Your business background

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Your business background

  1. 1. MADE FOR MIZZI BUSINESS PLAN Prepared by; Sam Messmer, Andrea Mizzi and Chan Richardson 2010 Copyright 2010 August 2010 The Small Business Plan for Made for Mizzi Page 1
  2. 2. TABLE OF CONTENTS FOR WRITTEN REPORT 1. INTRODUCTION............................................................................................................20 BUSINESS SUMMARY ...................................................................................................22 2.3MARKETING PLAN:....................................................................................................22 2.4OPERATIONAL PLAN: ...............................................................................................23 2.5FINANCIAL PLAN:.......................................................................................................24 BUSINESS PROFILE........................................................................................................25 3.1 BUSINESS DESCRIPTION:........................................................................................25 3.1.2 LEGAL STRUCTURE OF BUSINESS (TICK AS APPLICABLE):..........................26 3.1.4 INDUSTRY KNOWLEDGE AND EXPERIENCE / SKILLS OF KEY PERSONNEL: ............................................................................................................................................26 3.1.5 LOCATION AND DESCRIPTION OF PREMISES:..................................................27 3.2 SWOT ANALYSIS.......................................................................................................27 STRENGTHS.....................................................................................................................27 THE STRENGTHS OF OUR BUSINESS ‘MADE FOR MIZZI’, OUTLINED IN THE EARLIER SWOT ANALYSIS; ARE OFFERING A FRESH AND UNIQUE PRODUCT TO OUR CONSUMERS (THIS WAS THE MAIN REASON FOR OUR SUCCESS DURING OUR TRIAL PERIOD), CONSTANT PROFITS EVEN THOUGH CHANGES IN PRODUCT PRICES WERE MADE, SOME OF OUR PRODUCTS CAN ONLY BE BOUGHT ONLINE - OUR BUSINESS GIVES OUR CONSUMERS THE OPTION TO BUY THESE ITEMS IN A REAL LIFE SITUATION AND REDUCE THEIR RISK OF FRAUD, OUR PRODUCTS WERE POPULAR AMONGST OUR TARGET MARKET, ESTABLISHED OUR CUSTOMER BASE THROUGH ADVERTISING OUR BUSINESS, PRODUCTS WEREN’T BULKY THEREFORE WERE EASY AND LOW MAINTENANCE TO STORE, MATERIALS WERE RELATIVELY CHEAP – ESPECIALLY WHEN BOUGHT IN BULK WILL INCREATE COST EFFECTIVENESS.27 WEAKNESSES..................................................................................................................28 OUR MAIN WEAKNESSES WERE THAT IT WAS VERY TIME CONSUMING TO HAND MAKE THE KEY RINGS, DELIVERY TIMES WAS EXTREMELY UNRELIABLE AND SUPPLIERS WERE NOT DEPENDABLE. THIS CAUSED CUSTOMER August 2010 The Small Business Plan for Made for Mizzi Page 2
  3. 3. DISSATISFACTION AND LOSS OF LOYALTY AS THE PRODUCTS THEY PAID FOR WERE NOT AVAILABLE ON THE DATE THEY WERE PROMISED. TECHNOLOGICAL ADVANCES (IPOD) CAUSED DEPRECIATION IN OUR GOODS SOLD (NO LONGER USED BY CUSTOMERS), CAUSING A LOSS IN FINANCES. BECAUSE WE DIDN’T MANUFACTURE ALL OF THE PRODUCTS OURSELVES (IPOD CASES AND ERASERS) THE PRODUCT AVAILABILITY WAS LIMITED. THESE PRODUCTS ALSO REQUIRED A LARGE SUM OF CAPITAL TO SUCCESSFULLY RUN THE BUSINESS (PURCHASING STOCK). ................................................................................................28 OPPORTUNITIES..............................................................................................................28 POTENTIAL OPPORTUNITIES FOR MADE FOR MIZZI INCLUDE EXPANSION INTO BULK BUYING PRODUCTS SUCH AS IPOD CASES, ERASERS AND MATERIALS REQUIRED FOR THE KEY RINGS. THIS WOULD REDUCE COSTS AND ALLOW US TO COMPETE WITH THE MORE ESTABLISHED ORGANISATIONS. ANOTHER VIABLE OPTION WOULD BE MANUFACTURE THE PRODUCTS OURSELVES, CREATING MORE INDEPENDENCE AND RELIABILITY INCREASING CUSTOMER BASE AND SATISFACTION. DUE TO THE SMALL RANGE OF STOCK WE WOULD SELL ‘MADE FOR MIZZI’ WOULD HAVE TO CONSIDER MERGING WITH ANOTHER SIMILAR ORGANISATION TO MAXIMISE BULK BUYING EFFORTS. AS BULK BUYING WILL INCREASE OUR CUSTOMER BASE IT WILL ESTABLISH OUR BUSINESS NAME AND PRODUCTS, THEREFORE CREATING OPPORTUNITIES TO EXPAND NATIONALLY AND INTERNATIONAL THROUGH E-BUSINESS. ...............28 THREATS..........................................................................................................................28 THREATS THAT COULD IMPACT ON OUR BUSINESS INCLUDE A LOSS OF CUSTOMER BASE THROUGH ESTABLISHED COMPETITORS SELLING SIMILAR PRODUCTS. ALSO OUR ESTABLISHED COMPETITORS HAVE MORE FINANCE OPTIONS TO COMPETE WITH SMALLER BUSINESS SUCH AS MADE FOR MIZZI. THEIR ESTABLISHED NAME ALSO POSES A THREAT TO NEW SMALLER BUSINESSES AS THEY WOULD ALREADY HAVE A WELL ESTABLISHED CUSTOMER BASE. THE RELATIONSHIP BETWEEN SUPPLIERS AND IMPORTERS ALSO POSES THREATS THROUGH BANKING SECURITY. FURTHERMORE TRUSTWORTHY SUPPLIERS MUST BE SOUGHT AND MAINTAINED OR STOCK WILL NOT ARRIVE ON SCHEDULE AND FINANCIAL DIFFICULTIES MAY OCCUR. ............................................................................................................................................28 MARKET ANALYSIS - THE MARKET & YOUR POSITION IN IT...................................29 ............................................................................................................................................33 4.4.MARKET RESEARCH.................................................................................................33 4.5MARKET SEGMENTS..................................................................................................35 CUSTOMER PROFILE:- EXISTING AND POTENTIAL:..................................................36 August 2010 The Small Business Plan for Made for Mizzi Page 3
  4. 4. THE TARGET MARKET IS ALSO HIGHLY UNPREDICTABLE. THIS YOUNGER GENERATION’S WANTS ARE CONTINUALLY CHANGING, THEREFORE TRENDS THAT MAY BE POPULAR ONE DAY, MIGHT NOT BE THE NEXT. ‘MADE FOR MIZZI’ MUST CONTINUALLY CONDUCT MARKET RESEARCH IN ORDER TO GAIN A MORE IN-DEPTH AND UP-TO-DATE UNDERSTANDING OF CONSUMER BEHAVIOUR......................................................................................................................37 TARGET MARKET, MARKET SIZE, EXPECTED GROWTH RATES OVER SHORT TERM & LONG TERM PERIODS.....................................................................................37 ACCORDING TO THE ABS, THE AUSTRALIAN BUREAU OF STATISTICS (WHOSE PURPOSE IS TO PROVIDE THE PUBLIC WITH NATIONAL STATISTICS) THERE IS 2.7 MILLION TEENAGERS IN AUSTRALIA AND THEY MAKE UP 12.3% OF THE NATIONAL MARKET. OF THIS, 70 TO 80% HAVE COMPUTER AND INTERNET ACCESS THEREFORE E-BUSINESS IS A CONTINUAL METHOD OF SELLING PRODUCTS. FURTHERMORE HALF A MILLION AUSTRALIAN TEENAGERS OWN A PORTABLE MUSIC DEVICE AND WORLD WIDE 100 MILLION IPODS HAVE BEEN SOLD SINCE ‘APPLE’ (THE COMPANY WHICH PRODUCES IPODS) COMMENCED. THIS DATA SHOWS THE IMMENSITY OF OUR POTENTIAL CONSUMER BASE AND SHOWS OPPORTUNITIES FOR GLOBAL EXPANSION. ...........................................38 5. COMPETITIVE ANALYSIS...........................................................................................38 5.1 SWOT ANALYSIS ON YOUR COMPETITORS:........................................................38 5.1.1. STRENGTHS...........................................................................................................38 STRENGTHS OUR COMPETITORS SHOW OVER OUR SMALL BUSINESS IS THAT THEY ARE;........................................................................................................................38 WELL ESTABLISHED WITHIN THE LOCAL AND NATIONAL COMMUNITY...............38 HIGHLY PROFITABLE......................................................................................................38 ABLE TO AFFORD MORE ON ADVERTISEMENTS AND PRODUCT DEVELOPMENT ............................................................................................................................................38 MASS PRODUCTION = CHEAPER PRODUCTS............................................................38 5.1.2. WEAKNESSES........................................................................................................38 OUR COMPETITORS WEAKNESSES INCLUDE;...........................................................38 LIMITED CUSTOMER RELATIONSHIP WITH BUSINESS BECAUSE OF LARGE BUSINESS SIZE................................................................................................................38 REPUTATION IS HARDER TO CHANGE (TOO WELL ESTABLISHED WITHIN THE COMMUNITY)....................................................................................................................38 August 2010 The Small Business Plan for Made for Mizzi Page 4
  5. 5. DECISION MAKING PROCESS IS SLOWER AND MORE TECHNICAL WITH A LARGER HIERARCHY (MOST STORES CANNOT MAKE DECISION OF WHAT THEY SELL – OWNERS/FRANCHISER MAKES IT FOR THEM) ............................................................................................................................................38 5.1.3 OPPORTUNITIES.....................................................................................................38 SIMILAR TO OUR BUSINESS, OUR COMPETITORS ARE ALSO ABLE TO GAIN ON OPPORTUNITIES TO SUPPORT THEIR ORGANISATION AGAINST NEW COMPETITORS LIKE OUR BUSINESS ‘MADE FOR MIZZI’, WE HAVE ACCESSED THEIR MAIN OPPORTUNITY OVER OUR BUSINESS IS THEY ARE ABLE TO GAIN LARGE AMOUNTS OF FINANCES EASILY TO QUICKLY RESPOND TO COMPETITORS (LIKE MADE FOR MIZZI)......................................................................38 5.1.4 THREATS.................................................................................................................38 ACCESSING OUR COMPETITORS THREATS WE FOUND THAT THERE MAIN THREATS WERE BECAUSE THEY ARE APART OF A LARGER ORGANISATION, IF FINANCES DRAMATICALLY AFFECT ANOTHER BUSINESS, IT WILL AFFECT THEM AS WELL. AN EXAMPLE WOULD BE THE COLES GROUP, IF TARGET WERE TO MAKE A SIGNIFICANT LOSS IT COULD END UP AFFECTING ALL BUSINESSES WITHIN THE COLES GROUP..........................................................................................38 5.2 COMPETITIVE ADVANTAGE.....................................................................................38 COMPETITIVE ADVANTAGE IS THE FACTORS WHICH MAKE OUR BUSINESS MORE APPEALING TO OUR CONSUMERS OVER A DIRECT COMPETITOR. ‘MADE FOR MIZZI’ BELIEVES OUR STRONG BELIEF IN COMMUNICATION, WHETHER IT IS BETWEEN EMPLOYEE AND EMPLOYER, OR BETWEEN BUSINESS AND CONSUMER. BY UTILISING CUSTOMER INVOLVEMENT (KNOWING WHAT THEY WANT, WHEN THEY WANT) IT COULD DECREASE THE RISK OF OVERSTOCKING AND ALLOW THE BUSINESS TO ACCURATELY PLAN FOR A SUCCESSFUL FUTURE.............................................................................................................................39 5.3 INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY CAN TAKE MANY FORMS, IT CAN BE AN IDEA, AN INVENTION, A BRAND, BUT OVERALL IT IS THE PROPERTY INVENTED BY A PERSON. INTELLECTUAL PROPERTY IS VERY IMPORTANT IN BUSINESS AS IT IS WHAT SETS THEM APART FROM COMPETITORS, THEREFORE BUSINESSES SHOULD GO TO GREAT LENGTHS TO ENSURE COMPETITORS CAN NOT COPY THEIR INTELLECTUAL PROPERTY. (WIPO, 2010).......................................................40 CURRENTLY, ONLY THE BUSINESS NAME AND THE DESIGN OF KEY RINGS WILL HAVE TO BE REGISTERED (IF THEY ARE COPIED DESIGNS SUCH AS PACMAN ©). HOWEVER THIS WILL HAVE TO BE ANALYSED FURTHER WHEN THE BUSINESS IS ESTABLISHED AND WHEN CHANGES IN PRODUCT DESIGN OCCUR. IF WE DECIDE TO PRODUCE OUR OWN IPOD CASES – THE TRADEMARKS, DESIGNS AND BRANDINGS WILL NEED TO BE COPYRIGHTED TO THE ‘MADE FOR MIZZI’ ORGANISATION...........................................................................................40 August 2010 The Small Business Plan for Made for Mizzi Page 5
  6. 6. 6. MARKETING PLAN - SELLING YOUR PRODUCT/SERVICE....................................40 6.1 GOALS AND OBJECTIVES: .....................................................................................40 THE GOALS AND OBJECTIVES OF OUR MARKETING STRATEGY ARE TO REACH AS MANY POTENTIAL CUSTOMERS AS WE CAN. THROUGH MARKETING WE WANT TO ACHIEVE THE GOAL OF UNDERSTANDING OUR CUSTOMERS AND THEIR ROLE IN THE DECISION MAKING PROCESS IS CRUCIAL TO PROPERLY REACHING AND SUCCESSFULLY SERVING OUR IDENTIFIED TARGET. ............................................................................................................................................40 6.2 OVERVIEW OF MARKETING STRATEGIES: ..........................................................40 OUR STRATEGY TO ACCESS AND BE SUCCESSFUL IN OUR TARGET MARKET INCLUDES PAGES ON POPULAR NETWORKING SITES SUCH AS FACE BOOK. WE WILL CREATE ADVERTISEMENTS NOT ONLY FOR TELEVISION BUT ALSO ADDS ON THE POPULAR VIDEO SHARING SITE YOU TUBE. THIS NOW FEATURES MORE OPPORTUNITIES FOR BETTER ADVERTISEMENT TO REACH OUR DESIRED TARGET MARKET THAN EVER BEFORE. OUR ADVERTISING STRATEGY FOR POSTERS SUPPORTS THE DESIRED POSITIONING OF OUR BUSINESS BY BEING BIG, BOLD AND UNIQUE TO CATCH PEOPLE’S ATTENTION. BY PUTTING PICTURES OF OUR PRODUCTS AROUND OUR BUSINESS NAME WE ARE VISUALLY COMMUNICATING TO OUR POTENTIAL CUSTOMERS WHAT OUR BUSINESS IS ABOUT. WE FOCUSED ORE ON VISUAL COMMUNICATION RATHER THAN TEXT (WITH POSTERS) TO COMMUNICATE OUR PRODUCTS QUICKER WITH OUR TARGET MARKET. THIS METHOD WAS STRATEGICALLY PUT IN PLACE SO OUR MESSAGE IS DELIVERED SIMPLY TO ATTRACT CUSTOMERS TO LOOK AND TO RECEIVE THE MESSAGE FROM OUR BUSINESS QUICKLY AS OPPOSED TO THE SURROUNDING BUSINESS POSTERS. SALES PROMOTION METHODS WILL ALSO BE UTILIZED (DISCOUNT DAYS, PROMOTIONAL COUPONS, CONTESTS, FREE PRODUCTS ETC). ANOTHER IMPORTANT MARKETING STRATEGY IS BUILDING A POSITIVE PUBLIC IMAGE. WE HOPE TO ACHIEVE THIS BY DOING OUR BEST TO BE ECO – FRIENDLY AND SUPPORTING/ PROMOTING ENVIRONMENT AWARENESS WITH OUR BUSINESS. OTHER STRATEGIES INCLUDE BEING FAIR TO CUSTOMERS BY IMPLEMENTING A FAIR RETURN POLICY THIS WILL BUILD A GOOD NAME FOR OUR BUSINESS ALSO. AS WELL AS MAINTAIN A GOOD PR, PR REFERS TO PUBLIC RELATIONS. THIS IS THE PROCESS OF ESTABLISHING AND MAINTAINING A GOOD RELATIONSHIP WITH CUSTOMERS, BUSINESS TO DO THIS TO GET A GOOD REPUTATION FROM CUSTOMERS AND POTENTIAL CUSTOMERS WHICH CREATES A RELATIONSHIP BETWEEN THE TWO PARTIES. (WIKIPEDIA, 2010).....................................................41 6.3 PRODUCT: (PHYSICAL GOOD OR SERVICE)........................................................41 ADDITIONAL FEATURES TO THE PRODUCT ITSELF INCLUDE QUALITY, ACCESSORIES, INSTALLATION, INSTRUCTIONS, WARRANTY, PACKAGING AND BRANDING. THE QUALITY REFERS TO HOW RELIABLE OUR PRODUCTS WERE, FROM CUSTOMER FEED BACK IT WAS DETERMINED THAT OUR PRODUCTS WERE OF A SATISFACTORY AT OUR TRIAL RUN OF THE BUSINESS. THIS RESULT WAS TO BE EXPECTED AS THEY WERE MADE AS MORE OF AN EXPERIMENTATION FOR THE TRIAL RUN. HOWEVER ONCE WE OPEN OUR August 2010 The Small Business Plan for Made for Mizzi Page 6
  7. 7. BUSINESS QUALITY LEVELS WILL IMPROVE DRAMATICALLY MAINLY DUE TO IMPROVED OPERATIONS MANAGEMENT. WARRANTIES CAN NOT BE PUT IN PLACE FOR OUR PRODUCTS AS THEY ARE ALL UNDER $20. HOWEVER FAIR REFUND OPTIONS FOR FAULTY PRODUCTS WILL BE PUT IN PLACE. (E.G. BRING BACK PRODUCT WITHIN 30 DAYS FOR FULL REFUND OR REPLACEMENT IF FOUND TO BE FAULTY AS A RESULT OF THE MANUFACTURE.) IN OUR BUSINESS WE HAVE 3 DIFFERENT PRODUCT LINES, ONE FOR EACH DIFFERENT PRODUCT; IPOD CASES, KEY RINGS AND ERASERS. EACH PRODUCT LINE ALSO HAS A DIFFERENT IMPORTING METHOD; FOR THE IPOD CASES AND ERASERS WE ARE IMPORTING FROM EBAY, HOWEVER FOR THE KEY RING PLUSHIES MATERIALS WILL BE OUTSOURCED FROM FABRIC STORES SUCH AS SPOT LIGHT, WITH THE MATERIALS WE WILL THEN HAND MAKE THEM INTO THE DESIRED PRODUCT. PACKAGING IS THE FINAL CONCEPT THE PRODUCT WE HAVE TO DEAL WITH. PACKAGING NEEDS TO KEEP THE PRODUCT SAFE, IDENTIFY THE BUSINESS, CONTAIN THE PRODUCT AND ARE APPEALING TO CUSTOMERS. WE HAVE MADE OUR PACKAGING WHICH FEATURES OUR BRANDING NAME WITH A MESSAGE ‘THANKS FOR SHOPPING AT MIZZI’ (FIGURE 11). THIS SHOWS OUR CUSTOMERS WE APPRECIATE DOING BUSINESS WITH THEM AND MAKES OUR PACKAGING, BUSINESS AND PRODUCT APPEALING.. .42 6.4 PLACE: (REACHING THE TARGET MARKET): .....................................................42 6.5 PRICING: ....................................................................................................................44 6.6 OBJECTIVES, FLEXIBILITY, DISCOUNTS, ALLOWANCES...................................45 OUR BUSINESS USED A COMBINATION OF COST PLUS PRICING AND PHYSIOLOGICAL PRICING IN ORDER TO DETERMINE THE PRICES FOR OUR PRODUCTS. PHYSIOLOGICAL PRICING WAS WORKED OUT BY INTERVIEW POTENTIAL CUSTOMERS ON THEIR IDEA OF A ‘SUITABLE’ PRICE FOR OUR PRODUCTS. WITH THIS INFORMATION IN MIND WE WILL ALSO CALCULATE HOW MUCH WE NEED TO BREAK EVEN AND TO MAKE A SUITABLE PROFIT ALSO KNOWN AS COST PLUS PRICING. COST PLUS PRICING IS IMPORTANT FOR THE CONTINUATION AND EXPANSION OF OUR BUSINESS. WE BELIEVE THIS WILL BE AN EFFECTIVE STRATEGY AS WE WILL ENSURE WE ARE SELLING OUR PRODUCT AT THE RIGHT PRICE TO BREAK EVEN AND TO MAKE A PROFIT BUT ALSO BECAUSE WE ARE INCLUDING OUR CUSTOMERS ON BUSINESS DECISIONS IT WILL MAKE THEM FEEL APART OF THE DECISION MAKING PROCESS AND PERHAPS ENSURE MORE LOYALTY AND SATISFACTION FROM OUR CUSTOMERS. RELATIVE TO OUR COMPETITION, OUR PRICING STRATEGY IS TO HOLD STOCK WHICH DOES NOT COST MUCH TO IMPORT OR MAKE TO SELL AT THE LOWEST POSSIBLE PRICE TO GIVE US THE HIGHEST POSSIBLE REVENUE. TO HAVE A COMPETITIVE EDGE OVER COMPETITORS WITH PRICING AND TO ALSO MAINTAIN AND GROW OUR BUSINESS WITH REVENUE. WHEN DETERMINING PRICES WE ALSO REALISED THAT WE HAVE TO HAVE FLEXIBILITY PRODUCTS PRICE TO CHANGE FOR ITS STAGES THROUGH ITS LIFE CYCLE AND FOR DISCOUNTS AND PROMOTIONS. DISCOUNTS AND ALLOWANCES WILL BE USED IN THE EVENTS OF SALE PROMOTIONS THIS IS DISCUSSED IN SECTION 6.2 OF THIS REPORT...........................................................45 6.7 PROMOTION: .............................................................................................................45 August 2010 The Small Business Plan for Made for Mizzi Page 7
  8. 8. ACTIVITIES UNDERTAKEN BY THE BUSINESS TO FAMILIARISE AND ADVERTISE PRODUCTS IS KNOWN AS PROMOTION. PROMOTION DIFFERS FROM ADVERTISING AS IT IS THE BROADER TERM TO INCLUDE ALL ACTIVATES TO MAKE A PRODUCT KNOWN (ABOUT.COM, 2010). ....................................................45 6.8 TRADING HOURS.....................................................................................................46 SUITABLE TRADING HOURS FOR THE BUSINESS WOULD BE 9 – 5 DURING THE WEEK, 8 – 3 ON SATURDAYS AND CLOSED ON SUNDAYS. AT THIS CURRENT TIME ‘MADE FOR MIZZI’ IS RUN BY THE 3 OWNERS IN EVERY ASPECT, NO OTHER EMPLOYEES BELONG TO THE BUSINESS, HOWEVER IN THE EVENT OF EXPANSION SALES STAFF WILL BE EMPLOYED TO RUN OTHER STORES, IN THIS EVENT TRADING HOURS MAY BE EXPANDED..................................................46 6.9 COMMENT ON OTHER FACTORS REGARDING YOUR MARKETING STRATEGIES ...................................................................................................................46 6.10 EXPORT INTENTIONS.............................................................................................46 E-BUSINESS WOULD ALSO BE A GOOD OPTION FOR MADE FOR MIZZI, AS IT WOULD REDUCE RUNNING COSTS AND INCREASE MARKET EXPOSURE. THIS OPTION WOULD BE THE MOST VIABLE DEPENDING ON THE AMOUNT AND TYPES OF PRODUCTS WE WOULD SELL. PARTNERING WITH ANOTHER ORGANISATION WOULD BE ANOTHER VIABLE OPTION..........................................47 7. OPERATIONAL PLAN .................................................................................................47 THE VARIOUS ASPECTS OF MADE FOR MIZZI’S OPERATION PLAN HAVE BEEN ANALYSED IN ACCORDANCE TO THE RETAIL INDUSTRY SECTOR, AS SEEN IN APPENDIX.........................................................................................................................47 7.1 PREMISES & CAPITAL..............................................................................................47 EQUIPMENT......................................................................................................................48 7.2 ADDITIONAL COSTS..................................................................................................49 STORAGE..........................................................................................................................49 STORAGE IS REQUIRED TO SAFELY MAINTAIN PRODUCTS IN THE TRANSITION PROCESS FROM SUPPLIER TO CONSUMER. THIS HAS THE POTENTIAL TO OCCUR EXTRA COSTS, THEREFORE INITIALLY STORAGE WILL BE AT THE PREMISES OF THE BUSINESS. HOWEVER AS THE BUSINESS GROWS A WAREHOUSE MAY BE REQUIRED FOR HOLDING STOCK. THE MAIN AIM FOR INITIAL SET UP IS TO MINIMISE STORAGE COSTS AS WE EXPAND INVENTORY MANAGEMENT SYSTEM WILL BE IMPLEMENTED TO REDUCE THESE EXTRA COSTS...............................................................................................................................49 LEASING/PURCHASING..................................................................................................49 August 2010 The Small Business Plan for Made for Mizzi Page 8
  9. 9. TO OPERATE A BUSINESS LEGALLY ONE NEEDS TO MEET ALL THE LAWS FOR OPERATING A BUSINESS [2]. THESE INCLUDE:.........................................................49 AUSTRALIAN BUSINESS NUMBER...............................................................................49 CONTRACTS – LEASE, EMPLOYEES ETC....................................................................49 COMPLIANCE WITH AUSTRALIAN TAXATION OFFICE AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION.........................................................49 COMPLIANCE WITH THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) PROMOTES COMPETITION AND FAIR TRADE FOR CONSUMERS, BUSINESSES AND THE COMMUNITY. IT ALSO REGULATES NATIONAL INFRASTRUCTURE SERVICES [3].............................................................49 SOME OF THE LEGAL AND POLITICAL FACTORS THAT CAN AFFECT ‘MADE FOR MIZZI’ INCLUDE COPYRIGHT INFRINGEMENTS. THEREFORE ‘MADE FOR MIZZI’ WILL REQUIRE PERMITS TO RECREATE THESE CARICATURES (PACMAN, GHOSTS) AND WOULD PROBABLY BE REQUIRED TO PAY ROYALTIES (A PERCENTAGE OF PROFIT). IF THIS IS NOT STRICTLY FOLLOWED, THE BUSINESS COULD FACE LEGAL ISSUES AND INFRINGEMENTS. ..............................................49 ANOTHER ISSUE IS THE RELIABILITY OF OVERSEAS SUPPLIERS AS THEY ARE LESS PREDICTABLE AND CANNOT BE MONITORED – THEREFORE AN INCREASED LEVEL OF FINANCIAL RISK (LEGAL CONTRACT IS REQUIRED).......49 ADDITIONAL COSTS WILL BE INCURRED THROUGH BUSINESS AND STOCK INSURANCE, TAXATION AND THE GOOD AND SERVICES TAX (AUS = 10%).........49 7.3 HUMAN RESOURCE MANAGEMENT ......................................................................49 HUMAN RESOURCE MANAGEMENT IS THE MANAGEMENT OF THE EMPLOYEE RELATIONSHIP IT COVERS ESTABLISHING, MAINTAINING AND TERMINATING EMPLOYMENT. THE FUNCTION OF HRM INVOLVES PLANNING, ORGANISING, LEADING AND CONTROLLING THE NEEDS OF AN ORGANISATION.......................49 HOW MANY STAFF..........................................................................................................50 STAFF NUMBERS WILL BE DETERMINED AS THE BUSINESS GROWS. HOWEVER FOR THE MOMENT, IN REGARDS TO THE SIZE OF THE BUSINESS IT IS MANAGEABLE BY THE 3 OWNERS...............................................................................50 JOB DESCRIPTION..........................................................................................................50 JOB SKILLS REQUIRED..................................................................................................50 INITIALLY, NO EMPLOYEES WILL BE HIRED, HOWEVER AS TIME PASSES – THE POSSIBILITY WILL OCCUR. THE MAJORITY OF ASSISTANCE REQUIRED WOULD BE IN THE PRODUCTION SECTOR (KEY RINGS). THIS REQUIRES SPECIALLY August 2010 The Small Business Plan for Made for Mizzi Page 9
  10. 10. SKILLED EMPLOYEES, HOWEVER, THE TYPE OF EMPLOYMENT (DULL-TIME, PART-TIME) THEY WOULD RECEIVE WOULD DEPEND ENTIRELY ON PRODUCT DEMAND (LOWER DEMAND = LOWER EMPLOYMENT NUMBERS). IN THE FUTURE, IF THE BUSINESS IS A SUCCESS – EXTRA ASSISTANCE IN THE FINANCIAL AND MARKETING SIDE WILL BE REQUIRED. ALSO NECESSARY FOR AN ONLINE BUSINESS IS AN IT EXPERT – ABLE TO CREATE AND EFFICIENTLY RUN AN ONLINE WEBSITE.............................................................................................50 RECRUITMENT.................................................................................................................50 RECRUITMENT WILL BE ORGANISED THROUGH ADVERTISEMENT – INTERNALLY OR WITH A RECRUITMENT AGENCY. ALL APPLICANTS WOULD BE PROPERLY PROCESSED AND INTERVIEWED AND A DECISION WOULD BE MADE..................50 TRAINING AND DEVELOPMENT....................................................................................50 WAGES AND OVERHEADS.............................................................................................50 WAGES WOULD BE PAID ACCORDING TO THE QUEENSLAND GOVERNMENT WAGES (RETAIL SECTOR) INFORMATION. DEPENDING ON TYPE, LEGAL ADVICE WOULD BE TAKEN TO CONSTRUCT THE CONTRACT...............................................50 IN REGARDS TO WORKFORCE, WE PLAN ON HAVING A FLEXIBLE WORKFORCE, WHERE EMPLOYEES ARE MULTI-SKILLED AND ARE ABLE TO WORK IN A BROAD RANGE OF ENVIRONMENTS – WITH LIMITED TO NO SUPERVISION. THIS IDEAL EMPLOYEE WOULD BE AN ASSET TO THE ORGANISATION AS IT WOULD CREATE A FLEXIBLE EMPLOYEE WHO IS ABLE TO WORK IN AN PART OF THE BUSINESS WHEN NEEDED – IT WILL ENLARGE THE BUSINESS’S CAPABILITIES. ............................................................................................................................................51 WORKPLACE HEALTH AND SAFETY WILL BE FOLLOWED AND MAINTAINED THROUGH REGULAR INSPECTION AND UPDATING OF NEW LEGISLATION.........51 7.4 POLICIES AND PROCEDURES MANUAL................................................................51 8. FINANCIAL PLAN -YOUR INVESTMENT & EXPECTED TURNOVER & PROFIT - CHAN.................................................................................................................................53 FINANCE IS ULTIMATELY UP TO THE FINANCE DEPARTMENT TO ACCESS THE VIABILITY OF A PROJECT AND ITS ABILITY TO ACHIEVE THE OBJECTIVES OF THE BUSINESS. A SOUND FINANCIAL STRATEGY REQUIRED THE MANAGER TO MAKE DECISIONS ABOUT THE TYPES OF FINANCE. THE WRONG TYPES OF FINANCE CAN BE VERY COSTLY TO THE BUSINESS, WHILE A POOR FINANCE STRATEGY CAN RESULT IN OVER- OR UNDER-CAPITALISATION..........................53 THE FIRST TASK FOR A NEW BUSINESS IS TO WORK OUT HOW MUCH MONEY IS NEED TO START THE BUSINESS, AND WHETHER THE FUNDS AND SAVING IS SUFFICIENT OR NEED TO OBTAIN FINANCE. THE TYPE OF START UP COST WILL DIFFER DEPENDING ON THE TYPE OF BUSINESS, SUCH AS THE COST OF STARTING A NEW BUSINESS IS DIFFERENT TO BUYING AN EXISTING BUSINESS August 2010 The Small Business Plan for Made for Mizzi Page 10
  11. 11. OR BUY A FRANCHISE. AS “MADE FOR MIZZI” IS A SCHOOL PROJECT AND IS RUNNING UNDER THE SCHOOL ENVIRONMENT, THEREFORE THERE ARE NO START-UP COST AND EXTRA FEES CHARGED. HOWEVER, SOME EXPENSES WILL INCUR WHEN RUNNING THE BUSINESS. FOR EXAMPLE, EXPENSES SUCH AS LEGAL, ACCOUNTING OR CONSULTING FEES WILL NOT OCCUR BECAUSE ONCE AGAIN, THIS IS A SCHOOL PROJECT AND THE BUSINESS IS ONLY RUNNING FOR THREE DAYS. HOWEVER OTHER EXPENSES SUCH AS INVENTORIES EXPENSE WILL INCUR WHEN PURCHASING GOODS FOR THE BUSINESS. THE THREE TABLES AND CALCULATIONS BELOW SHOW THE QUANTITY, THE ORIGINAL COST PER UNIT AND THE APPROXIMATE COST TO START UP THE BUSINESS.............................................................................................53 = ($170 – $70.05/$170) X 100.........................................................................................54 = 0.5879 X 100.................................................................................................................54 = (($20 – $12.53)/$20) X 100..........................................................................................54 = 0.3735 X 100.................................................................................................................54 = 37%...............................................................................................................................54 = (($21.5 – $17)/$21.5) X 100........................................................................................54 = 0.209302 X 100....................................................................................................54 .........................................................................................................................................54 OVERALL GROSS PROFIT MARGIN = (($211.5 – $115.68)/ $211.5) X 100 ............................................................................................................................................54 = 0.453049.......................................................................................................................54 = 45%...............................................................................................................................54 BREAK-EVEN POINT = TOTAL OVERHEADS/ GROSS PROFIT MARGIN .56 BREAKEVEN POINT OF IPOD CASES = $81.15/ 59% ..................................56 = $137.54...................................................................................................56 BREAKEVEN POINT OF KAWAII ERASERS = $17.53/ 37% .......................................56 = $47.35............................................................................................56 BREAKEVEN POINT OF KEY RINGS = $17/21% ..........................................................56 = $80.95......................................................................................................56 August 2010 The Small Business Plan for Made for Mizzi Page 11
  12. 12. BREAKEVEN POINT OF THE BUSINESS = $115.68/ 45%............................................56 = $257.07...........................................................................56 PRICE IS WHAT IS CHARGED BY THE SUPPLIER TO THE CONSUMER AND IT IS ONE THE MOST IMPORTANT ASPECTS OF THE MARKING MIX. PRICE OFTEN IMPACT ON THE AMOUNT OF REVENUE GAINED FROM THE SALE OF PRICE SENSITIVE PRODUCTS OR SERVICES, AND MAY THEREFORE DIRECTLY IMPACT ON THE ULTIMATE SURVIVAL OF THE BUSINESS THE PRICING STRATEGY CONSISTS OF SETTING AN INITIAL PRICE FOR THE PRODUCTS, AND THEN TAKES DETAILED RECORDS OF HOW THE PRODUCT PERFORMS AT THE GIVEN PRICE, AND REPRICES THE PRODUCT BASE ON THE RESULTS. IF HIGHER PROFIT IS MADE, THE SELLING PRICE SHOULD EITHER STAY THE SAME OR INCREASE. IF LOWER PROFIT IS MADE THEN OBVIOUSLY THE SELLING PRICE NEEDS TO BE DECREASE. ............................................................................................56 DURING THE ENTERPRISE WEEK, THE PRICES OF THE IPOD CASES REMAIN THE SAME ALL TIME. HOWEVER, BASED ON THE PRODUCT PERFORMANCE, THE PRICE OF THE KAWAII ERASERS CHANGED FROM $5.00 EACH DOWN TO $2.50 (2 ERASERS FOR $5.00). ALSO THE PRICE OF THE KEY RING CHANGED FROM $4.00 DOWN TO $3.50. THESE CHANGES HAD A GREAT EFFECT ON THE ESTIMATE PROFIT AND LOSS CALCULATION THAT WAS CALCULATED BEFORE THE ENTERPRISE WEEK. IN FUTURE, THESE CHANGES NEED TO BE TO TAKEN INTO CONSIDERATIONS BEFORE MAKING ANY PRICES TO AVOID THE LOSS IN BUSINESS REVENUE......................................................................................................57 FUTURE DATA CALCULATIONS (APPROXIMATE PREDICITONS)............................57 APPENDIX 1 - OPERATIONS PLANNING CHECKLIST.................................................58 OPERATIONS PLANNING CHECKLIST..........................................................................58 MANUFACTURING INDUSTRY........................................................................................58 RETAIL INDUSTRY...........................................................................................................58 SERVICE INDUSTRY........................................................................................................58 CONTRACTING.................................................................................................................58 FIXED ASSETS.................................................................................................................58 LOCATION OF EXISTING/SUITABLE SITE....................................................................58 BUILDINGS/ IMPROVEMENTS REQUIRED....................................................................58 PLANT/EQUIPMENT REQUIRED.....................................................................................58 (LEASING OR PURCHASING?).......................................................................................58 August 2010 The Small Business Plan for Made for Mizzi Page 12
  13. 13. FIXTURES/FITTINGS REQUIRED....................................................................................58 (LEASING OR PURCHASING?).......................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 INVENTORY......................................................................................................................58 RANGE OF STOCK REQUIRED......................................................................................58 SOURCES(S) OF SUPPLY...............................................................................................58 METHOD & FREQUENCY OF PURCHASING.................................................................58 STOCK VALUATION METHOD........................................................................................58 STORAGE & MOVEMENT OF STOCK............................................................................58 STORAGE FACILITIES REQUIRED.................................................................................58 *..........................................................................................................................................58 August 2010 The Small Business Plan for Made for Mizzi Page 13
  14. 14. *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 August 2010 The Small Business Plan for Made for Mizzi Page 14
  15. 15. ORGANISATION...............................................................................................................58 FLOOR PLAN....................................................................................................................58 FACILITY LAYOUT...........................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 LABOUR............................................................................................................................58 MANPOWER NEEDED.....................................................................................................58 TECHNICAL KNOW HOW REQUIRED............................................................................58 AVAILABILITY/DEMAND OF SKILLED LABOUR..........................................................58 TRAINING REQUIRED......................................................................................................58 WAGES APPLICABLE......................................................................................................58 HOURS OF OPERATION..................................................................................................58 SHIFTWORK......................................................................................................................58 MANAGEMENT CONTROL..............................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 August 2010 The Small Business Plan for Made for Mizzi Page 15
  16. 16. *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 *..........................................................................................................................................58 PRODUCTION...................................................................................................................59 METHOD OF PRODUCTION............................................................................................59 (A) CONTINUOUS (B) ASSEMBLY..............................................................................59 (C) BATCH PROCESS (D) JOBBING..........................................................................59 SCHEDULING OF WORKFLOW......................................................................................59 MANUFACTURE OF SUB-CONTRACT DECISIONS......................................................59 PRODUCTION LEAD TIMES............................................................................................59 ANY BOTTLENECKS EXPECTED...................................................................................59 QUALITY CONTROL, INSPECTIONS. ETC.....................................................................59 STANDARDS APPLICABLE............................................................................................59 MAINTENANCE AND RELIABILITY OF..........................................................................59 PLANT/EQUIPMENT.......................................................................................................59 DELIVERY AND/OR DISTRIBUTION...............................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 August 2010 The Small Business Plan for Made for Mizzi Page 16
  17. 17. *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 *..........................................................................................................................................59 OPERATIONS PLANNING CHECKLIST..........................................................................60 MANUFACTURING INDUSTRY........................................................................................60 RETAIL INDUSTRY...........................................................................................................60 SERVICE INDUSTRY........................................................................................................60 CONTRACTING.................................................................................................................60 OTHER DECISIONS..........................................................................................................60 OFFICE EQUIPMENT/INFO. SYSTEMS REQUIRED......................................................60 MERCHANDISING (SHOP-FRONT, IN STORE DISPLAYS, POINT-OF-SALE ETC.)...60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 August 2010 The Small Business Plan for Made for Mizzi Page 17
  18. 18. *..........................................................................................................................................60 EXTERNAL ADVISORY BODIES.....................................................................................60 QLD DEPT. OF INDUSTRY DEVELOPMENT..................................................................60 COMMONWEALTH DEPT. OF INDUSTRY, ....................................................................60 TECHNOLOGY & COMMERCE......................................................................................60 NATIONAL INDUSTRY EXTENSION SERVICE..............................................................60 (NIES)...............................................................................................................................60 STANDARDS ASSN. OF AUSTRALIA.............................................................................60 AUST. ORGANISATION FOR QUALITY CONTROL.......................................................60 AUSTRALIA FOR QUALITY ORGANISATION................................................................60 INDUSTRIAL DESIGN COUNCIL.....................................................................................60 INDUSTRY TRADE ASSOCIATION.................................................................................60 INDUSTRY TRAINING COMMITTEES.............................................................................60 DISTRIBUTORS, AGENTS & BUYING GROUPS............................................................60 PROFESSIONAL CONSULTANTS .................................................................................60 (CONTACTS AVAILABLE THROUGH SBDC)..............................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 August 2010 The Small Business Plan for Made for Mizzi Page 18
  19. 19. *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 *..........................................................................................................................................60 APPENDIX 3: TABLES OF COST OF GOODS SOLD (DURING ENTERPRISE WEEK) ............................................................................................................................................60 IPOD TOUCH CASES.......................................................................................................60 IPOD NANO CASES.........................................................................................................61 August 2010 The Small Business Plan for Made for Mizzi Page 19
  20. 20. KAWAII ERASERS............................................................................................................61 PRODUCT NAME..............................................................................................................61 QUANTITY.........................................................................................................................61 ORIGINAL PRICE PER UNIT............................................................................................61 TOTAL ..............................................................................................................................61 1 SET OF COOKIES ERASERS (6 PIECES)...................................................................61 6..........................................................................................................................................61 $1.46..................................................................................................................................61 $8.77..................................................................................................................................61 1 SET OF CAKES ERASERS (6 PIECES).......................................................................61 6..........................................................................................................................................61 $1.46..................................................................................................................................61 $8.77..................................................................................................................................61 TOTAL...............................................................................................................................61 12........................................................................................................................................61 $17.53................................................................................................................................61 1. Introduction This business report will cover the Marketing, Operational and financial planning’s of ‘Made for Mizzi’ as well as Market research and Competitive analysis. Based on the following findings and data analysis, an accurate future out look for the organisation can be made. Made for Mizzi has a business ownership that consists of an equal relationship between Andrea Mizzi, Sam Messmer and Chan Richardson. August 2010 The Small Business Plan for Made for Mizzi Page 20
  21. 21. The product/service we will be offering are hand made caricature plush key rings, visually appealing Japanese erasers and unique imported IPod cases (all at a reasonable price). Our goals are to have a positive and popular reputation within the community for selling quality products. We also aim to continual increase the bottom line of our organisation, whilst maintaining a strong relationship with our consumer base. Eventually ‘Made for Mizzi’ plans to expand the business to the global community through an online market (E-business). August 2010 The Small Business Plan for Made for Mizzi Page 21
  22. 22. BUSINESS SUMMARY 2.1 Background and Description of Business: Made for Mizzi, is a new, exciting retail business located in the Cairns CBD. The owners of this business are 3 young its main products are IPod cases however the business is also selling Japanese erasers and key rings. The business would like to focus on selling iPod cases therefore our vision would be to make a name for selling good quality iPod cases and increase our range of cases. Our mission statement provides our business with a direction in regards to goals and aims. (Wikipedia, 2010) ‘We aim to provide products to consumers that are unique and different, something that stands out and is visually appealing, whilst maintaining an affordable price.’ - Made for Mizzi mission statement A mission statement is important for a business as it formally sums up the overall objectives of a business to consumers and also employees. 2.2 Current business/economic position and future outlook: During the trial at business enterprise week, Made for Mizzi resulted in the highest percentage of profit (refer to marketing plan). The main customers our business attracts are people who own iPods (for the moment nano, iPhone, or iTouch). Through research we have discovered that we are going to have a large customer sector as half a million teenage own a portable music device, with iPods being the most popular. Because of our instant success we are able to plan for our businesses future which includes expanding into the global market. Our other products are also appealing to the older market of consumers who wish to purchase something different and ‘unique’ (putting a personal statement at office/school/work). The customer profile analysis can be found in the marketing plan of this business report (page??). 2.3 Marketing Plan: 2.3.1 An assessment of the market potential, market share and competition including marketing strategies for next year: A marketing plans function is to identify the needs of consumers and to classify stakeholders and external factors which could impact on the business’s operation. It highlights the aims and objectives of the business’s marketing ideas for either their service, brand or product line. It also assesses the business’s market potential, market share, competition and marketing strategies for the next year. (Mylonas, A. 2006) August 2010 The Small Business Plan for Made for Mizzi Page 22
  23. 23. It is important to find out our market potential to determine how much sales revenue we will receive in comparison to our competitors. Market potential also helps us in acquiring information on our market share, which is the sales volume of our brand and product in comparison to our competitors. Our market share for ‘Made for Mizzi’ during our trial run of the business, was the largest share in the merchandising business sector with a market segment of 17% (see figure 1 below). This shows that our market potential when establishing our business permanently has the capacity to achieve in the retail sector, if we can identify who our target market is. Our strategies to improve these figures will be to implement more advertising and promotional efforts, focus on new ways to communicate to our target market and how to expand our market to new target groups by expanding into more popular areas such as shopping centres where the target market is more abundant. These marketing ideas for ‘Made for Mizzi’ will be defined, determined and discussed throughout this section of our business plan for our expansion locally, nationally and internationally. 2.3.2 Market size and your share by segment: Now (3 day trial): Made for Mizzi's profit compared to other retail stores A B C L 5% A 9% D J 1% 8% K B 7% E I 13% C 9% F Made for Mizzi H 9% D 6% E 9% H Made for Mizzi 17% F 7% I J K L Figure 1 – Made for Mizzi’s profit contributions in comparison to other retail stores at business enterprise week 2.4 Operational Plan: 2.4.1 Product/service and or production uniqueness and differentiation: The success of our business can be contributed to its uniqueness and attractive personal statement it gives to our consumers. Our products such as iPod cases are closely linked with popular technology of these current times. Therefore they are extremely popular with its August 2010 The Small Business Plan for Made for Mizzi Page 23
  24. 24. consumers. It could be said that consumers want a product that contradicts the organised, straightforward approach of office and school work. By purchasing our product, they are personalising themselves and enhancing their ‘individuality’. 2.4.2 The management team (experience, talent, and strengths): The management team consists of Andrea Mizzi, Chan Richardson and Sam Messmer. Combining our knowledge of the various business aspects, we are able to create an efficient and effective business structure. 2.5 Financial Plan: Goods were sold to 53 students in Cairns State High school out of approximately 1400 students, which made up an approximate of 4% of sales out of the whole school population. In future, if “Made for Mizzi” is to expand into a small business that is running in Cairns only, with the population of approximately 142 001 people, there will be roughly 5860 people who will be purchasing our products. If we were to increase the numbers of our products and provided more choices for the consumers such as more iPod Nano cases for the latest version or increase the amount of the popular stock, the sales percentage could have been increase up to 10% of sales. In future we will be focusing on selling such as cover cases, screen protectors and phone charm accessories for electronic devices because during the school, they were the most popular products. The electronic figures includes: • Ipod products: cases and screen protector for iPod touch, iPod Nanos and Iphone; engrave the owner’s name of the ipods and maybe laptop bags. • Other phones accessories such as screen protectors and cases for the latest touch phones • Cases can be designed and customised by the consumers • Key rings with a wider range appearances and colours. The tables below demonstrate the cost to establish “Made for Mizzi” and the cost of goods sold. The publishing fees will only be paid at the start when establishing the business. This fee will not be included into the expenses later on. Particular Cost of Expenses Publishing fees $5,000.00 Other additional expenses $1,000.00 Rent per month $1,000.00 Phone and electricity per month $1,000.00 Total $8,000.00 August 2010 The Small Business Plan for Made for Mizzi Page 24
  25. 25. Monthly expenses Particular Monthly Expenses Other additional expenses $1,000.00 Rent per month $1,000.00 Phone and electricity per month $1000.00 Total $3,000.00 Cost of goods sold Original Selling Products Cost Quantity Total Price Revenue Ipod touch $4.15 200 $830.00 20 4000 Ipod Nano $4.00 200 $800.00 10 2000 key rings $1.10 200 $220.00 5 1000 Machinery $1,850.00 7000 Profit $5,150.00 Net profit = $5,150.00 – 3,000 = $2,150 Projected financial results: Sales: $ 5,150.00 Profit: $3000.00 Gross Profit: $3000.00 If this Business Plan is to be used as an application for funding: Amount contributed by principal(s) $13,000 Additional funds required $5000 TOTAL FUNDS $18,000 2.5.2 Other comments: The calculations above are just an estimate of possible cost to establish “Made for Mizzi”. It has not included the activities such as engraving names on iPod and the cost for consumer to design their on iPod cover designs. If there is no profit made at the end of the month, the business needs to find another suppliers will cheaper goods and maybe decrease the cost of a particular product base on its performance of the month. Business Profile 3.1 Business Description: 3.1.1 Details your business (its name, location and purpose) and your Mission Statement August 2010 The Small Business Plan for Made for Mizzi Page 25
  26. 26. ‘Made for Mizzi’ is a merchandising business established and trialled for three continuous days on Business Enterprise Week. During this trial we were located in the middle of the south wall (near the epicentre of Enterprise Week). However after our successful trial we plan to establish the business in a more permanent location within the Cairns CBD our new location was discussed in section 6.5 of this report. The purpose of our organisation is to sell handmade caricature plush key rings and visually appealing Japanese erasers, however we will focus on unique imported iPod cases – all at a reasonable price. As mentioned in section 3.1 Our unique selling proposition is: ‘We aim to provide products to consumers that are unique and different, something that stands out and is visually appealing, whilst maintaining an affordable price.’ 3.1.2 Legal Structure of Business (tick as applicable): Sole Trader Partnership Limited Liability Co Trust Limited Liability Partnership Other (please indicate type) 3.1.3 Legal Structure There are many different legal structures which a business can choose, in deciding on a particular legal structure the following factors need to be considered; taxation, liability, risk and control, continuity of existence, transferability, expense and formality. (QuickMBA, 2010) Our business ‘Made for Mizzi’ chose a 3 –way partnership. A partnership is a legal structure consisting of 2 or more participants and is he most common for small business set up. Our reason for choosing this structure include that it is simple, it is financially and legally flexible, able to share a work load and make more effective decisions cooperatively. The contract is also binding and partnerships do not pay tax though they must still lodge a tax return. 3.1.4 Industry Knowledge and Experience / Skills of Key Personnel: Name Position Knowledge & Experience / Skills Andrea Mizzi Marketing Manager Techno-savvy, sales strategies Chan Richardson Finance Manager accounting Sam Messmer Operations Manager Hands-on approach, mediator August 2010 The Small Business Plan for Made for Mizzi Page 26
  27. 27. 3.1.5 Location and Description of Premises: Our trial run of our business was held at Cairns State High school, we were located along the wall opposite to the hall (figure 2). O R T E H T E A R I L F HALL O S BULL RIDE O T D O R & E S FOOD STALL MADE FOR MIZZI ENTRANCE Figure 2 – Outline of our location at business enterprise week The premises consisted of a simple foldable table – no lease and no electricity was used, therefore no running costs were incurred. However, if ‘Made for Mizzi’ was to expand into a more permanent premises such as a shop front in a popular shopping centre (cairns central, CBD, cairns square). The running costs incurred per year would be approximately $60 000 for the lease of the premises alone (Business Essentials, 2010). Costs that would also need to be taken into account include insurance, electricity, taxation, permit/licence costs, import/export licence costs, ABN etc. ore information about location is discussed in section 6.5 3.2 SWOT Analysis Strengths The strengths of our business ‘Made for Mizzi’, outlined in the earlier SWOT analysis; are offering a fresh and unique product to our consumers (this was the main reason for our success during our trial period), constant profits even though changes in product prices were made, some of our products can only be bought online - our business gives our consumers the option to buy these items in a real life situation and reduce their risk of fraud, our products were popular amongst our target market, established our customer base through advertising our business, products weren’t bulky therefore were easy and low maintenance to store, materials were relatively cheap – especially when bought in bulk will increate cost effectiveness. August 2010 The Small Business Plan for Made for Mizzi Page 27
  28. 28. Weaknesses Our main weaknesses were that it was very time consuming to hand make the key rings, delivery times was extremely unreliable and suppliers were not dependable. This caused customer dissatisfaction and loss of loyalty as the products they paid for were not available on the date they were promised. Technological advances (IPod) caused depreciation in our goods sold (no longer used by customers), causing a loss in finances. Because we didn’t manufacture all of the products ourselves (IPod cases and erasers) the product availability was limited. These products also required a large sum of capital to successfully run the business (purchasing stock). Opportunities Potential opportunities for Made for Mizzi include expansion into bulk buying products such as IPod cases, erasers and materials required for the key rings. This would reduce costs and allow us to compete with the more established organisations. Another viable option would be manufacture the products ourselves, creating more independence and reliability increasing customer base and satisfaction. Due to the small range of stock we would sell ‘Made for Mizzi’ would have to consider merging with another similar organisation to maximise bulk buying efforts. As bulk buying will increase our customer base it will establish our business name and products, therefore creating opportunities to expand nationally and international through E-business. Threats Threats that could impact on our business include a loss of customer base through established competitors selling similar products. Also our established competitors have more finance options to compete with smaller business such as Made for Mizzi. Their established name also poses a threat to new smaller businesses as they would already have a well established customer base. The relationship between suppliers and importers also poses threats through banking security. Furthermore trustworthy suppliers must be sought and maintained or stock will not arrive on schedule and financial difficulties may occur. How will you maximise strengths, minimise weaknesses, capitalise on opportunities and overcome threats? For a successful business venture, especially our business segment, continual market research is required. By being able to better understand consumers and their needs and wants, the business is able to make relatively accurate purchasing trends – therefore assisting to maximise profitability. Weaknesses and threats can be analysed and various solutions and improvements to the organisation can be made, therefore decreasing weaknesses and threats, and increasing strengths and opportunities. 3.2.6 Business Goals Short Term August 2010 The Small Business Plan for Made for Mizzi Page 28
  29. 29. Short term goals, are the goals the business wishes to achieve in a year or less, for our business this includes setting-up small cost effective shop front and introduce it to the market through continual advertisement and exposure within the target market (music events, television, community events etc). The creation of a reputation will help to increase sales and in turn, profitability. Initially costs of setup will outweigh sales; however it is predicted that over time the setup debt will decrease. These initial costs would come from all three partners (probably equally) or from a bank loan (such as the Commonwealth bank ‘small business loan’ scheme). We would also want to improve the relationship between suppliers and the business – attempt to increase the delivery speed and reliability, or start to look elsewhere for suppliers. Long Term Long term goals are those that may become out of focused as they are further into the future, 3 to 5 years. However it is important to have these goals to guide the business through its expansion. (Weinstein, C, 2001) Our long term goals are to keep at least a 50% profit margin will help to ensure that operating costs can be covered (currently the products were marked up approximately 50-150%). In the future, expansion for our business will be done by setting up an online store, therefore dramatically reducing operating costs (only a warehouse and limited staff would be required). Depending on sales and profitability, an increase in staff could be analysed. Another option to reduce unreliability of overseas suppliers could be to produce iPod cases ourselves. If it was cost effective, it could also be possible to manufacture in Australia – therefore every aspect of the product could be personally chosen by us, and by being ‘Australian made’ would also improve the reputation of the business and increase sales. Another possibility could be to introduce an increased range of products (depending on what the market research indicates). 3.3 Personal Goals Personally, we would prefer to work part-time in the business, as we all plan to go to University. However, a possibility would be to defer for 1-2 years until the business is steady and employees can be hired. Life would be relatively time constrained, but that is not a new issue for us. The business owners are all young and soon to become completely independent, therefore family commitments would be assumed to dramatically reduce. MARKET ANALYSIS - The Market & Your Position in It Identifies, describes and analyses your target market and market share. 4.1 Describe your Products and or Services: Products and services are what a business offers to its consumers to produce a profit and grow the business. Products need to be appealing to the target market and can fall into one of the following categories; 1. Consumer products 2. Business products August 2010 The Small Business Plan for Made for Mizzi Page 29
  30. 30. Consumer products are products that have already been assembled such as convenience products, shopping products, specialty products and much more. Business products however are industrial products and usually used in the production of making consumer products by other businesses these include raw materials, professional services, instillation and more. Our business ‘Made for Mizzi’ will be offering shopping products which is apart of the consumer products category. Shopping products are items which a consumer will usually analyse and compare with other competitors for cheaper price or higher quality. Line, breadth and depth all need to be considered when introducing products into the business. The product line groups products by usage, target group or price range. Breadth is used to account for the number of product lines within the product mix. Within our business we have decided to categorize our product lines through usage, creating a breadth of 3 product lines which are; 1. IPod cases 2. Japanese Erasers 3. Plushie key rings Within each product line contains different variations of that product, this is what is referred to as the product depth. . (Mylonas, 2007) Figure 3 explains this concept visually. Figure 3 – Product lines, breadth and depth The IPod’s have 2 main types Soft (silicon) cases and hard cases. Japanese Erasers have come in the shapes of foods (e.g. Milk shakes, pizza’s etc.). Our key ring’s come in different identities, which our target market can familiarise with. Such as Pac man and Game boys. Products are shown in figure 4 below; Figure 4 – products offered by Made for Mizzi August 2010 The Small Business Plan for Made for Mizzi Page 30
  31. 31. 4.2 From your customers point of view what are you selling? Products are far more than an item placed for sale; instead they also consist of other intangible and tangible factors. Tangible factors include additional features, lifespan/cycle, its concept and context. Intangible factors of a product include quality, prestige, convenience and reputation. (Mylonas, 2007) Improving these intangible factors is what will draw our customers to buy our product over our competitors. Therefore we have positioned our customers to view what we are selling as more than IPod cases, erasers and key rings instead what we are really selling to them is unique and quality products, a more personalized consumer experience as well as our goals to maintain an Eco friendly business as much as possible. Therefore creating customer satisfaction and building customer loyalty. Our intangible factors will set us apart from our competitors as our consumers will be more likely to buy from our store than a competitor as they know they are buying products which will help support a business which has a good reputation for quality products as well as the global community. 4.3 Are there any external (political, economic, legal, cultural, social, seasonal) factors that may impact or affect your business and what are you going to do about it? External factors are factors which have the potential to cause problems for a business however they do not occur within the business itself and thus the business has no immediate control over them. Therefore policies, practises and regulations need to be put in place to control or minimise the effect of external factors. These external factors can be divided into 2 groups; 1. External factors which effect our business’s legal liabilities a. Political b. Legal 2. External factors which influence/deter potential consumers from buying our products a. Economic b. Social c. Motivational d. Seasonal There are currently no political factors that will affect our business, however some legal factors include copyright violation on some of our Plushie products (Game boy and Pac man as they were originally invented by other companies). This will be solved by paying royalties to the desired companies or alternatively inventing our own ideas for Plushies. Also the Trade Practises Act 1974 deals with the regulating advertisement as to not mislead customers about our products or business. We have assessed and determined main factors that stimulate and influence our potential customers buying patterns are economic, social, motivational and seasonal factors. Economic factors include our potential customers’ income which can be measured in 3 different ways; gross income, net or disposable income and discretionary income. Our business will have to review and August 2010 The Small Business Plan for Made for Mizzi Page 31
  32. 32. access our potential customers’ income in order to ensure our products are at reasonable prices otherwise our products will be avoided. Inflation which is linked to the global economic stability also affects customers’ confidence when buying products especially shopping products. Inflation also has the potential to affect our business by causing product prices to rise from our wholesaler meaning we would have to raise our prices as well. This may sit unfavourably with our Australian customers, as our overseas suppliers may be hit harder by the GFC than Australians, resulting in an imbalance of trading. Social factors for business include consumers; age, class, gender, culture, family and ethnicity. In section 4.4.2, we have identified and assessed which social market we are aiming our product at. However within our social market the latest trends, fashion and technology are forever changing therefore our business will periodically assess our products and there potential to continue to succeed in the specified target market. By doing this we will ensure that our business continues to stay in touch with our customers and provide them with products that will continue to appeal to them. In regard to technological advancement, it has been noted that this will definitely affect our business because of ‘Apples’ progression to making more effective IPod for their consumers, they also seem to slightly change its shape and/or dimensions. This affects our business as we sell IPod cases and therefore some stock may become out of date with new IPod releases. This will be managed by assessing when to change our products to suit the majority of people who buy from us. August 2010 The Small Business Plan for Made for Mizzi Page 32
  33. 33. The business’s strategy to access the target market includes continually conducting an in- depth analysis of consumer’s current ‘wants’ and assisting to turn them into ‘needs’ through increasing the businesses reputation. They will be approached externally through communications (advertisements – magazines, television, radio, events etc), there positioning assists in developing a positive customer perception of the business in respect to the needs of the target market. The positioning strategy is to increase business reputation to become a well – known and popular brand that leads to consumers to “impulse buy” and creates consumer loyalty. 4.4.Market Research Market Research is one vital component in establishing a business; it can determine the success or failure of a business before any considerable amount of money is spent on its establishment. Market research can be conducted using 2 methods; Primary and secondary research. Primary research involves more tailored research than secondary research as it is usually conducted by the business to potential consumers. Secondary research is collecting relevant information which has been published by other organisations, bureaus or business’s. (All Business, 2010) 4.4.1 What Research have you done to investigate the following? Made for Mizzi will use both types of market research to conclude if our business has a chance at establishing and staying established in the retail sector. To ensure the accuracy of our marketing strategy, we have undertaken various primary market research, including surveying high school students aged 13 – 17 on which products they would most likely buy, the price expectancy and the types of iPods they own. (a copy of the survey can be found in the appendix). Before we started our trial run of our business ‘Made for Mizzi’ we surveyed students attending Cairns State High School, to find out which products attract what type of market segment. 4.4.2 Business Environment The results concluded from our market research can be seen clearly in the graph below (figure 5 & 6); Figure 5: Junior Market Segment Figure 6: Senior Market Segment Junior; Product m ost likely to buy Senior; Product m ost likely to buy 3.5 8 3 2.5 6 2 4 1.5 1 Male Male 2 0.5 Female Female Female Female 0 Num be r o f 0 Num be r o f Male Male Ipod pe o ple Ipod pe o ple Earasers Earasers cases Keyrings Keyrings cases P ro d uc t s P ro duc t s August 2010 The Small Business Plan for Made for Mizzi Page 33
  34. 34. We can see that in the junior segment of the school IPod cases were favourable amongst both girls and boys this was also reflected in the senior segment of the school. Comparing both girls and boy across both senior and junior segments, our keying and eraser products were more favourable amongst girls than boys. Therefore we concluded that our target market will mostly be girls between the ages of 13 – 18. By targeting a specific market allows us to plan an effective marketing strategy. August 2010 The Small Business Plan for Made for Mizzi Page 34
  35. 35. 4.4.3 Who are my potential customers? Potential customers are those who can be identified as most likely to buy products of a business. As stated above, from our market research we concluded that girl’s aged13 – 18 were most likely to be our potential customers. However our target market also includes boys aged between the same ages because of our IPod cases which proved to be successful both in the market research survey (figure ?) and from our sales in the trial period of our business (figure ? – page ??). Our potential customers will play a much greater role than purely being customers within our business, they will also provide us with feedback about our products, pricing and overall business to help in the decision making process of our business. This will be undertaken to help our business make correct decisions to suit our customer base. 4.4.4 What do I know about my competitor activity? Our major competitors include most merchandising businesses at enterprise, such as Quirky Tools. Externally our major competitors include larger retail stores which already sell similar products such as IPods and Plushies, these retail stores would include stores like target, Smiggle and Big W. Our competitors offer a wide range of products at financially conscious price. This is one of the key advantages our competitors have over our company. As their large product range allows them to draw a larger range of customers while satisfying our target markets wants (it contradicts the organised straight forward of office and school work by offering a unique and attractive statement). Other key strengths they show are they are a well established business. However their strength of being a large established business can also be seen as a weakness compared to ‘Made for Mizzi’. As we perceive this as their business would be unable to connect to their customers on a personal level as other small business’s can. We plan to compete against their strengths and capitalise on their weaknesses by marketing our products at a lower cost and adding a community feel to our business. By maintaining a small business we are able to analyse their strengths and maintain flexibility in decision-making, therefore improving our bottom line. By effectively position the business as more than just a place to buy products but to create a community through our online website. Our business will also focus on giving back to our customers through helping the environment and other community work. 4.5 Market Segments 4.5.1 Describe the different groups of customers (segments) that make up your total market: Customer segmentation is dividing up groups of customers into segments in order to find links or connections that may influence them in buying products. Segmenting can be done through either August 2010 The Small Business Plan for Made for Mizzi Page 35

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