ABC Toy Store - Business Plan Example

XYZ No. 12345 ABC TOY STORE BUSINESS PLAN ABC of XYZ Department of Business Administration 15 March, Table of Contents Contents Page No 1. Vision Statement 03 2. Legal and Organizational Structure 03 2.1 Staffing Policy and Strength 04 2.2 Our Focus 04 3. Business Environment 05 4. Objectives and Implementation Strategy 06 5. Marketing Plan 06 5.1 Marketing Objectives 06 5.2 Marketing Strategies 06 5.3 Marketing Environment 08 5.4 Performance Measurement 08 6. Operation Plan 08 6.1 Performance Measurement 09 7. Human Resource Plan (2010 – 2011) 09 7.1 Performance Measures 09 8. Financial Plan 10 8.1 Important Assumptions 10 8.2 Projected Profit and Loss Statements (2010-11) 11 8.3 Performance Measurement 11 9. Conclusion 12 Works Cited 13 1. Vision Statement Our vision is to develop and manufacture high quality products of educational and entertainment toys for children and achieve the acceptable levels of customer service by maintaining excellent store environment. Commitment, dynamism and innovation are our core values. 2. Legal and Organizational Structure ABC Toy Store is American based corporation and is equally shared and owned by Michael Philips as Managing Director and Ian Smith as General Manager. The store has legal protection under government act about sustainable environment. The administrative and staffing composition of our store has been designed on divisional structure as shown in the following figure. 2.1 Staffing Policy and Strength ABC Toy Store has the plan to go for international in forthcoming years. In order to achieve it, we will apply polycentric staffing policy for the first year of the marketing. In this approach parent-country nationals hold key positions at company headquarters while host-country citizens manage foreign subsidiaries (Hamblin, 1974). This staffing style can curtail the risks of cultural myopia. For a multi-domestic strategy, this is considered as the best policy. The Managing Director and General Manager are responsible for over all running of the store while the daily operations are supervised by sales managers who have degree MBA in marketing form Boston University and 14 years experience of related field. Position Strength in 1st Shift (0800 hrs – 2000 hrs) Strength in 2nd Shift (2000 hrs – 0800 hrs) Total Strength President 01 - 01 Vice President - 01 01 Sales Manager 01 01 02 Admin Officer 01 01 02 Customer Service 05 03 08 Accounting 01 02 03 Admin Staff 02 01 03 Facilities Management 03 02 05 Total Strength 25 2.2 Our Focus Whether it is our stores, our systems or our practices, we will be always keen to bring effective changes and improve our standards in store, customer service and practices. We will specially focus on the following: Opening of new branches of ABC Toy Store Update and upgrade our system on modern trends Explore new markets for growth Bring innovations in toy store industry Consistently maintain the customers satisfaction Ensuring of the presence of ABC toys in every mall of our area 3. Business Environment ABC Toy Store is a newly established toy store in United States, looking to establish its office at San Francisco in the fist year of its business and subsequently a network of toy stores in ten major cities of USA. The primary operation of the ABC Store is the sale of entertainment toys, educational toys and items, books, and some other related items with special emphasize on children up to the age of 15 years. Our business plan confirms that we have explored our markets, have reviewed our competitors and made out what we will have to do to force the lock of the markets so as to capture the share away from them. In order to achieve our marketing goals, we have designed a qualified management team with compulsory financial and marketing experience. San Francisco is an attractive location for tourists, therefore it has been planned to run the store around the clock in 02 shifts. Customers buying toys for their children want value for their money. We are committed to introduce new products in the market to fulfill the customer’s expectation. At present, we have planned to take start with 15 products. The toy industry is well established in United States as almost 11,000 companies and toy stores operate at one or more locations with annual revenue of about $25 billions. Almost 545,000 people are attached with the industry while payrolls during each of the last 05 years have exceeded $02 billions. During last decade, online services of toy stores enabled the small toy store to develop their business nationwide basis. As stated above, numbers of stores are already in the market and each contains number of factors both of variable and permanent nature which constitute the internal environment of the company. Therefore, ABC Store will strictly follow its core values to compete the market challenges. 4. Objectives and Implementation Strategy The above visionary statement will be implemented by delivering an excellent shopping experience for our customers in the following ways. Rationalizing the mission and objectives of the organization Determining optimum resources Affordable prices for quality products Designing suitable structure and research on innovative items Friendly dealing of customers dealing like guests Smooth, interactive and impressive shopping environment Execution of business as team 5. Marketing Plan We are intending to sustain a widespread marketing campaign to ensure our utmost visibility in the targeted market of San Francisco. The salient features of our marketing objectives and strategies are listed below. 5.1 Marketing Objectives An extensive campaign in the local targeted market in San Francisco through electronic and print media and word of mouth advertising Developing a website to promote the online marketing in other parts of United States 5.2 Marketing Strategies (a) We will carry out the company’s dual strategy in developing its products in rapidly changing industry. One strategy is to invest heavily in research to discover and develop innovative trends and demands through public surveys. These surveys will assist us to establish a record of information on demographics, interests and comments of general users on our products. With the help of this collected database, necessary improvements will be done and therefore ABC Toy Store will ensure to meet the interest of children and customers demand regularly. In order to gather the data, we will primarily use internet as a medium to carry out its publicity and research surveys. Incorporated in the overall business strategy in ABC Toy Store are systems, procedures, and policies to assure that research activities are yielding strong financial returns reporting are timely, accurate and reliable. (b) In order to gain its initial short terms goals, ABC Toy Store will highly depend on its communication strategy to its clients. Advertising policy will be a key factor. During the initial phase, we will emphasize to keep ourselves present on regional basis i.e. within San Francisco. An electronic campaign will be launched that include newspapers, radio, television, and online contact to know the trends of local customers. To make the communication more effective and productive, an advertising consultant will be arranged to carry out this important campaign. After achieving initial short term objectives, our strategy would be to keep the name of ABC Toy Store in front of general public. Along with occasional ads on electronic and print media, yellow page advertisement will also be used to achieve this goal. (c) Promotional plan of ABC Toy Store is diversified and will incorporate a variety of marketing connections. Therefore, in order to monitor and observe our services, products, and market position, we will arrange a program to receive the feedback from the customers. Different techniques will be applied to do this such as telephonic conversation, direct mail, opinion through public surveys and online comments. Since internet is the most ready and widely used medium to communicate, therefore ABC Toy Store would launch its website which will be one of the main communication channels. (d) Moreover, ABC Toy Store will specially emphasize on the pricing of product. Our strategy is to provide our best quality products at competitive but affordable rates. A detailed survey of competitors pricing will be held to adjust our price for competition. 5.3 Marketing Environment Population Population: 7767633 (http://sanfrancisco.areaconnect.com/statistics.htm) 394828 males,  381905 females Age Group Population (%) Under 5 years 4.07 05 to 09 years 4.06 10-14 years 3.97 14-19 years 4.29 Total (under 19) 16.39 5.4 Performance Measurement Relative market share and position Appearance and communication with clients Availability and security 6. Operation Plan In order to execute the operations and achieve the over all financial targets, ABC Toy Store is looking to take the following steps. Sale of toys of both entertainment and education oriented. Books and magazine as well as refreshments for customers and guiding maps for tourists Establishment of at least 02 sales offices for publicity and store purpose Conducting of general gift and trade shows and exhibitions Establishing of section to deal direct mail demands One-to-one campaign through email or letters 6.1 Performance Measurement Productivity of store Efficiency of staff Speed of delivery Innovation in designing and purpose of products 7. Human Resource Plan (2010 – 2011) Position Strength in 1st Shift Strength in 2nd Shift Total Strength Payroll/Head ($) Total Payroll ($) Managing Director 01 - 01 46,000 46,000 General Manager - 01 01 40,000 40,000 Sales Manager 01 01 02 35,000 70,000 Admin Officer 01 01 02 32,000 64,000 Customer Service 05 03 08 18,000 144,000 Accounting 01 02 03 20,000 60,000 Admin Staff 02 01 03 20,000 60,000 Facilities Management 03 02 05 12,000 60,000 Grand Total 25 388,000 7.1 Performance Measures ABC Toy Store would focus its attention on its human resource to create it as a competitive advantage in the industry. The company would ensure the following performance: Emphasis on the total contribution to the company Expectations of creative behavior and innovative approaches Tolerance of ambiguity and change Putting responsibility for delegating authority and making decisions High concerns for total customer value Management and work force are partners Special concerns for overall effectiveness and welfare of employees 8. Financial Plan Our Account department believes that preliminary financial support of $850,000 will be adequate to achieve our short term profitability plans. The company will be looking to arrange this money through its business shares, bank loans and personal investment. To cover the early expenses, we are planning to request a loan of $500,000 which will be spent on manufacturing, production, and marketing. We estimate that by the end of first fiscal year, we will make a minimum gross margin of 29%. We also estimate that during the same period, we will sustain a net return on sale by 14% to 16%. Our financial projections are: Loan term is 05 years with fixed interest rate 10% per annum Lease term is 05 years with fixed interest rate 16% per annum Payables are net cash for all toy products with minimum cash in hand of $20,000 8.1 Important Assumptions The following assumptions are very critical for the success of our store in future. Year 2010 - 2011 Plan Month 1 Current Interest Rate 10% Long-term Interest Rate 10% Tax Rate 23.38% 8.2 Projected Profit and Loss Statements (2010-11) Income Net Sales $22,15,000 Cost of goods sold $215,000 Other $25,000 Total Cost of Sales $240,000 Gross Margin $19,75,000 Expenses Payroll $388,000 Payroll Taxes $37,500 Sales and Marketing and Other Expenses $182,000 Depreciation $66,000 Utilities $52,000 Insurance $100,000 Advertising $35,000 Electricity $16,000 Printing and Stationery $26,640 Telephone $4460 Vehicle Expenses $17,500 Repair and Maintenance $8400 Total Operating Expenses $933,500 Profit Before Interest and Taxes $10,41,500 Interest Expense $44,290 Taxes Incurred $136,585 Net Profit $860,625 Net Profit/Sales 43.57% 8.3 Performance Measurement Profitability Liquidity Capital Structure Market Rations 9. Conclusion ABC Toy Store is a new entrance in the toy industry. Through its differentiated products, the store is looking to conquer the market in San Francisco in a span of just 3 to 5 years. We have done the home work almost in all field of the industry and therefore, on the basis of well-researched data, we have established very specific short and long term objectives. By using conventional and modern technology as well as through skilled and motivated human resource, the company believes to achieve its economic, social and sustainability targets within specific time frame. Works Cited Hamblin, A. C. (1974). Evaluation and Control of Training. Maidenhead: McGraw-Hill Book Company. Read More