Sample - Business Plan1
Sample - Business Plan1
Sample - Business Plan1
Business Proposal
Promotors/Directors’ Details
Email [email protected]
Web www.abc.ie
“This business plan is confidential and is intended only for the person or entity to
which it is addressed. It shall not be divulged to a third party, without the authors’
consent in writing”.
Table of Contents
1.0 Executive Summary………………………………………………………………………...
..
..
..
..
..
..
6
5.2 Rigid Box Supply……………………………………………………………………..
..
6
5.3 Target Market…………………………………………………………………………
..
6
5.4 Competitive Environment……………………………………………………………
2
..
..
8
6.2 Channels of Distribution……………………………………………………………..
..
8
6.3 Summary SWOT Analysis………………………………………………………….....
..
10
..
10
7.2 Sales Forecasts………………………………………………………………………
..
10
7.3 Advertising…………………………………………………………………………….
..
11
7.4 Personal Selling………………………………………………………………………
..
11
..
12
3
8.1 Manufacturing Process………………………………………………………………
..
12
13
13
9.2 Discussion on Cash Flow Projections….……………………………………………
13
..
14
..
14
10.2 Profit & Loss Statements…………………………………………………………..
..
14
Appendices………………………………………………………………………………………...
16
4
Business Plan
Total working capital requirements required is €435,100 which will be funded as follows:-
€ 86,000 will be invested in to the business by the promoters (Equal Partners)
€45,200 will be secured via successful grant aid applications
€ 393,400 of lease finance will be sought during the first two years of business
The projected profit and loss statements indicate that the business will break-even in
year one and achieve profits of €55,000 in year two and €122,000 in year three.
Sensitivity analysis indicates that if the sales level fell to 75% of that forecasted in year
one, the net loss for the year would be €48,000 with the cash flow remaining at a
positive €44,000 at year end.
5
2.0 Business Background of Promoters
Thomas Murphy (confirm) has recently returned to Ireland having lived in the United
States for fifteen years. He was employed in various functions for ten years with a
leading manufacturer of rigid boxes. His most recent position was that of Plant Manager.
His company were suppliers to the software, CD-ROM etc. sectors. This has given him
considerable experience in the manufacturing of these products. Mr. Murphy (confirm)
re-located to Ireland due to family and personal reasons, and having considered a
number of employment options, decided to start up the business. Research undertaken
has demonstrated that there is no source of rigid box manufacturing in Ireland; currently,
users import their rigid box requirements from suppliers in the UK and mainland Europe.
John Swift (confirm) was made redundant during the restructuring of a multi-national,
and has over fifteen years experience in Sales Management, coupled with a very good
understanding of finance. He qualifies under the Seed Capital Scheme, which, along
with his redundancy payment, will provide his equity in the company.
The key business goal of the Promoters/directors is to become the preferred supplier of
rigid boxes in Ireland. Once this goal is realised, the promoters plan to assess the
potential of exporting initially to the U.K., and then into mainland Europe.
Improved technology and production methods have made the rigid box a viable
alternative to a folded box; this will serve to enhance the marketing process of several
potential customers. The scope for the provision of a ‘pack-off facility’ further improves
the range of services which ABC Packaging Limited can offer its potential customers.
6
3.0 Legal Status & Licence
It is proposed to operate the business through the legal entity of a limited liability
company called ABC Packaging Limited. The amount of shares to be issued will be
determined by the requirements relating to state support, borrowing facility and
investment.
There are no specific licences required to operate the business. A Health and Safety
Statement will be prepared prior to commencement of operations; the promoters will
seek the assistance of a consultant in this area.
Since quality assurance will be paramount to ensure customer confidence, the costs of
achieving accreditation to ISO9002 are included in the estimates. It is intended to obtain
accreditation as early as possible.
Preliminary discussions with the Planning Office have indicated that there is no need to
apply for planning approval. This is due to the fact that the proposed premises are
located in an Industrial Park.
The accountancy function will be outsourced initially. Books will be kept manually during
year one, but it is intended to invest in a computerised software accountancy package
(e.g. Sage) during year two.
7
5.0 Market Analysis
The market analysis conducted indicates that there are no other high volume suppliers
of rigid boxes in Ireland. At present, companies source their requirements in the U.K.
and Germany.
The rigid box supply base in Ireland is geared towards the manufacturing of low volume,
hand-crafted, expensive products to service a niche market; this market requires the
supply of a quality, volume fulfilment and pack-off service.
ABC Packaging Limited has set its sales target at €374k in year one, increasing to
€850k in year three. Year one target equates to a 10% share of the market (Refer to
table 1 for full breakdown of projected sales).
There is the possibility of extending the business into the area of order fulfilment, which
means on-line packing of products for customers. This will lead to efficiency, costs
savings and shortened lead-time for potential customers. However, it is the director’s
intention not to enter this sector in the initial three years of operation.
The initial approach with each market will focus on the provision of rigid boxes. Once the
customer relationship develops, and credibility is assured, the offer will be extended to
include pack-off.
9
6.0 Product Proposition
The business will produce and supply a range of quality, low cost rigid boxes, in real
time to customers in its market segments, using ‘Just in Time’ manufacturing and
logistics principles. Furthermore, the company will emphasise its product quality by
becoming accredited to ISO 9002 as quickly as possible (ISO 9002 is an internationally
recognised quality assurance system and will engender customer confidence in the
quality of our products).
As the product is quite technical, going direct to customers is the most effective route to
market strategy. To ensure customer specification / design is fully understood, face to
face sales and service is required. By offering expert advice it will be possible to identify
customer needs and find solutions to offer quality product at as low a price as possible.
A summary of the internal strengths and weaknesses, coupled with the external
weaknesses and threats are summarised overleaf in table 2.
10
6.3 SWOT Analysis
The SWOT Analysis succinctly captures the strengths and weaknesses of ABC
Packaging Limited, and points to the opportunities and threats that the market presents.
Strengths Weaknesses
Experienced employees with Brand Name not Established
specialist skills One-product focused
Proximity to Customer Locations
Reduced Order Size
Reduced Lead Time
High Quality Service & Products
Low Fixed Costs
Opportunities Threats
Growing Market New Entrant into Market
Offer an in-line packaging service Large Competitors
to customers Established Customer
Advance Production of main use Relationships and Loyalty
Items of customers to provide a Economic Turndown will Reduce
quick turnaround Sales of Crystal and Software
Products
11
7.0 Sales and Marketing Strategy
It is the intention to recruit a sales person when the finances of the business permit. This
person will be trained in the product specifications, management philosophy and the
manufacturing processes to ensure full product knowledge is acquired. This will ensure
that the sales person will be in a position to fully understand customer needs and make
intelligent recommendations.
Table 1: Forecasted Sales (Rigid Box Sales Potential V Total Potential Market)
*The demand for the product is continuous and linked to the fluctuations in sales of the customer base.
However as previously stated due to proximity of the customer locations it is anticipated that orders will be
repetitive and frequent.
12
7.3 Advertising
An overall marketing budget has been agreed to ensure the target market are made
aware of the product and its unique selling points. In terms of advertising, there will be
limited, but focused ads and editorial placed in a selection of relevant trade journals.
13
8.0 Operational Plan
ABC Technology Limited will supply a range of rigid boxes to the sectors as indicated in
Section 5.2.
The machinery sourced has the capability of finishing the product to the standard
requirements of each of the targeted sectors. The products will be designed to match
customer requirements with the company offering attractive, functional and unique
solutions. The manufacturing strategy ensures that ABC Packaging Limited act as a
technical design function to its customer base, thus ensuring customer satisfaction and
profitable growth.
The manufacturing equipment chosen is fully automated and requires limited labour
involvement, thus ensuring a competitive unit production cost.
The bulk of the raw materials required can be sourced in Ireland from a number of
different suppliers.
14
9.0 Financial Plan
Table 3 outlines the total funding required for the Business Venture.
Other purchases include the tools necessary to die cut and fold the rigid boxes. There is
no intention to invest in transport, as delivery of finished product will be outsourced. A
quality brochure will be produced to assist the sales efforts.
15
10.0 Financing the Plan
Grants 45,200
The promoters are making an equity investment of €68,000, and as a fall-back position,
a five year term loan of €10,000 will be sought from the bank.
In the event that the full capital amount required for the expansion during the second
year is not realised, the promoters will defer same until adequate finance becomes
available from the internal cash flow of the business.
16
The second and third year of operation show net profits of €55,092 and €122,602
respectively. Year three sales target equals 22.7% of the available Irish Market. The
business has set a target of realising a 50% share of the Irish Market by the end of the
fifth year of operation. This will result in a strong business and market leadership in
Ireland.
As indicated in Table 2, ABC Packaging Limited intends to expand into order fulfilment
by operating an “in-line” packaging service to its customers. This will be pursued during
the third year of operation, with the intention of commencing this service during year
four.
Potential customers showed a high level of interest in this service. Market Research
estimates that an additional sales level of €500,000 can be added by the end of the first
year by offering this service.
In the event of not realising forecasts during year 2, this service can be introduced
earlier than what is currently planned.
17
Appendices
18
Appendix 1A
19
Appendix 1B
20
Appendix 2A
21
Appendix 2B
22