BUSINESS EXPANSION 7
NameOf The Student
NameOf The Affiliate Institution
FinancialPlan For The Business
Ralsicoffee shop aims at capitalizing on the high the demand forintegrated meals from varied cultural settings globally. Through thepartnership established, the amount present will aid the business inrunning its daily activities. The financial strategy in use aims atmeeting variables costs through owners contributions. Returns fromthe investment will get directed towards payment of loan associatedwith the purchase of the existing coffee shop and renovationsundertaken to enhance customer satisfaction regarding aestheticappeal.
Thestrategy finds its base on future forecasts and goals of theinvestment. Management practices aim at creating and advancing aloyal client base that will act as a propelling tool in financialgrowth of the coffee shop. The investment net worth will double inthe next in three years through increased customer satisfaction.Withina span of three years, loans obtained will be fully covered and therevenue generated will equal operational costs. Within a span ofthree years loans obtained will be fully covered and the revenuegenerated will equal operational costs. Ralsicoffee aims at maintaining an excellent gross margin of over seventypercent which will get integrated with rational operating costs togenerate sufficient funds that will enhance further growth andexpansion.
CriticalAssumptions In The Plan
Thefinancial plan disregards changes in current and long-term interestrates assuming that for the three years loan recovery period,compounding rates will remain the same. Fluctuations that may occuras a result of the economic crisis are expected to balance since thetimeframe allocated for repaying is relatively long. Additionally,tax rates are expected to remain at the current rate of twenty-fivepercent for the estimated period until the investment breaks even.
Theinvestments aim at sustaining a healthy cash flow state which willcreate possibilities for real-time servicing of debt and costs linkedto future growth. The cash flows are expected to rise as the loyaltyof customer’s increases. Hisrichet al. (2013) notethat as businesses become viral, cash flows are prone to increase asoperations costs go down per unit production. Expectation of a netcash flow of $200,000at the end of the first year of operation exist. However, cashbalance will amount to zero due overdue loans. The plan uses grossmargins, inventory turnovers, and operating expenses to indicate itsfinancial strength.
Theplan forecasts fixed costs of $20,335permonth in the first year of business operation. An estimate that amargin of seventy percent will get achieved at the end of the firstyear exist. Ralsi’scoffee shop break-evensales capacity gets forecasted at $41,300in each per month. Additionally, the business is expected to raisesimilar volumes of sales from day one of its operation. The financialplan estimates a revenue break-even of $21,250eachmonth to turn the business into a profitable endeavor. In theestimation of the break-even cost, monthly average fixed and variablecosts in percentage are assumed to remain at a constant rate.
GuerrillaMarketing Strategy For RalsiCoffee Shop
Thecoffee business aims at using an eight steps process in developingthis creative marketing intervention. The plans involve developing anambient form of GuerrillaMarketing will develop.Firstly, the individuals marketing the business each day will bedetermined. According to Burns(2010), effectivemarketing is not done periodically, and it involves dailyundertakings aimed at selling a company’s product or services.Assigning this role to a qualified individual enhances the success ofthe business. Secondly, development of strategy will entaildeveloping a marketing budget which acts a guiding element inensuring that the required advertisement gets accomplished, and thebusiness name is sold to potential customers. Jones& Rowley (2011) affirmsthat failing to establish marketing expenses creates possibilities ofeither excess or too low advertisements efforts. Marketing tools willthen be selected before the real undertaking and noted down. VariedAmbient techniques of this marketing strategy are present, and themost effective channel will pass the test of time in marketing willfind the application. Effective research will ensure that the bestpath to reach potential customers get followed. Burns(2010)affirms that strategies that succeed in marketing are those reachinga relatively high percentage of the target individuals with ease,frequency and repetition. Developing the strategy will involverecording marketingefforts in the form of a calendar that aids in keeping track ofresources and time spent in the undertaking.It will list by month, week or even years the results and successattained by the intervention and thus aid in keeping the businesspartners sanity as they develop and enhance the investments.
Thefinal phases of developing the intervention will involve buildinga structure that permits marketingthrough the investment of money, time and other related resources.Hisrichet al. (2013) affirmthat vast individuals fail in marketing since they fail to assignresources to their marketing plans. The intervention will then beexecuted and improved to offer better results. Each firm isresponsible for selling its brand name to its target customers. Theamount of energy deployed in the action determines the level ofsuccess attained in the marketing business and thus the numbercustomers present in business (Burns,2010).The effectiveness of the plan will get tracked aftera period. It is efficiency will get evaluated through measures suchas theresources spent in intervention and the exact number of newcustomers. Accurate measurement of the efficacy of marketing ispossible only after a long period. Finally, the developedintervention will get refined and improved periodically
LocationOf A Second Store
Locationof any business determines greatly the level of success attained.Place forms one of the P`s in the four marketing strategies namely:product, place, promotion and price. Jones& Rowley (2011) affirmthat a business location offers an opportunity where customersultimately receive or evaluates their products. The 25thstreet of Ogden,Utah is the best location for a second store.
Accordingto Hisrichet al. (2013), asecond store located relative to parking lots, streets, parking, andother investments stands a better chance to succeed.Ogden,Utah 25thStreethas vast of these facilities. Thesite offered by these facilities creates easy visibility of thebusiness to pedestrians. Additionally, such elements enable easyaccessibility to the business. Automobile traffic can easily evaluatethe products in the store. Proximity to other businesses draws newcustomers in any business (Burns,2010).However, not all business will integrate to capture customerattention. The store will do extremely well when located next to abusiness which they can link. Products in the store will primarilyinfluence the location. Jones& Rowley (2011) givean instance of the store dealing with sporting goods performingexemplary next to the gym. Thus, the most suitable location of asecond store in this perspective is an area where there are higherpossibilities of its potential customers.
Asecond store should feature in a location where the community presenthas a positive reputation concerning the products in the store.Additionally, the individuals in the given locality should depictconsistency regarding the image the business portrays. A locality,where the store products coincide with community norms, creates apositive business environment that ensures better performance of thebusiness due to a high number of customers.
PlanFor Securing Sources Of Debt Financing For A Second Store
Mystrategy of obtaining debt financing focuses on affirming SecondStore business long-term goals. The intervention focuses on thefinancial aim of the business of and prospects regarding the future.According to Burns (2010),debtfinanciers needs to comprehend investors strategies for growth beforethey decide to lender. My long-terms goals such as doubling the networth of the business in the next three years and advancing the storeproducts line will act as critical tool ensuring my business getfinances. I intend to use my future expansion plans to express thefeasibility of my business. Further, the future forecasts will getaccompanied with procedures and details on the right channel to findapplication in delivering the prospects. My plan will have concisegoals and objectives which can be quantified and the best strategiesto achieve the stated goals. Additionally, I will include my elementsthat give my business a competitive edge in the face of similarinvestments.
Myplan will give an insight into the business present cash flows andforecasted revenue. Jones,& Rowley (2011) ascertainthat every financier is concerned about current profits stream andhow business organizations handle them before they can affirm theirdecision of loaning. I will discuss variable and fixed costs in myinvestment. Expenses such as labour costs, rent and utilities willfeature out in my plan. Further, I will include the amount of moneyinvested in the business and quantify how much will get spent in thefuture.
Burns,P. (2010). Entrepreneurshipand small business.Palgrave Macmillan.
Hisrich,R. D., Peters, M. P., & Shepherd, D. A. (2013).Entrepreneurship-9thedition, McGraw Hill
Jones,R., & Rowley, J. (2011). Entrepreneurial marketing in smallbusinesses: A conceptual exploration. InternationalSmall Business Journal,29(1),25-36.