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Tai lieu av Thuong Mai
10CKQ1 :: Khu vực học tập :: Tài liệu
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by kinh.can Wed Oct 05, 2011 9:50 pm
Writing a business plan
My Plan, Inc.
124 A Street
P.O. Box 12345
Biddeford, ME 04005
Phone: (207) 123-4567
Fax: (207) 890-1234
Email: myplan@yournet.org
BUSINESS PLAN
Copy ____15_____ of 15
My Plan, Inc.
124 A Street, Biddeford, ME 04005
Phone: (207) 282-8474 - Fax (207) 282-8475
myplan@yournet.org
Joe Doe – President
456 B Street
Portland, ME 04101
Tom Blank - Vice President
678 27th Avenue
Old Orchard Beach, ME 04064
June, 2006
PROPRIETARY NOTICE
The information contained in this document is proprietary to My Plan, Inc., Joe Doe, and Tom Blank. Unauthorized use, disclosure, or copying of this document or the information contained within is prohibited and will be prosecuted to the fullest extent of the law.
Table of Contents
Title Page ………………………………………………………………………… i
Table of Contents…………………………………………………………………. ii
Executive Summary ………………………………………………………………. 1
Mission Statement ………………………………………………………………… 2
The Company Background ……………………………………………………… 3
Wonderful Life®……………………………………………………………… 4
I – Production …………………………………………………….. 4
II – Village Shops …………………………………………………. 4
III – Wonderful Life at Home® …………………………………… 4
Other Clients and Marketing Strategy……………………………………………... 6
Location …………………………………………………………………………… 7
Management Team ……………………………………………………………….. 8
Joe Doe – President ……………………………………………………….. 8
Tom Blank – Vice President …………………………………………. 8
Sam Spade – Plant Manager …………………………………………… 8
Additional Business Advisors ……………………………………………. 9
Financial Considerations…….……………………………………………………. 10
Sales History and Projections…………………………………………….. 10
Considerations Affecting Profitability …………………………………… 11
Equipment List …………………………………………………………… 13
Pro Forma Financial Projections ………………………………………………… 14
Profit and Loss (Income) Statement……………………………………… 14
Balance Sheet ……………………………………………………………. 15
Cash Flow Projections …………………………………………………… 16
Anticipated Use of Funding ……………………………………………… 17
Exit Strategy ……………………………………………………………………… 18
Appendices
Customer letters of support ………………………………………………………. 1
Lease ……………………………………………………………………….…….. 2
Detailed Pro Forma Financial Statements………………………………………… 3
Corporate Tax Returns 2004 & 2005 ………………………………….…………. 4
Resume of Experience and Expertise for Corporate Management ……….……… 5
Legal Documents (Notes payable and Receivable)………………………….…… 6
Executive Summary
My Plan, Inc., is an “S” Corporation started in 2000, but purchased by our President in 2003 at which time it began specializing in the designing and manufacturing high art interiors and furniture from recycled and vintage materials. The company management consists of President Joe Doe, Vice President Tom Blank, and Plant Manager Sam Spade. Joe Doe holds 51% of the outstanding stock with Tom Blank holding the other major share of 21%. Three other minority owners hold the remaining outstanding shares.
This business plan seeks to primarily serve as a financial proposal to procure stabilization and expansion funding, and secondly as an operations guide and business development plan. The requested financing is to be a combination of a $150000 loan and a $100000 credit line to be drawn upon as required. It is anticipated that the short term cash requirement will be approximately $150000 to purchase fabrication tooling, fixturing, and equipment, and computers and software required to control the financial and production operations of the company in an efficient manner.
The funding will also be utilized to hire additional production personnel to reduce the amount of overtime currently required to produce and ship our products on time. The financing is to be collateralized by receivables, inventory, fixed assets, and the personal guarantees of the major stockholders. Repayment of the financing will be from profits and cash flow generated by the company’s operations. The request for funding beyond our immediate needs is to account for growth beyond projections will not be drawn upon unless required and justified to the lending institution(s) that has greatly exceeded all expectations and projections..
The company is currently benefiting from a combination of a talent driven staff, a unique niche market, and several profitable and stable clients that have been nurtured over the past two (2) years. Our growth currently requires us to seek financing to help with tool and facility upgrades and expansions, and to assist with short-term payroll and operating costs. Our current sales projections exceed even last year’s impressive growth. Our goal at My Plan is to meet these projections without disruption, and provide our clients with high quality and artistically driven, and responsibly made products and to continue to vitalize and enrich our local community.
Since the potential of increased rate of growth is very real, company planning also includes the considerations for controlling the rate of growth so as to remain within the limitations of our funding. My Plan Inc. designs and manufactures restaurant and retail store furniture, furnishings, and interiors from vintage wood and steel providing a unique motif for our clients who utilize our designs to create easily recognized environments to attract and retain their customers.
While we recognize that other organizations are capable of providing similar products, our clients have standardized on our product designs, and therefore, our continued growth is more functional within our own control (shipping quality products on time at reasonable prices) than a reliance on increasing market share or price competition.
Mission Statement
Since our beginning, My Plan, Inc. has adhered to the belief that profitability can be achieved responsibly. The goal of My Plan is to produce a reasonable profit for its owners and employees without adverse impact on its community, environment, and local economy.
My Plan is and has been committed to the creation of esthetically unique furniture, fixtures, and environments that honor and sustain the world in which we live. By using recycled steel, vintage wood, reclaimed salvage products, environmentally sensitive products like cork, bamboo, and concrete, and by buying locally, supporting American craftsmen, and giving back to our community, we help to honor that commitment everyday we do business.
The My Plan, Inc. Story
The Company began as a small design and build firm started by Joe Doe in 1992. Joe Doe Designs employed only 2-3 employees and occupied a 1000 square foot shop. As Joe Doe Designs, the company built, designed and finished more than a dozen premier Portland area locations including, the “Old Port Ocean Food”, “Halverson & Company”, “Franks”, “Pizza”, “Unitas” and “Brians”.
In 2003/2004, the Company incorporated as My Plan and began its relationship with its now largest client, “Wonderful Life®”. Over the course of the 2004-2005 years, My Plan conceived, designed and built Wonderful Life’s two-building, five story Corporate Headquarters on Salem Street in Boston, MA. The project catapulted My Plan to its present size of 19,000 square feet with over 17 employees. Letters of support and intent to continue utilizing My Plan’ products are contained in Appendix 1.
Wonderful Life®
My Plan, Inc. has several viable clients and maintains an excellent presence in the local and regional markets. However, a majority of our business originates with Wonderful Life® with whom we did $1.1m sales last year. My Plan was hired to “brand” Wonderful Life® products by designing fixtures and store interior concepts which led to our present, three-part relationship.
I - Production
The production phase of the Wonderful Life® contract consists of complete store fixturing for all retail and concept stores nationally and internationally. We have developed fifteen (15) unique store fixtures. Wonderful Life® has produced a catalogue containing these fixtures, requires all stores to retrofit their existing fixtures with the ones designed by My Plan, Inc., and all new stores to purchase these fixtures. To date we have already produced over $320,000 of product sales and we're receiving new Purchase Orders on a regular basis.
II - Village Shops
The second phase of the Wonderful Life® relationship is the Village Shops. These stores are essentially smaller versions of the Boston flagship store design. Each store interior contains multiple products built by My Plan, Inc. My Plan and builds the entire interior of the store including, all fixtures, furnishings, lighting, wall covering, flooring, and signage. The interior is then packaged and shipped to the location where a local general contractor is responsible for the installation. Although this program is just being established, My Plan, Inc., has shipped products for stores in Osaka, Japan and Atlanta, Georgia, and is currently building components for stores in Westport, Connecticut, Newburyport, Massachusetts, and Harvard Square in Cambridge, Massachusetts. Wonderful Life® projects the opening of two (2) stores per month and has 24 stores in or planned for construction this year. To date, each store has averaged approximately $60,000 income for My Plan.
III - Wonderful Life at Home®
The third and potentially most exciting phase is the Wonderful Life at Home® program. Jacob Jones, the Owner of Wonderful Life®, asked My Plan to design a line of fixturing that could also be used as home furnishings and be sold at retail. Bert reasoned that he already has established designs for fixtures and furnishings capable of residential use, so why not generate revenue from them.
The furniture line contains dining tables and benches, bookshelves and armoires, full- length mirrors and card tables, all meant to honor the early craftsman of America. The Wonderful Life at Home® furniture line is as exciting to My Plan Inc. as it is to our client because it markets to the public, therefore the potential sales are infinitely greater than items sold to a limited number of merchants. This program has literally just started and the sales are beginning to accelerate.
Other Clients and Marketing Strategy
While Wonderful Life® is responsible for a largest portion of our gross sales and is driving our current need for rapid expansion, My Plan does have several other lucrative accounts that continue to grow. Most notably is Pizza Company, for whom My Plan has built three restaurants to date, including Portland, Maine, Canton, Connecticut, and Bedford, Massachusetts. Pizza projects building three (3) to five (5) locations a year, starting with Maui, Hawaii in June of 2006 for which we have begun component construction. In addition, My Plan has been and continues to be approached by local and regional businesses for design and build work, based on a strong portfolio and high profile work history.
Our longer-range plan also includes the completion and distribution of our own line of branded furnishing and interiors. This line, conceptualized in 2005 by Joe Doe (the designer), is scheduled for completion by end of 2006 and is an ultimate goal of My Plan’s vision.
As previously stated, the unique market segment in which My Plan participates caters to customers and clients having an interest in “vintage” wood designs. That market, while surely price conscious is somewhat price insensitive. My Plan long-term market strategy is to provide good quality products, in a timely manner, at reasonable pricing customers will find acceptable. In the short term, we will concentrate on our existing customers, insuring they have no reason to search for additional suppliers while operating at an increased efficiency thereby increasing profits and reinvestment in the company.
Location
In keeping with our corporate philosophy, My Plan has worked closely with the City Manager and Economic Development Office to keep its location in Biddeford, Maine. My Plan is proud to be at the forefront of the revitalization project at the A Street Mill Yards, a project conceived and directed by owner/founder, Stuart Smith. Operating in a section of a restored, turn of the century mill helps build the local community, strengthens the economy, and preserves these landmark buildings, but also offers us several financial and commercial advantages. These buildings offer the industrial necessities of a modern facility at a fraction of the cost. Our five (5) year lease (a copy of which is at Appendix 2) is well below market value for comparable facilities. We have loading docks, freight elevators, fully sprinkled space and industrial electrical service. The 13,363 sq. ft. location also offers the advantage of close proximity to many of our suppliers, other craftsman. Our bronze forger, leatherworks, concrete, and tile craftsman, all with whom we regularly work, are located in the same building, making collaborative efforts quick and efficient. The building also offers another most important feature to our corporation, the ability to expand at a reasonable price. If My Plan needed, we could add another 5,000 to 10,000 square feet without moving the facility, an option that is particularly important to a company slated to grow at our projected rate.
My Plan’s location in Biddeford Maine is also beneficial in terms of a ready labor source. A historical working class textile mill town, among Biddeford’s population are trained workers of varying skill levels capable of performing the fabrication tasks required to produce our products. At the present time we employ individuals ranging in pay from $8.50 per hour to $18.00. The availability of workers is evidenced by the fact that during the third week in June, two semi-skilled workers were hired as a result of a single internet ad that ran for three days. In addition, the Apprenticeship Program of the State of Maine sponsored Career Center, the Quality Centers of York County Community College in Wells, Maine, and the local vocational high schools are resources available to assist staffing needs. While not all of our labor force needs to be exceptionally skilled, we are able to train individuals in specialized tasks such as spray painting, sanding, and assembly. Utilization of part time employees at this stage in our growth could negatively affect the quality of our products.
Biddeford is currently undergoing an economic revival of small business incubation that is rejuvenating the closed mill buildings. The support and encouragement of town toward these small businesses (like My Plan) and the increased economic growth that these businesses provide are mutually beneficial.
Management Team
Joe Doe – President
Joe Doe has been designing and building furniture and interiors for 15 years. His design expertise originated with the design and fabrication of yacht interiors in Ponce Inlet, Florida and Portland, Maine. He started his own furniture and interior design business nine years ago utilizing reclaimed lumber and recycled steel. Since that time he built interiors and furnishings for some of Portland’s finer eateries, Halverson & Company, Circus Terrace, Unitas Wine and Bar Lounge, Old Port Ocean Food, Brians, Pizza Company, and others. L.L. Bean and Timberland were two of Joe’s several commercial (non-restaurant) clients. Joe is expected to transition out of the day-to-day operating functions of company to return to sales and the design and prototype fabrication of new products, functions to which he is exceptionally suited.
Tom Blank – Vice President
A native of Maine, Tom attended Concordia University in Montreal, PQ majoring in finance, and the Architectural School of Deakin University in Melbourne, Australia. Prior to joining My Plan, Tom worked for a large engineering/architectural firm in NY creating a database for their technical library and resource material. He was also the assistant to the Vice President of the United Way of San Francisco. His experience includes work in the construction industry and he assisted Joe Doe with the design and construction of the Old Port Ocean Food restaurant in Portland. Tom presently oversees the metal working operations of the company and is expected to broaden his responsibilities to include oversight of the techniques and methods required to produce My Plan’s unique products.
Sam Spade – Plant Manager
Sam Spade has been involved in manufacturing and manufacturing support operations for over 40 years. Beginning his career with General Electric in Schenectady, NY, and then moving with GE to South Portland, Sam was a manufacturing engineer supporting heavy fabrication operations. He became Technical Director and Sales and Marketing Director for ITT Vulcan Electric (later Vulcan Electric) in Kezar Falls and for ten years owned and operated his own business providing industrial and fire safety products, training, and consulting throughout Northern New England. After selling his business to a national chain, Sam became Manager of the Program Management Division and later Chief Engineer for Fiber Materials, Inc. in Biddeford. Sam is also a member of the adjunct business faculty at Andover College and York County Community College. He holds the undergraduate degree of Mechanical Engineer from Stevens Institute of Technology, a Master of Science degree in Industrial Administration from Union College, and is licensed as a Professional Engineer in the States of Maine, New Hampshire, and New York. Sam joined My Plan in June of 2006. Sam is expected to oversee the day-to-day management of the company including purchasing, production, safety, and financial operations.
Remuneration of the management team will be primarily through distribution of profits. Messrs Doe and Blank presently earn salaries of $55,500 and $38,100 respectively, but will derive the most substantial portion of their future income from stock distributions. Mr. Cohen has been hired at an annual salary of $50,000, and expects to receive an additional bonus based on his ability to produce future company profits.
Additional Business Advisors
In addition to the management team, My Plan Design is proud to rely on the expertise and advice of others in several areas. These individuals include, but are not limited to:
Pick Your Name, Maine State Accounting Services, Wells, Maine
Ted E Lost, Esq., Legal Beavers LLC, Portland, Maine
Sondra Seaks, Small Business Development Counselor, University of Southern Maine, Portland, Maine
Financial Considerations
Sales History and Projections
My Plan, Inc’s. history is one of increasing sales. In 2003, its first year of operation as a furniture designer and manufacturer, it had loss of $1,429 on sales of $7,592. In 2004, its first “real” year of operations My Plan, Inc. had a profit of $56,917 on total sales of $434,053. The third year of operations produced a profit of $14,427 on sales of $1,007,511. The reduction of profit on increasing sales is the result of a bad debt of approximately $110,000, an unrecoverable malfeasance by a past officer of the company. In 2005, the company and the individual involved reached an agreement that she would repay $40,000 of the total amount. However, upon reevaluation of that agreement, the company has concluded that the individual simply has no capacity to repay that amount and is unlikely to gain that capacity in the foreseeable future. Therefore, My Plan, Inc. anticipates an additional bad debt write-off of $40,000 in 2006. Other than the write-off, the matter has been completely resolved and no administrative or legal actions remain. The company no longer has any relationship with that individual.
Sales for 2006 and succeeding years have been projected from actual in-house contracts and from our existing clients as follows. Please note that the projections from Wonderful Life® and Village Shops® were reviewed with their appropriate representatives as of June 10, 2006.
Read the following table about the projections of the sales Wonderful Life® and Village Shops® . Write a academic report to your boss.
2006 Sales through May $366,332
2006 Contracts Received but not yet Invoiced (Backlog) $296,000
Anticipated Remainder 2006
Wonderful Life Components® $386,750
Village Shops® $630,000
Pizza $ 80,000
Dana’s Restaurant $150,000
$1,909,082
Projecting income from existing customers at what we believe is a conservative increase of 5% yields sales of $2,004,500 in 2007, and $2,104,800 in 2008. To those figures we estimate sales of our own line of branded furniture at $300,000 for 2007 and $700,000 in 2008 yielding total income of:
2006 2007 2008
Anticipated Sales (1000’s) $1,910 $2,300 $2,800
Considerations Affecting Profitability
Four items having direct impact on profitability are affecting current operations of My Plan, Inc. The first, the lack of an adequate reserve of cash, is reducing the profitability by necessitating factoring of receivables. Factoring of receivables cost the company $15,500 in 2005 and $14,400 through the second week of June, 2006. My Plan, Inc. estimates that the interest paid for access to a revolving line of credit or commercial loan would cost less than 2/3 that of the present receivables factoring agreement.
The second item affecting profitability during 2005 and 2006 was the need for shop personnel to work an inordinate amount of overtime to manufacture the products. Two changes are anticipated to reduce overtime by at least 50% and consequently the labor cost for production. The new plant manager, Sam Spade has been charged with hiring additional skilled workers to minimize the effective labor rate. In addition, with Sam’s manufacturing background and a relatively low number of product designs, anticipated financing will permit automation and/or increased tooling and fixturing to be utilized to improve productivity and efficiency and minimize the quantity of hours required to produce each product. The pro Forma financial projections are based on a ratio of labor to sales of 45% in 2006 lowering to 42% in 2007 and 40% in 2008. The actual rate in 2005 was 44%. Year-to-date labor for 2006 was over 50% because of the amount of overtime required for timely shipments.
A third item, institution of a modern (but simple) production control system will increase our ability to level load shop labor resulting in the operation with an efficient number of workers and minimum amount of overtime. Implementation of that system will also enable better control of purchasing quantities, pricing, and lead times. Although no credit has been taken for these improvements in our pro forma financial projections, clearly placing orders with a vendor on the basis that they have a required item in stock is not a cost efficient method of doing business!
A fifth item, while not presently affecting the financial operations, but one which must be rectified for the long term success of My Plan is the present reliance on one customer for the vast majority of our sales. Access to an adequate source of funding will permit My Plan Design to meet the needs of Wonderful Life® thereby retaining an adequate level of sales while courting and growing a diversified customer base. As the company’s profitability grows, establishment of employee benefits will also yield a more stable, qualified workforce leading to even more efficient production.
Without attempting to quantify additional operational improvements, utilizing existing historical costs but taking into consideration only labor efficiency improvements and reduced interest costs, My Plan estimates profitability in 2006, 2007, and 2008 as indicated in the following table:
2005 2006 2007 2008
Income (sales) $1,007,511 $1,910,000 $2,300,000 $2,800,000
Actual or Anticipated Gross Profit $658,439 $1,241,500 $1,495,000 $1,820,000
Adjustment for Extraordinary Bad Debt -$68,661 -$40,000
Adjustment for consultant -$10,000
Anticipated or Restated Gross Profit $579,778 $1,201,500 $1,495,000 $1,820,000
Total Operating & Financing Costs $564,725 -$1,085,522 -$1,156,944 -$1,341,366
Restated or Projected Profitability $15,053 $115,978 $338,056 $478,634
My Plan, Inc. stresses that the above projection of profitability takes no advantage of anticipated efficiencies in purchasing power, prompt payment of invoices, economies of scale, or other cost reductions normally anticipated with sales growth and increased profitability resulting from an adequate source of operating funds. In view of the uncertain economic conditions existing in the U.S., we have chosen to limit our sales and cost reduction projections to those that have been specifically identified or verified by our client forecasts. Details and the anticipated impact of income and expenses from operations on the company are shown in the following section, Pro Forma Financial Projections.
Equipment List
The following is a list of current assets in tools and equipment owned by the company.
ITEM QJOE ITEM QJOE
Chop Saw 4 Small Portable Welders 3
Clamps 50 Large Welders 2
Jointer 1 Bench Grinder 2
Table saw 2 2 Small Drill Presses 2
Table Saw 1 2 Large Drill Presses 2
Small Air Compressors 5 Job Box 1
1 Large Air Compressor 1 Plasma Cutter 1
Band Saw 1 Cement Mixer 1
Dust Collector 3 Cement Vibrator 1
Routers 2 Wet Grinder 1
Planer 1 Steel Chop Saw 2
Timesaver 1 Evolution Saw 1
Material Racking System 1 Jet Saw 1
Spraying System 1 Fax/copy/scan 1
Portable Table Saws 2 Computer 1
Bench Sander 1 Spray Booth 1
Woodstove 1 2000 Chev. Truck 1
The book value of the tools and equipment at the end of 2006 will be $14,049. Their original cost was $65,750. My Plan, Inc. estimates the market value of these assets to be between $30,000 and $35,000.
Pro Forma Financial Projections
The following Income Statement, Balance Sheet, and Cash Flow Statement are projections of the company’s status at the end of 2006, 2007, and 2008, and include actual figures for 2005, the first full year of representative operations by the company.
The detailed P&L, Balance Sheet, and Cash Flow Projections are contained in Appendix 3. Company tax returns for 2004 and 2005 are contained in Appendix 4 for comparison purposes. The following information is a summary of the Pro Forma projections.
Income Statement (Profit and Loss Projections)
Actual Projected
($1,000s) 2005 2006 2007 2008
Sales 1,008 1,910 2,300 2,800
Cost of Goods Sold 349 689 805 980
Gross Profit 658 1,241 1,495 1,820
Labor 440 910 966 1,120
Other Oper. Expenses 186 185 176 206
Total Oper. Expenses 626 1,095 1,142 1,326
Other Expenses
Financing 18 30 15 15
Net Income 15 116 338 479
==== ===== ===== ====
Balance Sheet
Actual Projected
($1,000s) 2005 2006 2007 2008
Cash -8 68 201 428
Accounts Receivable 10 77 87 97
Other Current Assets 73 52 55 59
Fixed Assets 16 26 60 92
Other 1 4 4 4
Total Assets 93 226 407 679
Current Liabilities
Accts Payable 36 11 16 21
Other 46 26 31 36
Long Term Liabilities 6 154 137 120
Total Liab. 89 191 184 177
Equity
Add’l Paid in Capital 1 1 1 1
Retained Earnings 0 3 59 247
Shareholder Dist -12 -85 -150 -200
Net Income 15 116 338 479
Total Equity 4 60 248 502
Liabilities + Equity 93 226 407 679
==== ==== ==== ====
The anticipated growth in equinox and net income is demonstrated in the following chart:
Cash Flow Projections
Anticipated Use of Financing
My Plan Design anticipates the requirement for $150,000 of financing for near term operations (through 2008). Our request is for approval of an additional $100,000 of financing contingent upon satisfactory demonstration of the need and successful company operations to fund additional growth. The initial use of the funding will be:
Estimated Cost
Hardware and software for integrated financial accounting
and manufacturing control $15,000
Funding payables over 30 days (until we develop sufficient
rapport with our vendors to extend terms to 45 days) $15,000
Eliminate factoring of receivables $75,000
Temporary funding of up to four (4) new production employees
and establishment of company benefits $15,000
Shop safety and production equipment upgrade $10,000
Subtotal $130,000
Contingency $20,000
======
Total $150,000
Exit Strategy
It is difficult for one to imagine an unsuccessful outcome for My Plan, Inc. given its growth in the last two years. But the company’s principals do understand and acknowledge that events beyond their control such as customer bankruptcy or selection of a competitor in lieu of My Plan, a catastrophic natural occurrence or accident, or even a poor business decision could put a fledgling company at risk.
Prior to establishing My Plan, Inc., the two majority owners worked together to design and fabricate products similar to those being produced by the company. Both individuals have taken substantial reductions in total remuneration during the startup phase of the company. While their anticipated total income is far greater within the corporate structure as My Plan grows according to plan, if the “unthinkable” does happen, both Joe Doe and Tom Blank would revert to a small partnership (de facto, if not legal partnership entity) and be able to repay the guaranteed loans.
Another advantage of adequate financing that would benefit the financing organization, the company’s principals, the employees, and even our customers in the event of an unanticipated natural occurrence or accident is that business interruption insurance and similar mitigating instruments would become affordable to the company.
SAMPLE REPORTS
Business Software plc
Product report
Executive summary
We have been contacted by Lenz AG, a German manufacturer of mobile telephones, and asked about the possibility of a co-operation agreement. We would adapt our business software for use in their products. Tests show that their product is a very good one and popular with our target market.
Introduction
This report will look at:
• the hardware manufacturer and their equipment software that could be used on their mobile phones the advantages of working together .
recommendations for action
Findings
1 Lenz has been developing cheap, small-scale electronic devices for 35 years. In the last five years, they have focused on more expensive mobile phones for businesspeople. These have been very successful, One
in four mobile phones for the business market is a Lenz.
2 Our new 'Executive Organiser' software has a lot of attractive features for the travelling businessperson (e.g. address book, e-mailware, voice recorder, street-finder function, etc.).
3 Market research shows that there is a big interest in our products being used on machines apart from computers.
Conclusion
The two companies have products which fit well together.
Recommendation
We should have a meeting with representatives from Lenz as soon as possible to discuss a joint venture between our companies, with the aim of putting our software onto their mobile phones.
TR ESSEL INVESTMENT PLAN
1. Rationale :
In recent years, Tressel has become one of Europe's leading brands of sportswear. It is now on its way to becoming a global brand.
However, in the last two years, sales have declined, causing a sharp decrease in the profits. This has been caused mainly by three factors; fierce competition in the industry bringing prices down; a fall in demand; production problems.
2. Objectives
To remedy the problems outlined above and make Tressel a more competitive business internationally, an investment of €2.5 million was proposed.
3. Options and benefits
The Board of Directors has agreed the following investment plan.
• Firstly, we need to invest in market research. This should give us a better understanding of our target customers' changing needs and desires, which can then guide product development.
• Product research and development is the second area that we need to develop, as we have relied heavily on the success of our traditional products. While these will probably continue to account for more than 50% of our turnover in the next two or three years, we will not stay ahead of the competition if we do not vary our range.
• Finally, setting up online sales should widen our customer base, increase sales, and make us more competitive.
4. Cost
Investment in market research €900,000
Investment in research and development €1,300,000
Setting up online sales " €300,080
5. Timeline
Market research: to be completed in three months' time, i.e. by the end of June.
R&D: ongoing process to be speeded up from July.
Online sales: website up and running by September.
6. Evaluation
The heads of the departments concerned will hand in a monthly progress report. The Board will then meet to assess the progress made in all three areas.
ANSWER
For this university course an essay is completed in six stages. The first stage is a private tutorial in which the task and topic are fully discussed with the tutor. A reading list should be obtained, detailing useful resource material.
The second stage involves conducting suitable research. Notes are taken from available literature at the library, and data collected from questionnaires, interviews and surveys. Writing the first draft is the third stage. First, it is necessary to organize the content of the essay, and produce a brief outline. Next, the draft is written in the acceptable formal academic style, and checked for appropriate language.
Stage number four is another tutorial or study group discussion, during which problem areas are analyzed, and further ideas and suggestions are noted. The fifth stage includes reading the resource material again, before writing a second draft using suggestions from stage four. Once completed, all quotations should be checked for errors.
The sixth stage consists of writing the final draft of the essay. A spell check is required, before adding a title page and compiling a bibliography. The essay should then be submitted before the deadline for completion. (192 words)
Do you agree or disagree with the following statement? Business should do anything they can to make a profit. Use specific reasons and examples to support your position.
ANSWER
After I get my degree, I plan to start a business. My goal is to make money, a lot of money. However, I can’t forget that there are more important things in life than earning a profit. I must consider the people I work with, the customers I serve, and the community I live in.
My colleagues are a very important part of my business. Without them, I would not have a business. I depend on them to help me carry on the day-to-day operations. I depend on them for their advice on what to sell and how to sell it. I must compensate them for their work. I can’t take large profits without sharing with the people who make it possible.
Similarly I would not have a business without my customers. I can never forget that they could take their business elsewhere. I must give them good value for their money. I can’t overcharge them. I must also remember that money is as important to them as it is to me. I want my customers to trust me and keep coming back.
My employees and I all live in the same community as our customers. We can’t ignore it. We must play an active part in it. I feel it is important that some of the profits my business earns from the community be returned to the community. We need to support community programs like summer jobs for high school students, campaigns to clean up the parks, and efforts to make the shopping area more attractive.
A business must make profits but we all- workers, customers, community- must profit from a successful business.
Reports
Work in small groups. Choose one of the products shown. Then turn to its Information file on page 142. Prepare a short presentation about your product. Invent any additional information that you wish.
Then form new groups and present your products to each other. Answer any questions that you are asked about them.
Outdoor heater juice extractor Leather attache case
Useful language
Introducing the product
Mentioning selling points
It has several special features.
A very useful feature is the energy-saving design.
Another advantage is its very small size.
Inviting questions
Does anyone have any questions? Would anyone like to ask a question?
This is our new product. I'm going to tell you about our new product.
Describing the product
Let me tell you about its special features. It's made of leather/wood/steel/aluminium. It weighs just 2.3 kilos. It comes in a wide range of colours.
Stating the product's uses
It's ideal for travelling. It's designed to be used with any type of material.
CASE STUDY : Minerva A.G.
Background
Minerva A.G., based in Munich, Germany, is a chain store which sells a range of stylish, innovative products. Many of its products feature new technology, but the stores sell everything from furniture and fashionable clothes to kitchenware and household goods. It is well-known for its original designs and high quality. On the window of every store are the words Creativity, Imagination, Style, Novelty, Originality.
Customer satisfaction survey
Minerva A.G. sent questionnaires to all its customers. Here is an extract from the Marketing Department's report.
3 Our customers say:
3.1 Minerva A.G. has very few great new products for customers with busy lifestyles.
3.2 The range of products is not as wide as it used to be.
3.3 There are too many hi-tech products. Customers want fewer products but more original ones.
3.4 Most products are over €100. Customers who are looking for gifts think they are too expensive.
3.5 There are not enough special offers to encourage customers to spend more.
Need for new products
Chairperson Ulrika Nielsen and her directors have invited several foreign firms to present their new products to the Minerva A.G. board. All the companies are well-known for their innovation. The directors will choose the best and most exciting products for Minerva A.G.'s stores.
COMPANY A
COMPANY B
Weight Monitor
Special features:
• Measures how much body fat you have
• An LCD display shows changes in your weight
• Easy-to-read graphs and charts
• Holds health and weight records for up to 5 years
Prices €45
Personal Satellite Navigation System
Special features:
• Pocket-sized
• Download any world city map from your computer
• No need to carry a street map ever again
• Includes tourist information
• Slim, lightweight
• Colours: silver or black
• Price: €320
COMPANY C
COMPANY D
Floating Globe
Special features:
• Appears to float in the air because it
is controlled by magnets
• Rotates
• Lights up
• Many physical features highlighted, for example mountain ranges
• Ideal for the home or office
• Price: €220
Virtual Passenger
Special features:
Chats, tells jokes, plays music, asks questions
Keeps you awake
Stops boredom
20,000 word memory - knows your Interests
Automatically opens windows
Alarm function if driver falls asleep
Ideal for sales reps
Price: €500
1 Work in small groups. Choose one of the companies above and prepare a presentation on its product. (Or if you prefer, think of another product which the company is about to launch.) Invent any information you wish.
2 Form new groups and present your products. Try to persuade the Minerva A.G. directors to buy large quantities. When you are not presenting, play the role of a Minerva A.G. director and ask questions about the products.
3 After all the presentations, discuss which product is the most exciting and innovative.
Writing
As a Minerva A.G. director, write a short report on one of the products which you saw presented. Recommend whether Minerva A.G. should place a large order for the product or not.
Business Software plc
Product report
Executive summary
We have been contacted by Lenz AG, a German manufacturer of mobile telephones, and asked about the possibility of a co-operation agreement. We would adapt our business software for use in their products. Tests show that their product is a very good one and popular with our target market.
Introduction
This report will look at:
• the hardware manufacturer and their equipment software that could be used on their mobile phones the advantages of working together .
recommendations for action
Findings
1 Lenz has been developing cheap, small-scale electronic devices for 35 years. In the last five years, they have focused on more expensive mobile phones for businesspeople. These have been very successful, One
in four mobile phones for the business market is a Lenz.
2 Our new 'Executive Organiser' software has a lot of attractive features for the travelling businessperson (e.g. address book, e-mailware, voice recorder, street-finder function, etc.).
3 Market research shows that there is a big interest in our products being used on machines apart from computers.
Conclusion
The two companies have products which fit well together.
Recommendation
We should have a meeting with representatives from Lenz as soon as possible to discuss a joint venture between our companies, with the aim of putting our software onto their mobile phones.
Tracy Cruicksbank
Research and Development Director
19 October 2009 A report should be well 'organised with information in a logical order. There is
no set layout for a report.
It will depend on:
a) the type of report
b) the company style.
The format used here is suitable for formal reports:
The executive summary is a summary of the main points and conclusion of the report. It gives the reader a quick overview of the total situation.
The introduction shows the points that will be looked at.
The findings are the facts discovered.
The conclusion is what you think about the facts and how you interpret them.
Recommendations are practical suggestions to deal with the situation and ideas for making sure future activities run more easily.
TR ESSEL INVESTMENT PLAN
1. Rationale :
In recent years, Tressel has become one of Europe's leading brands of sportswear. It is now on its way to becoming a global brand.
However, in the last two years, sales have declined, causing a sharp decrease in the profits. This has been caused mainly by three factors; fierce competition in the industry bringing prices down; a fall in demand; production problems.
2. Objectives
To remedy the problems outlined above and make Tressel a more competitive business internationally, an investment of €2.5 million was proposed.
3. Options and benefits
The Board of Directors has agreed the following investment plan.
• Firstly, we need to invest in market research. This should give us a better understanding of our target customers' changing needs and desires, which can then guide product development.
• Product research and development is the second area that we need to develop, as we have relied heavily on the success of our traditional products. While these will probably continue to account for more than 50% of our turnover in the next two or three years, we will not stay ahead of the competition if we do not vary our range.
• Finally, setting up online sales should widen our customer base, increase sales, and make us more competitive.
4. Cost
Investment in market research €900,000
Investment in research and development €1,300,000
Setting up online sales " €300,080
5. Timeline
Market research: to be completed in three months' time, i.e. by the end of June.
R&D: ongoing process to be speeded up from July.
Online sales: website up and running by September.
6. Evaluation
The heads of the departments concerned will hand in a monthly progress report. The Board will then meet to assess the progress made in all three areas. There is no set layout for an investment plan, but the information should be well organised.
The various sections should have a clear heading and be in a logical order.
The rationale gives background information relevant to the reasons for the plan.
The objectives are the goals which your investment will enable you to achieve.
This section gives details of the areas you have chosen to invest in and of the benefits they are likely to provide.
Breakdown of the total amount of money invested.
The timeline shows the period of time during which you expect the various stages of the plan to be reached.
This section gives information about the mechanism you have put in place to assess the progress made in all three areas.
My Plan, Inc.
124 A Street
P.O. Box 12345
Biddeford, ME 04005
Phone: (207) 123-4567
Fax: (207) 890-1234
Email: myplan@yournet.org
BUSINESS PLAN
Copy ____15_____ of 15
My Plan, Inc.
124 A Street, Biddeford, ME 04005
Phone: (207) 282-8474 - Fax (207) 282-8475
myplan@yournet.org
Joe Doe – President
456 B Street
Portland, ME 04101
Tom Blank - Vice President
678 27th Avenue
Old Orchard Beach, ME 04064
June, 2006
PROPRIETARY NOTICE
The information contained in this document is proprietary to My Plan, Inc., Joe Doe, and Tom Blank. Unauthorized use, disclosure, or copying of this document or the information contained within is prohibited and will be prosecuted to the fullest extent of the law.
Table of Contents
Title Page ………………………………………………………………………… i
Table of Contents…………………………………………………………………. ii
Executive Summary ………………………………………………………………. 1
Mission Statement ………………………………………………………………… 2
The Company Background ……………………………………………………… 3
Wonderful Life®……………………………………………………………… 4
I – Production …………………………………………………….. 4
II – Village Shops …………………………………………………. 4
III – Wonderful Life at Home® …………………………………… 4
Other Clients and Marketing Strategy……………………………………………... 6
Location …………………………………………………………………………… 7
Management Team ……………………………………………………………….. 8
Joe Doe – President ……………………………………………………….. 8
Tom Blank – Vice President …………………………………………. 8
Sam Spade – Plant Manager …………………………………………… 8
Additional Business Advisors ……………………………………………. 9
Financial Considerations…….……………………………………………………. 10
Sales History and Projections…………………………………………….. 10
Considerations Affecting Profitability …………………………………… 11
Equipment List …………………………………………………………… 13
Pro Forma Financial Projections ………………………………………………… 14
Profit and Loss (Income) Statement……………………………………… 14
Balance Sheet ……………………………………………………………. 15
Cash Flow Projections …………………………………………………… 16
Anticipated Use of Funding ……………………………………………… 17
Exit Strategy ……………………………………………………………………… 18
Appendices
Customer letters of support ………………………………………………………. 1
Lease ……………………………………………………………………….…….. 2
Detailed Pro Forma Financial Statements………………………………………… 3
Corporate Tax Returns 2004 & 2005 ………………………………….…………. 4
Resume of Experience and Expertise for Corporate Management ……….……… 5
Legal Documents (Notes payable and Receivable)………………………….…… 6
Executive Summary
My Plan, Inc., is an “S” Corporation started in 2000, but purchased by our President in 2003 at which time it began specializing in the designing and manufacturing high art interiors and furniture from recycled and vintage materials. The company management consists of President Joe Doe, Vice President Tom Blank, and Plant Manager Sam Spade. Joe Doe holds 51% of the outstanding stock with Tom Blank holding the other major share of 21%. Three other minority owners hold the remaining outstanding shares.
This business plan seeks to primarily serve as a financial proposal to procure stabilization and expansion funding, and secondly as an operations guide and business development plan. The requested financing is to be a combination of a $150000 loan and a $100000 credit line to be drawn upon as required. It is anticipated that the short term cash requirement will be approximately $150000 to purchase fabrication tooling, fixturing, and equipment, and computers and software required to control the financial and production operations of the company in an efficient manner.
The funding will also be utilized to hire additional production personnel to reduce the amount of overtime currently required to produce and ship our products on time. The financing is to be collateralized by receivables, inventory, fixed assets, and the personal guarantees of the major stockholders. Repayment of the financing will be from profits and cash flow generated by the company’s operations. The request for funding beyond our immediate needs is to account for growth beyond projections will not be drawn upon unless required and justified to the lending institution(s) that has greatly exceeded all expectations and projections..
The company is currently benefiting from a combination of a talent driven staff, a unique niche market, and several profitable and stable clients that have been nurtured over the past two (2) years. Our growth currently requires us to seek financing to help with tool and facility upgrades and expansions, and to assist with short-term payroll and operating costs. Our current sales projections exceed even last year’s impressive growth. Our goal at My Plan is to meet these projections without disruption, and provide our clients with high quality and artistically driven, and responsibly made products and to continue to vitalize and enrich our local community.
Since the potential of increased rate of growth is very real, company planning also includes the considerations for controlling the rate of growth so as to remain within the limitations of our funding. My Plan Inc. designs and manufactures restaurant and retail store furniture, furnishings, and interiors from vintage wood and steel providing a unique motif for our clients who utilize our designs to create easily recognized environments to attract and retain their customers.
While we recognize that other organizations are capable of providing similar products, our clients have standardized on our product designs, and therefore, our continued growth is more functional within our own control (shipping quality products on time at reasonable prices) than a reliance on increasing market share or price competition.
Mission Statement
Since our beginning, My Plan, Inc. has adhered to the belief that profitability can be achieved responsibly. The goal of My Plan is to produce a reasonable profit for its owners and employees without adverse impact on its community, environment, and local economy.
My Plan is and has been committed to the creation of esthetically unique furniture, fixtures, and environments that honor and sustain the world in which we live. By using recycled steel, vintage wood, reclaimed salvage products, environmentally sensitive products like cork, bamboo, and concrete, and by buying locally, supporting American craftsmen, and giving back to our community, we help to honor that commitment everyday we do business.
The My Plan, Inc. Story
The Company began as a small design and build firm started by Joe Doe in 1992. Joe Doe Designs employed only 2-3 employees and occupied a 1000 square foot shop. As Joe Doe Designs, the company built, designed and finished more than a dozen premier Portland area locations including, the “Old Port Ocean Food”, “Halverson & Company”, “Franks”, “Pizza”, “Unitas” and “Brians”.
In 2003/2004, the Company incorporated as My Plan and began its relationship with its now largest client, “Wonderful Life®”. Over the course of the 2004-2005 years, My Plan conceived, designed and built Wonderful Life’s two-building, five story Corporate Headquarters on Salem Street in Boston, MA. The project catapulted My Plan to its present size of 19,000 square feet with over 17 employees. Letters of support and intent to continue utilizing My Plan’ products are contained in Appendix 1.
Wonderful Life®
My Plan, Inc. has several viable clients and maintains an excellent presence in the local and regional markets. However, a majority of our business originates with Wonderful Life® with whom we did $1.1m sales last year. My Plan was hired to “brand” Wonderful Life® products by designing fixtures and store interior concepts which led to our present, three-part relationship.
I - Production
The production phase of the Wonderful Life® contract consists of complete store fixturing for all retail and concept stores nationally and internationally. We have developed fifteen (15) unique store fixtures. Wonderful Life® has produced a catalogue containing these fixtures, requires all stores to retrofit their existing fixtures with the ones designed by My Plan, Inc., and all new stores to purchase these fixtures. To date we have already produced over $320,000 of product sales and we're receiving new Purchase Orders on a regular basis.
II - Village Shops
The second phase of the Wonderful Life® relationship is the Village Shops. These stores are essentially smaller versions of the Boston flagship store design. Each store interior contains multiple products built by My Plan, Inc. My Plan and builds the entire interior of the store including, all fixtures, furnishings, lighting, wall covering, flooring, and signage. The interior is then packaged and shipped to the location where a local general contractor is responsible for the installation. Although this program is just being established, My Plan, Inc., has shipped products for stores in Osaka, Japan and Atlanta, Georgia, and is currently building components for stores in Westport, Connecticut, Newburyport, Massachusetts, and Harvard Square in Cambridge, Massachusetts. Wonderful Life® projects the opening of two (2) stores per month and has 24 stores in or planned for construction this year. To date, each store has averaged approximately $60,000 income for My Plan.
III - Wonderful Life at Home®
The third and potentially most exciting phase is the Wonderful Life at Home® program. Jacob Jones, the Owner of Wonderful Life®, asked My Plan to design a line of fixturing that could also be used as home furnishings and be sold at retail. Bert reasoned that he already has established designs for fixtures and furnishings capable of residential use, so why not generate revenue from them.
The furniture line contains dining tables and benches, bookshelves and armoires, full- length mirrors and card tables, all meant to honor the early craftsman of America. The Wonderful Life at Home® furniture line is as exciting to My Plan Inc. as it is to our client because it markets to the public, therefore the potential sales are infinitely greater than items sold to a limited number of merchants. This program has literally just started and the sales are beginning to accelerate.
Other Clients and Marketing Strategy
While Wonderful Life® is responsible for a largest portion of our gross sales and is driving our current need for rapid expansion, My Plan does have several other lucrative accounts that continue to grow. Most notably is Pizza Company, for whom My Plan has built three restaurants to date, including Portland, Maine, Canton, Connecticut, and Bedford, Massachusetts. Pizza projects building three (3) to five (5) locations a year, starting with Maui, Hawaii in June of 2006 for which we have begun component construction. In addition, My Plan has been and continues to be approached by local and regional businesses for design and build work, based on a strong portfolio and high profile work history.
Our longer-range plan also includes the completion and distribution of our own line of branded furnishing and interiors. This line, conceptualized in 2005 by Joe Doe (the designer), is scheduled for completion by end of 2006 and is an ultimate goal of My Plan’s vision.
As previously stated, the unique market segment in which My Plan participates caters to customers and clients having an interest in “vintage” wood designs. That market, while surely price conscious is somewhat price insensitive. My Plan long-term market strategy is to provide good quality products, in a timely manner, at reasonable pricing customers will find acceptable. In the short term, we will concentrate on our existing customers, insuring they have no reason to search for additional suppliers while operating at an increased efficiency thereby increasing profits and reinvestment in the company.
Location
In keeping with our corporate philosophy, My Plan has worked closely with the City Manager and Economic Development Office to keep its location in Biddeford, Maine. My Plan is proud to be at the forefront of the revitalization project at the A Street Mill Yards, a project conceived and directed by owner/founder, Stuart Smith. Operating in a section of a restored, turn of the century mill helps build the local community, strengthens the economy, and preserves these landmark buildings, but also offers us several financial and commercial advantages. These buildings offer the industrial necessities of a modern facility at a fraction of the cost. Our five (5) year lease (a copy of which is at Appendix 2) is well below market value for comparable facilities. We have loading docks, freight elevators, fully sprinkled space and industrial electrical service. The 13,363 sq. ft. location also offers the advantage of close proximity to many of our suppliers, other craftsman. Our bronze forger, leatherworks, concrete, and tile craftsman, all with whom we regularly work, are located in the same building, making collaborative efforts quick and efficient. The building also offers another most important feature to our corporation, the ability to expand at a reasonable price. If My Plan needed, we could add another 5,000 to 10,000 square feet without moving the facility, an option that is particularly important to a company slated to grow at our projected rate.
My Plan’s location in Biddeford Maine is also beneficial in terms of a ready labor source. A historical working class textile mill town, among Biddeford’s population are trained workers of varying skill levels capable of performing the fabrication tasks required to produce our products. At the present time we employ individuals ranging in pay from $8.50 per hour to $18.00. The availability of workers is evidenced by the fact that during the third week in June, two semi-skilled workers were hired as a result of a single internet ad that ran for three days. In addition, the Apprenticeship Program of the State of Maine sponsored Career Center, the Quality Centers of York County Community College in Wells, Maine, and the local vocational high schools are resources available to assist staffing needs. While not all of our labor force needs to be exceptionally skilled, we are able to train individuals in specialized tasks such as spray painting, sanding, and assembly. Utilization of part time employees at this stage in our growth could negatively affect the quality of our products.
Biddeford is currently undergoing an economic revival of small business incubation that is rejuvenating the closed mill buildings. The support and encouragement of town toward these small businesses (like My Plan) and the increased economic growth that these businesses provide are mutually beneficial.
Management Team
Joe Doe – President
Joe Doe has been designing and building furniture and interiors for 15 years. His design expertise originated with the design and fabrication of yacht interiors in Ponce Inlet, Florida and Portland, Maine. He started his own furniture and interior design business nine years ago utilizing reclaimed lumber and recycled steel. Since that time he built interiors and furnishings for some of Portland’s finer eateries, Halverson & Company, Circus Terrace, Unitas Wine and Bar Lounge, Old Port Ocean Food, Brians, Pizza Company, and others. L.L. Bean and Timberland were two of Joe’s several commercial (non-restaurant) clients. Joe is expected to transition out of the day-to-day operating functions of company to return to sales and the design and prototype fabrication of new products, functions to which he is exceptionally suited.
Tom Blank – Vice President
A native of Maine, Tom attended Concordia University in Montreal, PQ majoring in finance, and the Architectural School of Deakin University in Melbourne, Australia. Prior to joining My Plan, Tom worked for a large engineering/architectural firm in NY creating a database for their technical library and resource material. He was also the assistant to the Vice President of the United Way of San Francisco. His experience includes work in the construction industry and he assisted Joe Doe with the design and construction of the Old Port Ocean Food restaurant in Portland. Tom presently oversees the metal working operations of the company and is expected to broaden his responsibilities to include oversight of the techniques and methods required to produce My Plan’s unique products.
Sam Spade – Plant Manager
Sam Spade has been involved in manufacturing and manufacturing support operations for over 40 years. Beginning his career with General Electric in Schenectady, NY, and then moving with GE to South Portland, Sam was a manufacturing engineer supporting heavy fabrication operations. He became Technical Director and Sales and Marketing Director for ITT Vulcan Electric (later Vulcan Electric) in Kezar Falls and for ten years owned and operated his own business providing industrial and fire safety products, training, and consulting throughout Northern New England. After selling his business to a national chain, Sam became Manager of the Program Management Division and later Chief Engineer for Fiber Materials, Inc. in Biddeford. Sam is also a member of the adjunct business faculty at Andover College and York County Community College. He holds the undergraduate degree of Mechanical Engineer from Stevens Institute of Technology, a Master of Science degree in Industrial Administration from Union College, and is licensed as a Professional Engineer in the States of Maine, New Hampshire, and New York. Sam joined My Plan in June of 2006. Sam is expected to oversee the day-to-day management of the company including purchasing, production, safety, and financial operations.
Remuneration of the management team will be primarily through distribution of profits. Messrs Doe and Blank presently earn salaries of $55,500 and $38,100 respectively, but will derive the most substantial portion of their future income from stock distributions. Mr. Cohen has been hired at an annual salary of $50,000, and expects to receive an additional bonus based on his ability to produce future company profits.
Additional Business Advisors
In addition to the management team, My Plan Design is proud to rely on the expertise and advice of others in several areas. These individuals include, but are not limited to:
Pick Your Name, Maine State Accounting Services, Wells, Maine
Ted E Lost, Esq., Legal Beavers LLC, Portland, Maine
Sondra Seaks, Small Business Development Counselor, University of Southern Maine, Portland, Maine
Financial Considerations
Sales History and Projections
My Plan, Inc’s. history is one of increasing sales. In 2003, its first year of operation as a furniture designer and manufacturer, it had loss of $1,429 on sales of $7,592. In 2004, its first “real” year of operations My Plan, Inc. had a profit of $56,917 on total sales of $434,053. The third year of operations produced a profit of $14,427 on sales of $1,007,511. The reduction of profit on increasing sales is the result of a bad debt of approximately $110,000, an unrecoverable malfeasance by a past officer of the company. In 2005, the company and the individual involved reached an agreement that she would repay $40,000 of the total amount. However, upon reevaluation of that agreement, the company has concluded that the individual simply has no capacity to repay that amount and is unlikely to gain that capacity in the foreseeable future. Therefore, My Plan, Inc. anticipates an additional bad debt write-off of $40,000 in 2006. Other than the write-off, the matter has been completely resolved and no administrative or legal actions remain. The company no longer has any relationship with that individual.
Sales for 2006 and succeeding years have been projected from actual in-house contracts and from our existing clients as follows. Please note that the projections from Wonderful Life® and Village Shops® were reviewed with their appropriate representatives as of June 10, 2006.
Read the following table about the projections of the sales Wonderful Life® and Village Shops® . Write a academic report to your boss.
2006 Sales through May $366,332
2006 Contracts Received but not yet Invoiced (Backlog) $296,000
Anticipated Remainder 2006
Wonderful Life Components® $386,750
Village Shops® $630,000
Pizza $ 80,000
Dana’s Restaurant $150,000
$1,909,082
Projecting income from existing customers at what we believe is a conservative increase of 5% yields sales of $2,004,500 in 2007, and $2,104,800 in 2008. To those figures we estimate sales of our own line of branded furniture at $300,000 for 2007 and $700,000 in 2008 yielding total income of:
2006 2007 2008
Anticipated Sales (1000’s) $1,910 $2,300 $2,800
Considerations Affecting Profitability
Four items having direct impact on profitability are affecting current operations of My Plan, Inc. The first, the lack of an adequate reserve of cash, is reducing the profitability by necessitating factoring of receivables. Factoring of receivables cost the company $15,500 in 2005 and $14,400 through the second week of June, 2006. My Plan, Inc. estimates that the interest paid for access to a revolving line of credit or commercial loan would cost less than 2/3 that of the present receivables factoring agreement.
The second item affecting profitability during 2005 and 2006 was the need for shop personnel to work an inordinate amount of overtime to manufacture the products. Two changes are anticipated to reduce overtime by at least 50% and consequently the labor cost for production. The new plant manager, Sam Spade has been charged with hiring additional skilled workers to minimize the effective labor rate. In addition, with Sam’s manufacturing background and a relatively low number of product designs, anticipated financing will permit automation and/or increased tooling and fixturing to be utilized to improve productivity and efficiency and minimize the quantity of hours required to produce each product. The pro Forma financial projections are based on a ratio of labor to sales of 45% in 2006 lowering to 42% in 2007 and 40% in 2008. The actual rate in 2005 was 44%. Year-to-date labor for 2006 was over 50% because of the amount of overtime required for timely shipments.
A third item, institution of a modern (but simple) production control system will increase our ability to level load shop labor resulting in the operation with an efficient number of workers and minimum amount of overtime. Implementation of that system will also enable better control of purchasing quantities, pricing, and lead times. Although no credit has been taken for these improvements in our pro forma financial projections, clearly placing orders with a vendor on the basis that they have a required item in stock is not a cost efficient method of doing business!
A fifth item, while not presently affecting the financial operations, but one which must be rectified for the long term success of My Plan is the present reliance on one customer for the vast majority of our sales. Access to an adequate source of funding will permit My Plan Design to meet the needs of Wonderful Life® thereby retaining an adequate level of sales while courting and growing a diversified customer base. As the company’s profitability grows, establishment of employee benefits will also yield a more stable, qualified workforce leading to even more efficient production.
Without attempting to quantify additional operational improvements, utilizing existing historical costs but taking into consideration only labor efficiency improvements and reduced interest costs, My Plan estimates profitability in 2006, 2007, and 2008 as indicated in the following table:
2005 2006 2007 2008
Income (sales) $1,007,511 $1,910,000 $2,300,000 $2,800,000
Actual or Anticipated Gross Profit $658,439 $1,241,500 $1,495,000 $1,820,000
Adjustment for Extraordinary Bad Debt -$68,661 -$40,000
Adjustment for consultant -$10,000
Anticipated or Restated Gross Profit $579,778 $1,201,500 $1,495,000 $1,820,000
Total Operating & Financing Costs $564,725 -$1,085,522 -$1,156,944 -$1,341,366
Restated or Projected Profitability $15,053 $115,978 $338,056 $478,634
My Plan, Inc. stresses that the above projection of profitability takes no advantage of anticipated efficiencies in purchasing power, prompt payment of invoices, economies of scale, or other cost reductions normally anticipated with sales growth and increased profitability resulting from an adequate source of operating funds. In view of the uncertain economic conditions existing in the U.S., we have chosen to limit our sales and cost reduction projections to those that have been specifically identified or verified by our client forecasts. Details and the anticipated impact of income and expenses from operations on the company are shown in the following section, Pro Forma Financial Projections.
Equipment List
The following is a list of current assets in tools and equipment owned by the company.
ITEM QJOE ITEM QJOE
Chop Saw 4 Small Portable Welders 3
Clamps 50 Large Welders 2
Jointer 1 Bench Grinder 2
Table saw 2 2 Small Drill Presses 2
Table Saw 1 2 Large Drill Presses 2
Small Air Compressors 5 Job Box 1
1 Large Air Compressor 1 Plasma Cutter 1
Band Saw 1 Cement Mixer 1
Dust Collector 3 Cement Vibrator 1
Routers 2 Wet Grinder 1
Planer 1 Steel Chop Saw 2
Timesaver 1 Evolution Saw 1
Material Racking System 1 Jet Saw 1
Spraying System 1 Fax/copy/scan 1
Portable Table Saws 2 Computer 1
Bench Sander 1 Spray Booth 1
Woodstove 1 2000 Chev. Truck 1
The book value of the tools and equipment at the end of 2006 will be $14,049. Their original cost was $65,750. My Plan, Inc. estimates the market value of these assets to be between $30,000 and $35,000.
Pro Forma Financial Projections
The following Income Statement, Balance Sheet, and Cash Flow Statement are projections of the company’s status at the end of 2006, 2007, and 2008, and include actual figures for 2005, the first full year of representative operations by the company.
The detailed P&L, Balance Sheet, and Cash Flow Projections are contained in Appendix 3. Company tax returns for 2004 and 2005 are contained in Appendix 4 for comparison purposes. The following information is a summary of the Pro Forma projections.
Income Statement (Profit and Loss Projections)
Actual Projected
($1,000s) 2005 2006 2007 2008
Sales 1,008 1,910 2,300 2,800
Cost of Goods Sold 349 689 805 980
Gross Profit 658 1,241 1,495 1,820
Labor 440 910 966 1,120
Other Oper. Expenses 186 185 176 206
Total Oper. Expenses 626 1,095 1,142 1,326
Other Expenses
Financing 18 30 15 15
Net Income 15 116 338 479
==== ===== ===== ====
Balance Sheet
Actual Projected
($1,000s) 2005 2006 2007 2008
Cash -8 68 201 428
Accounts Receivable 10 77 87 97
Other Current Assets 73 52 55 59
Fixed Assets 16 26 60 92
Other 1 4 4 4
Total Assets 93 226 407 679
Current Liabilities
Accts Payable 36 11 16 21
Other 46 26 31 36
Long Term Liabilities 6 154 137 120
Total Liab. 89 191 184 177
Equity
Add’l Paid in Capital 1 1 1 1
Retained Earnings 0 3 59 247
Shareholder Dist -12 -85 -150 -200
Net Income 15 116 338 479
Total Equity 4 60 248 502
Liabilities + Equity 93 226 407 679
==== ==== ==== ====
The anticipated growth in equinox and net income is demonstrated in the following chart:
Cash Flow Projections
Anticipated Use of Financing
My Plan Design anticipates the requirement for $150,000 of financing for near term operations (through 2008). Our request is for approval of an additional $100,000 of financing contingent upon satisfactory demonstration of the need and successful company operations to fund additional growth. The initial use of the funding will be:
Estimated Cost
Hardware and software for integrated financial accounting
and manufacturing control $15,000
Funding payables over 30 days (until we develop sufficient
rapport with our vendors to extend terms to 45 days) $15,000
Eliminate factoring of receivables $75,000
Temporary funding of up to four (4) new production employees
and establishment of company benefits $15,000
Shop safety and production equipment upgrade $10,000
Subtotal $130,000
Contingency $20,000
======
Total $150,000
Exit Strategy
It is difficult for one to imagine an unsuccessful outcome for My Plan, Inc. given its growth in the last two years. But the company’s principals do understand and acknowledge that events beyond their control such as customer bankruptcy or selection of a competitor in lieu of My Plan, a catastrophic natural occurrence or accident, or even a poor business decision could put a fledgling company at risk.
Prior to establishing My Plan, Inc., the two majority owners worked together to design and fabricate products similar to those being produced by the company. Both individuals have taken substantial reductions in total remuneration during the startup phase of the company. While their anticipated total income is far greater within the corporate structure as My Plan grows according to plan, if the “unthinkable” does happen, both Joe Doe and Tom Blank would revert to a small partnership (de facto, if not legal partnership entity) and be able to repay the guaranteed loans.
Another advantage of adequate financing that would benefit the financing organization, the company’s principals, the employees, and even our customers in the event of an unanticipated natural occurrence or accident is that business interruption insurance and similar mitigating instruments would become affordable to the company.
SAMPLE REPORTS
Business Software plc
Product report
Executive summary
We have been contacted by Lenz AG, a German manufacturer of mobile telephones, and asked about the possibility of a co-operation agreement. We would adapt our business software for use in their products. Tests show that their product is a very good one and popular with our target market.
Introduction
This report will look at:
• the hardware manufacturer and their equipment software that could be used on their mobile phones the advantages of working together .
recommendations for action
Findings
1 Lenz has been developing cheap, small-scale electronic devices for 35 years. In the last five years, they have focused on more expensive mobile phones for businesspeople. These have been very successful, One
in four mobile phones for the business market is a Lenz.
2 Our new 'Executive Organiser' software has a lot of attractive features for the travelling businessperson (e.g. address book, e-mailware, voice recorder, street-finder function, etc.).
3 Market research shows that there is a big interest in our products being used on machines apart from computers.
Conclusion
The two companies have products which fit well together.
Recommendation
We should have a meeting with representatives from Lenz as soon as possible to discuss a joint venture between our companies, with the aim of putting our software onto their mobile phones.
TR ESSEL INVESTMENT PLAN
1. Rationale :
In recent years, Tressel has become one of Europe's leading brands of sportswear. It is now on its way to becoming a global brand.
However, in the last two years, sales have declined, causing a sharp decrease in the profits. This has been caused mainly by three factors; fierce competition in the industry bringing prices down; a fall in demand; production problems.
2. Objectives
To remedy the problems outlined above and make Tressel a more competitive business internationally, an investment of €2.5 million was proposed.
3. Options and benefits
The Board of Directors has agreed the following investment plan.
• Firstly, we need to invest in market research. This should give us a better understanding of our target customers' changing needs and desires, which can then guide product development.
• Product research and development is the second area that we need to develop, as we have relied heavily on the success of our traditional products. While these will probably continue to account for more than 50% of our turnover in the next two or three years, we will not stay ahead of the competition if we do not vary our range.
• Finally, setting up online sales should widen our customer base, increase sales, and make us more competitive.
4. Cost
Investment in market research €900,000
Investment in research and development €1,300,000
Setting up online sales " €300,080
5. Timeline
Market research: to be completed in three months' time, i.e. by the end of June.
R&D: ongoing process to be speeded up from July.
Online sales: website up and running by September.
6. Evaluation
The heads of the departments concerned will hand in a monthly progress report. The Board will then meet to assess the progress made in all three areas.
ANSWER
For this university course an essay is completed in six stages. The first stage is a private tutorial in which the task and topic are fully discussed with the tutor. A reading list should be obtained, detailing useful resource material.
The second stage involves conducting suitable research. Notes are taken from available literature at the library, and data collected from questionnaires, interviews and surveys. Writing the first draft is the third stage. First, it is necessary to organize the content of the essay, and produce a brief outline. Next, the draft is written in the acceptable formal academic style, and checked for appropriate language.
Stage number four is another tutorial or study group discussion, during which problem areas are analyzed, and further ideas and suggestions are noted. The fifth stage includes reading the resource material again, before writing a second draft using suggestions from stage four. Once completed, all quotations should be checked for errors.
The sixth stage consists of writing the final draft of the essay. A spell check is required, before adding a title page and compiling a bibliography. The essay should then be submitted before the deadline for completion. (192 words)
Do you agree or disagree with the following statement? Business should do anything they can to make a profit. Use specific reasons and examples to support your position.
ANSWER
After I get my degree, I plan to start a business. My goal is to make money, a lot of money. However, I can’t forget that there are more important things in life than earning a profit. I must consider the people I work with, the customers I serve, and the community I live in.
My colleagues are a very important part of my business. Without them, I would not have a business. I depend on them to help me carry on the day-to-day operations. I depend on them for their advice on what to sell and how to sell it. I must compensate them for their work. I can’t take large profits without sharing with the people who make it possible.
Similarly I would not have a business without my customers. I can never forget that they could take their business elsewhere. I must give them good value for their money. I can’t overcharge them. I must also remember that money is as important to them as it is to me. I want my customers to trust me and keep coming back.
My employees and I all live in the same community as our customers. We can’t ignore it. We must play an active part in it. I feel it is important that some of the profits my business earns from the community be returned to the community. We need to support community programs like summer jobs for high school students, campaigns to clean up the parks, and efforts to make the shopping area more attractive.
A business must make profits but we all- workers, customers, community- must profit from a successful business.
Reports
Work in small groups. Choose one of the products shown. Then turn to its Information file on page 142. Prepare a short presentation about your product. Invent any additional information that you wish.
Then form new groups and present your products to each other. Answer any questions that you are asked about them.
Outdoor heater juice extractor Leather attache case
Useful language
Introducing the product
Mentioning selling points
It has several special features.
A very useful feature is the energy-saving design.
Another advantage is its very small size.
Inviting questions
Does anyone have any questions? Would anyone like to ask a question?
This is our new product. I'm going to tell you about our new product.
Describing the product
Let me tell you about its special features. It's made of leather/wood/steel/aluminium. It weighs just 2.3 kilos. It comes in a wide range of colours.
Stating the product's uses
It's ideal for travelling. It's designed to be used with any type of material.
CASE STUDY : Minerva A.G.
Background
Minerva A.G., based in Munich, Germany, is a chain store which sells a range of stylish, innovative products. Many of its products feature new technology, but the stores sell everything from furniture and fashionable clothes to kitchenware and household goods. It is well-known for its original designs and high quality. On the window of every store are the words Creativity, Imagination, Style, Novelty, Originality.
Customer satisfaction survey
Minerva A.G. sent questionnaires to all its customers. Here is an extract from the Marketing Department's report.
3 Our customers say:
3.1 Minerva A.G. has very few great new products for customers with busy lifestyles.
3.2 The range of products is not as wide as it used to be.
3.3 There are too many hi-tech products. Customers want fewer products but more original ones.
3.4 Most products are over €100. Customers who are looking for gifts think they are too expensive.
3.5 There are not enough special offers to encourage customers to spend more.
Need for new products
Chairperson Ulrika Nielsen and her directors have invited several foreign firms to present their new products to the Minerva A.G. board. All the companies are well-known for their innovation. The directors will choose the best and most exciting products for Minerva A.G.'s stores.
COMPANY A
COMPANY B
Weight Monitor
Special features:
• Measures how much body fat you have
• An LCD display shows changes in your weight
• Easy-to-read graphs and charts
• Holds health and weight records for up to 5 years
Prices €45
Personal Satellite Navigation System
Special features:
• Pocket-sized
• Download any world city map from your computer
• No need to carry a street map ever again
• Includes tourist information
• Slim, lightweight
• Colours: silver or black
• Price: €320
COMPANY C
COMPANY D
Floating Globe
Special features:
• Appears to float in the air because it
is controlled by magnets
• Rotates
• Lights up
• Many physical features highlighted, for example mountain ranges
• Ideal for the home or office
• Price: €220
Virtual Passenger
Special features:
Chats, tells jokes, plays music, asks questions
Keeps you awake
Stops boredom
20,000 word memory - knows your Interests
Automatically opens windows
Alarm function if driver falls asleep
Ideal for sales reps
Price: €500
1 Work in small groups. Choose one of the companies above and prepare a presentation on its product. (Or if you prefer, think of another product which the company is about to launch.) Invent any information you wish.
2 Form new groups and present your products. Try to persuade the Minerva A.G. directors to buy large quantities. When you are not presenting, play the role of a Minerva A.G. director and ask questions about the products.
3 After all the presentations, discuss which product is the most exciting and innovative.
Writing
As a Minerva A.G. director, write a short report on one of the products which you saw presented. Recommend whether Minerva A.G. should place a large order for the product or not.
Business Software plc
Product report
Executive summary
We have been contacted by Lenz AG, a German manufacturer of mobile telephones, and asked about the possibility of a co-operation agreement. We would adapt our business software for use in their products. Tests show that their product is a very good one and popular with our target market.
Introduction
This report will look at:
• the hardware manufacturer and their equipment software that could be used on their mobile phones the advantages of working together .
recommendations for action
Findings
1 Lenz has been developing cheap, small-scale electronic devices for 35 years. In the last five years, they have focused on more expensive mobile phones for businesspeople. These have been very successful, One
in four mobile phones for the business market is a Lenz.
2 Our new 'Executive Organiser' software has a lot of attractive features for the travelling businessperson (e.g. address book, e-mailware, voice recorder, street-finder function, etc.).
3 Market research shows that there is a big interest in our products being used on machines apart from computers.
Conclusion
The two companies have products which fit well together.
Recommendation
We should have a meeting with representatives from Lenz as soon as possible to discuss a joint venture between our companies, with the aim of putting our software onto their mobile phones.
Tracy Cruicksbank
Research and Development Director
19 October 2009 A report should be well 'organised with information in a logical order. There is
no set layout for a report.
It will depend on:
a) the type of report
b) the company style.
The format used here is suitable for formal reports:
The executive summary is a summary of the main points and conclusion of the report. It gives the reader a quick overview of the total situation.
The introduction shows the points that will be looked at.
The findings are the facts discovered.
The conclusion is what you think about the facts and how you interpret them.
Recommendations are practical suggestions to deal with the situation and ideas for making sure future activities run more easily.
TR ESSEL INVESTMENT PLAN
1. Rationale :
In recent years, Tressel has become one of Europe's leading brands of sportswear. It is now on its way to becoming a global brand.
However, in the last two years, sales have declined, causing a sharp decrease in the profits. This has been caused mainly by three factors; fierce competition in the industry bringing prices down; a fall in demand; production problems.
2. Objectives
To remedy the problems outlined above and make Tressel a more competitive business internationally, an investment of €2.5 million was proposed.
3. Options and benefits
The Board of Directors has agreed the following investment plan.
• Firstly, we need to invest in market research. This should give us a better understanding of our target customers' changing needs and desires, which can then guide product development.
• Product research and development is the second area that we need to develop, as we have relied heavily on the success of our traditional products. While these will probably continue to account for more than 50% of our turnover in the next two or three years, we will not stay ahead of the competition if we do not vary our range.
• Finally, setting up online sales should widen our customer base, increase sales, and make us more competitive.
4. Cost
Investment in market research €900,000
Investment in research and development €1,300,000
Setting up online sales " €300,080
5. Timeline
Market research: to be completed in three months' time, i.e. by the end of June.
R&D: ongoing process to be speeded up from July.
Online sales: website up and running by September.
6. Evaluation
The heads of the departments concerned will hand in a monthly progress report. The Board will then meet to assess the progress made in all three areas. There is no set layout for an investment plan, but the information should be well organised.
The various sections should have a clear heading and be in a logical order.
The rationale gives background information relevant to the reasons for the plan.
The objectives are the goals which your investment will enable you to achieve.
This section gives details of the areas you have chosen to invest in and of the benefits they are likely to provide.
Breakdown of the total amount of money invested.
The timeline shows the period of time during which you expect the various stages of the plan to be reached.
This section gives information about the mechanism you have put in place to assess the progress made in all three areas.
kinh.can- Resourceful
- Tổng số bài gửi : 140
Join date : 23/09/2011
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Re: Tai lieu av Thuong Mai
by kinh.can Wed Oct 05, 2011 9:52 pm
vi minh coppy tu word qua ... nen hok co da'nh dau trang ... cac ban thong cam nhe'
kinh.can- Resourceful
- Tổng số bài gửi : 140
Join date : 23/09/2011
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