of risk management,
assessment, registration, license & permits (PAYG, GST, ABN, TFN), industrial code of practice and others. Besides this, Workplace
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Health & Safety policies (WHS) have been adequately followed ranked 10 out of 10 for hazard management by maintaining First Aid
& CPR certification of the workers and others.
Quality system
Jungle Gym targeted to offer high quality products, equipment & services. Owing to this, it is decided to implement QA
system to meet industry standard along with the ongoing continuous improvement technique (Goldmann, 2017).. It is ranked to 8
lower than expected ranking of 9 which suggest conducting customer satisfaction survey & staff survey for bringing improvements.
Moreover, QA system needs to be reviewed twice in a year to satisfy customer expectations.
Performance measures
Company reported net loss of 15.63% which shows poor performance that can be improved by cost control & sales
maximization plan (Room, 2016).
Technologies/innovation
It is being decided to implement ICT system including EFTPOS system which will be linked with the used accounting system.
EFTPOS system will process credit card, direct debit & cash transactions whereas accounting system process transactions like payroll,
inventory control, general ledger transactions & HR records so as to reduce the unnecessary cost of paperwork and provide
summarized reports to facilitate decision-making. As, Jungle Gym’s technology has been ranked 2 only in comparison to expected
ranking of 8 out of 10. Firm can be suggested to introduce online marketing, membership tracking, on the job staff training for
EFTPOS. For the innovation, it is ranked to 5 whereas expected ranking was 9, recommends that research industry leader’s
consultation & product & equipment marketing needs to be introduced.
Operations & revenue control system
In the operations, Jungle Gym planned to review their price mechanism regularly for the cost management under the revenue
control and also provided enough flexibility at the workplaces to their personnel.
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Suggestions for improvement
Jungle Gym needs to hire more expertise marketing personnel in the business to meet industry standard. It needs to control
expenditures& cost through continuously overlooking their pricing strategy and make necessary changes (Bibi and Amjad, 2017).
During the worst time, firm can decide to introduce other services also however, during the peak time; staff did not paid attention to
the service users. Therefore, it becomes necessary to train the staff and it is necessary to examine satisfaction level through customer
survey questionnaire to improve their customer services delivery system.
Technical & specialist skills
It is really important for the Jungle Gym to focus on maximizing marketing & technological skills among personnel via
running training sessions.
Financial backers requirement
Yes, it is successfully meet out through timely repayment of loan at monthly installments of $4196.
Strategies for debt collection & debtor’s contingency
No, Jungle Gym’s finance expert has to create the best financial plan for the debt collection & creates a right mix of debt &
equity for sound solvency.
Cash Flow Management
The financial analysis clearly reported poor cash management ($39,810 to $1203) because of ineffective growth in the sales
from casual gym, personal training, membership & fitness as well. Out of these, personal training & gym membership contributed
highest to the total turnover. The result suggest firm to implement cash flow management strategies for assuring sufficient cash
balance to finance daily operations. In this, decisions regarding sales enhancement and expenditure control needs to be made for
successful growth.
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Stakeholders Communication
Company had provided sufficient details regarding profitability to the stakeholders by producing financial accounts, P&L
however; balance sheet did not provided proper details regarding assets & liabilities.
PART 2
BUSINESS DETAILS
Registration details
Business name Body Fit Pty Ltd
Trading name Body Fit Pty Ltd
Date registered September 1st, 2016
Location registered Brisbane
Business structure Sole proprietorship
ABN 2222222
ACN 46-2222222
GST Registered on Sept, 15th 2016
Domain names Body Fit
License & permits Company registration
BN registration, ABN, TFN, GST, PAYG
Business premises
Business location
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Brisbane
Size: 800 Square feet, accommodation: 70 people
Buy/Lease: Lease
Organization chart
Management & ownership
Name of owners
Robert Sinclair
Details of management and ownership:
6
Owner/
Entrepreneur-
Manager
HR manager
Marketing
expert Operational
manager /Lead trainer
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Robert Sinclair alone will be the owner of the business and handle the top managerial position, hence, make policies rules and
decisions.
Experience
2 year experience in Marriott hotel & resort
3 year managerial experience in a retail business
5 year management experience in a Fitness Centre at local & international field
Key personnel
Current staff
Job Title Name Expected staff
turnover
Skills or strengths
Marketing professional Mr. Jack 12 month Excellent marketing knowledge
Good communication
Professional degree in the field of marketing
Minimum 3 year experience in marketing
Excellencies award
HR manager Mr. William 12 month Minimum 5 year experience in the management field
MBA in HR
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Conflict management skills
Good communication & decision making skills
Operational manager Mr. Noah 12 month Able to handle with operational issues
Sound managerial & leadership skills
Good analytical & decision making skills
Minimum 5 year experience & award in respective
field
Required staff
Job Title Quantity Expected staff
turnover
Skills necessary Date required
Marketing
professional
1 3 yr Excellent marketing knowledge
Good communication
Professional degree in the field
of marketing
Minimum 3 year experience in
marketing
Excellencies award
October, 2017
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