Business Plan

Business Plan

BUSINESS PLAN

Introductory letter 2

Executive Summary 2

STATEMENT OF OBJECTIVES 2

Mission Statement 2

Driving Force 3

Market Position 3

Streanthes and Weaknesses 3

Streanthes: 3

Weaknesses: 3

Opportunities and threats 3

External Opportunities: 3

External Threats 4

Key Factors For Success 4

Goals and Objectives 4

Strategy 4

BACKGROUND INFORMATION 5

TECHNICAL DESCRIPTION OF SERVICE 5

MARKET DATA 6

Target Market Information 7

Social Environment 7

Demographic 7

Culture 8

Political Environment 9

Economic Environment 9

Competitive Environment 10

Potential Problems 10

Market Data Summary 10

Target Clients 10

Target Market Size 10

MARKET STRATEGY 10

Product 10

Price 11

Place 11

Promotion 11

SELLING TACTICS 12

Cash and Accounts Receivables 12

Peak sales 12

OPERATIONS PLAN 12

FINANCIAL PLAN 13

Necessary Financing 13

Cash Budget 13

Balance Sheet 14

Income Statement 15

Ratio Analysis 16

Depreciation Estimation 17

Fixed Capital Estimation 17

Working Capital Estimation 18

Marketing Estimation 18

Rent Expense Estimation 19

MANAGEMENT PLAN 20

HUMAN RESOURCES PLAN 20

CONCLUSIONS 21

Introductory letter

This business plan was created to check the idea about the

effectiveness of the creation of the database that will help clients at

different shopping centers to find products more quickly. As a result, it

saves their time and money.

Executive Summary

The company name is Svetlana. The main idea of venture is the creation

of the database of products that will help potential clients to find what

are necessary for them.

The mission of it is to be the best consultants of defining the

nonfood product location at the Irkutsk markets, to take care of our

clients by saving their time and money, when they do shopping, to offer the

best service by using modern computer technology and polite and affable

consultants

The market of such informational service is quite big and has a lot of

opportunities for development. In addition, Svetlana can use the greatest

of them because there are no competitors at the market. It offer product

that satisfy most of this market demand, as the product contain all main

information potential clients want to get to find a product. The sales

policy is build on the statement that clients lose nothing, but only save

their time and money.

After the third year of existence, Svetlana reach the after-tax profit

level of $3 510 and will have ROE 35%.

The structure of the company is simple as it is quite small, and it is

ineffective to use complex system of the distribution of functions.

So, as a result of market opportunities, Svetlana have a lot of

chances for succeed.

STATEMENT OF OBJECTIVES

Mission Statement

We will be the best consultants of defining the nonfood product

location at the Irkutsk markets. We will take care of our clients by saving

their time and money, when they do shopping. By using the best computer

technology and polite and affable consultants, we will offer the best

service our clients can get.

We will create a positive working environment for our employees that

will promote satisfaction and personal growth.

Driving Force

* Our company will offer service that does not exist yet at Irkutsk. It

will create very good advantage for our development.

* We will place the emphases on the Internet and telephone consultations.

* The business will be based on TQM.

Market Position

The main our clients are busy people who do not have time to go from

shop to shop and want to find product as quickly as possible. Such people

are the most likely users of our database.

Streanthes and Weaknesses

Streanthes:

* Low-cost equipment

* The absence of such database at all local product markets

* Skilled labor force

* Low operational cost

* Use of high technology

Weaknesses:

* The creation and updating of database may take a lot of time

* Poor marketing materials

* High taxes for this kind of service

Opportunities and threats

External Opportunities:

* Changes in tax structure

* The Increase of customer demand level

* The government policy for supporting the small business sector

External Threats

* Increased competition

* Economic downturn or recession

* The decrease of customer demand level

Key Factors For Success

* The absence of competitors

* Broad approach that is provided by the use of Internet and telephone

consultations

* Polite and affable personal

Goals and Objectives

* To create the consulting center that will cover all main nonfood markets

In Irkutsk

> The collection of information and the creation of the consulting

center in the ``Irkutskiy`` market

> The collection of information and the creation of the consulting

center in the ``Fortuna`` market

> The collection of information and the creation of the consulting

center in the ``Complex`` market

* To create the centralized informational system

> The development of database

> The installation of the server station and user machines

* To create web-site

> The market research of similar sites in Internet

> The creation of the site structure

> The creation of the site interface

Strategy

As our service is new in the Irkutsk market, our company plans to

follow the differentiation strategy. The determining factors will be

clients and development. Price will not take the first place. We plan the

step by step development at first in the ``Irkutskiy`` market, then in the

``Fortuma`` market, and the last step is ``Complex`` market. In addition,

as our service is new, we plan to create loyalty of our customers until

direct competitors appear. The scope of development will be the Irkutsk

nonfood markets, which sell clothes, shoes, home appliances and other

similar things.

BACKGROUND INFORMATION

Irkutsk is the biggest city of eastern Siberia. It has a lot of

markets, but any of them does not have any consolidating data base that

help people to find goods that is necessary. So, this database of products

is a result of the demand of many people.

Such business is new for the Irkutsk market, so there are no examples

of development and existence of similar service, where we can get

information and some experience about our venture. The positive side of

such situation is that we will be the first, and, as a result we can get

the greatest benefits. The negative side is that we will have a lot of

unpredictable situations that may create big obstacles for good

development. Our informational service center can be classified as

informational business, which is in the beginning stage in Russia today. It

also creates some global opportunities and threats because during this

stage the most prosperous ventures appear, but also many businesses force

into insolvency.

So, current situation gives our venture a lot of opportunities for

good development.

TECHNICAL DESCRIPTION OF SERVICE

Our product is information. We plan to offer information about non-

food products such as clothes, shoes, bags, home appliances and car spare

parts for potential clients in the Irkutsk markets such as ``Irkutskiy``,

``Fortuna``, and ``Complex``.

Information about clothes and shoes will consist of the type of

clothes, a season, the country of origin, the company name, the year of

production, size, color, price range, and the location and number of the

pavilion or the section of a market.

Information about bags will consist of the type of bags, the company

name, the country of origin, the year of production, price range, and the

location and number of the pavilion or the section of a market.

Information about home appliances will consist of the type of a home

appliance, the company name, the year of production, size such as the

length of diagonal for TV, price range, and the location and number of the

pavilion or the section of a market.

Information about car spare parts will consist of the type of a spare

part, the company name, the type of a car and other spare parts, where this

spare part is used, the year of production, price range, and the location

and number of the pavilion or the section of a market.

The example of list:

|№|Typ|Name|Si|Season |Count|Year of|Color |Price |Location |

| |e | |ze| |ry of|product| |range | |

| | | | | |origi|ion | | | |

| | | | | |n | | | | |

| | | | | | | | | |Market |Pavelion|

|1|Jea|Anga|32|Summer/F|Russi|2001 |Red/Gre|$20--$3|“Irkuts|#1,#102,|

| |ns |ra | |all |a | |en/Blue|2 |kiy” |#176 |

| | | | | | | |/Black/| | | |

| | | | | | | |other | | | |

|2|Jea|Lee |32|Summer/F|China|2002 |All |$30--$6|“Irkuts|#17,#78 |

| |ns | | |all | | | |2 |kiy” | |

|3|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |

| | | |. | | | | | | | |

|4|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |

| | | |. | | | | | | | |

|5|…..|….. |….|….. |….. |….. |….. |….. |….. |….. |

| | | |. | | | | | | | |

The Database will be created in the FoxPro 5.0. It will be adopted for

using through the local net and the Internet. The design of the Internet

site will be developed with the Microsoft FrontPage.

This database will be updated every second day. At first time it will

be done manually by surveying the owners of the pavilions or the sections

of a market, but then we plan to automate this process.

The information will be deliver to customers on printed lists, if they

get information directly in the market building from an operator. Next, it

will be delivered electronically, if customers get information by using the

Internet. Finally, it will be delivered by fax or orally, if customers get

information by phone.

MARKET DATA

To analyze and collect the market data I used as the statistical

sources, so and my own experience and knowledge.

Target Market Information

The shopping center “Irkutskiy” is the biggest nonfood market in

Irkutsk, in which everybody can buy everything, what is used in everyday

life, for example clothes, shoes, satchels, wallets, kitchen-ware and etc.

It unites three shopping centers and contains up to 500 small shops. The

shopping center “Irkutskiy” is the only big nonfood shopping center with

such range of goods in Irkutsk and, consequently, serves most of the

Irkutsk population. The shopping center ``Fortuna`` is the biggest car

spare part market. The “Complex” is also a big nonfood market, but it is

smaller than “Irkutskiy”.

Social Environment

Demographic

The Irkutsk population today is 592,4 thousand people.

(http://www.centerru.com/regions/regions.asp?id=7). The potential clients

of the shopping center “Irkutskiy”, where I plan to open the first

consulting center, and also the potential clients of my database are people

from 18 to 60 years. It is 60% of the whole population 355,2 thousand

people. (http://www.centerru.com/regions/diagrams/d1_r.html). I do not take

into account people below 18 and over 60 because their parents or children

usually maintain such people. The people over 60, who are not maintained by

their children, usually have very small pension.

In addition, the shopping center “Irkutskiy” is oriented on the people

and households from the middle class with revenues from 120,000 to 240,000

rubles per year. According to the statistical information and my knowledge

it is approximately 10% of able-bodied citizens or 35,5 thousand people.

(http://www.centerru.com/regions/regions.asp?type=reg&id=7). I also made a

small survey, which tells that approximately once for three months

respondents of such people make purchases of clothes, shoes, or some other

similar products. I assumed that for year potential clients make 142

thousand purchases, 0,38 thousands a day. If every second makes such

purchase in of the shopping center “Irkutskiy”, than there may be

approximately 190 potential clients of my database a day according to

demographic analysis.

Culture

According to my survey and experience, I divided all potential clients

into two categories. The first is people, who like go shopping and do it

for rest. They are approximately 70% of respondents. The second is people,

who do not like go shopping and do it as necessity 30%. The second category

is my potential clients. So, I assumed that there are about 57 (190*30%)

potential clients of my database a day.

Political Environment

For last years, the local government has made attempts to increase the

power of the consumer protection law. It reflects in the increasing

quantity of people, who are content from purchases. As a result, more

people are ready to make a purchase and companies increase their quality of

service and products. It can be applied also to the shopping center

“Irkutskiy” because for the last year more people have made purchases there

than for previous years. These political attempts and other economical

factors are the causes of the increasing quantity of clients in the

shopping center “Irkutskiy”, and, consequently, my potential clients.

Economic Environment

For last years, the level of revenues of population in Irkutsk is

constantly increasing.

(http://www.centerru.com/regions/regions.asp?type=reg&id=7). It increases

the purchasing power of population. As a result, the shopping center

«Irkutskiy» has constantly increasing quantity of clients that can be the

potential clients of my database.

The increase in the level of revenue results in the increase quantity

of nonfood purchases because this sector of household is only 15% of all

households revenues (about 60% of revenue are spent for food in Russia). It

is significantly less than in developed countries. So, the increase of

revenues increases the quantity of nonfood purchases.

Competitive Environment

There is no such service in the shopping center «Irkutskiy» and other

markets. So, there are no direct competitors.

Indirect competitors are different print media that usually give brief

information, where people can buy some kinds of clothes, shoes and etc.

Such information is usually about one product or one company and does not

give potential clients the picture of the whole market to choose the most

appropriate product. So, these competitors can not influence my business

very much.

Potential Problems

1. My assumption that every second purchase is made in the shopping center

“Irkutskiy” may be overrated, so there are may be the smaller quantity of

potential clients of my database.

2. The results of my survey may be not valid. It also may change the

quantity of potential clients.

Market Data Summary

Target Clients

Target clients are people between 18 and 60 years old, who have

revenues from 120,000 to 240,000 rubles per year and go shopping as

necessity. They will use my service as they do not want to spend much time

on shopping and want to save their time.

Target Market Size

There are 355,2 thousand people between 18 and 60 years old. Ten

percent of them 35,5 thousand have an average annual income between 120,000

to 240,000 rubbles. Thirty percent of them do shopping as necessity. So, my

target market size is 10,650 clients a year. If every client makes four

purchases a year in average than total annual purchases are 42,600.

MARKET STRATEGY

Product

The product of the venture will be the information about available

goods in the shopping center «Irkutskiy» at first. Then we will broad our

service and offer information about the shopping center «Fortuna». Finally,

we will create database, where each person will be able to get information

about products that are available at the shopping center «Irkutskiy», the

shopping center «Fortuna», and the shopping center “Complex”.

Price

Price policy will be based on the market demand. The small survey, I

made, gave information that the best price will be 24 rubles ($ 0,8).

Place

We plan to develop three ways of delivering information. First, we

open the consulting center in the shopping center «Irkutskiy», then in the

shopping center «Fortuna», and finally in the shopping center “Complex”.

Each center will have one consultant that will sell clients necessary

information for cash. Second, after the establishment of the consulting

center in the shopping center «Fortuna» we plan to create the wed site,

which will offer the same service as consulting centers. After the

establishment of the consulting center in the shopping center “Complex” we

plan to offer phone consultation about available products at these markets.

Promotion

The key promotion tactics will be that clients will lose nothing. I

plan to sell necessary information and give a coupon that will offer a

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