Joytex Enterprise in Toronto - Assignment Example

ESSAY: BUSINESS PLAN FOR JOYTEX ENTERPRISE IN TORONTO By BUSINESS PLAN PART INTRODUCING THE CONTEMPORARY BUSINESS WORLD Executive Summary The business name is Joytex enterprises, a business enterprise that will be manufacturing textile products in the economy and the selling to the products to the public. The business will be located in Toronto in Canada. This is to cater of the large size of the business that requires large tracts of land for its establishment. The business will sell textile products that it produces. The business ideal customers cover all classes of people. The products will stand unique in the market because of the affordable prices that they will be charged. The owners of the business are professionals in the textile industry; this was to ensure that their skills can as well be combined in the production exercise. The business has future projects of expanding its operations to the foreign markets and thereby expands the markets of the business to enable the business increase the sales to greater heights and then maximize on the profits (Abrams 2003). Business Name Joytex Enterprises Description of Business Joytex business is a partnership business that mainly deals with the production and marketing of the textile products. That is the reason why the name has got a suffix ‘tex’ because of the textile products production and selling in the business. It is located in Toronto in Canada Form of Business Ownership My form of business is Partnership. This form of business is owned by all the partners. I chose this form of business unit because here, different efforts can be combined to produce high quality output. This is because of job specialization that further leads to division of labour. Again raising of capital is not that hectic because the partners contribute in raising capital to start the business. Another reason that made me choose this form of business is that losses are shared among the partners and is not left for one (Abrams 2003). Ideal Customer The business targets all categories of individuals ranging from children to the adults. The main reason for this is that most businesses in the area are mainly focussing on the ladies products and not any other. With all this category of people, the business therefore creates a wider market that will translate positively to an increase in the volume o sales. Businesses treat customers as their kings and queens therefore it is not ideal and advisable to concentrate in one particular group of people (Abrams 2003). Our Advantages The customers will prefer buying from me because the products that Joytex enterprises sell to them are the most current in terms of fashion and also are an improvement compared to the ones that are rendered by the competitors. The prices that will be charged will also be fair and other terms of sale will be accepted. The customers will be given time and room to bargain on the cost of items they would wish to purchase. Credit transactions will be accepted especially after the business will have known the credit worthiness of the various customers (Abrams 2003). Ethical Issues The business will deal with various ethical issues at different times of the operation. On pollution, the business will use environmental friendly chemicals in the operation so as to reduce the hazards emitted to the atmosphere. The workers in the business will be provided with ear muffs o protect them from the excess noise that will be caused by the moving engines during operation. The business will relate ell with the other companies so that they can create joint waste disposal projects, and even a company can use the remnants from one company as its raw materials to manufacture other products. By this Joytex enterprises will be controlling environmental pollution caused to the surrounding environment (Abrams 2003). Social Responsibility Social responsibility in a business is always shown when a business respects all the stakeholders in the business. The stakeholders in a business make up the business environment. This is either internal business environment (macro-environment) or the external environment (macro-environment). The internal business environment is made up the employees, the business culture and norms, and the business objectives. The external business environment is composed of the legal environment, the customers, demographic factors, ecological or the environmental factors, technological factors, and the suppliers ( Abrams 2003). A business should be responsible to the employees by paying their wages and salaries as at the agreed time and date. In the event of any delay then the employees should be informed earlier to prepare them psychologically. Joytex enterprises will ensure that all the employees are paid as at the agreed period of time and the correct wages are met. The customers in any business like it had been highlighted earlier are the queens and the kings of any business institution. The business will therefore be responsible to the customers by the provision of quality products that are durable, Joytex will consequently not giving wrong or false information to the customers( Abrams 2003). To the legal environment or the law, the business enterprise will acknowledge the role of the government involvement in business and make the payment taxes just like the other businesses do. Joytex enterprise will at the same tie register and operate with a licence for the operation to be legally accepted. License is a document that permits every business to operate legally and under the compliance with the laws of the country ( Abrams 2003). The business will similarly deal with the suppliers for it to continue in production. To the suppliers, it will ensure that every purchase of raw materials that is made on credit is paid in time and debts met on time as at the agreed period. The business depends so much on raw materials and h suppliers are the one providing them and so Joytex business will avoid any financial conflict with the suppliers as it also depends on them for the continuous operation to be enhanced ( Abrams 2003). Joytex will also be affected by the various economic factors such as inflation and the rates of foreign exchange in different countries. The business will therefore be responsible by adapting to the changes in the economy after making adjustments according bearing in mind the inflationary rates in the country and the foreign exchange rates too (Abrams 2003). Ecological or the operating environment where the business itself is located is another factor that a business should bear in mind. Many companies use water for various reasons in their operations but they do not care on how the final product will be disposed. Joytex enterprise will be socially responsible by recycling water and also treating the water before they discharge it to the natural environment. The business will also use chimneys that are lagged and this will ensure that the smoke and other harmful fumes are not emitted to the atmosphere that will adversely impact the environment (Abrams 2003). Demography is another important factor that businesses do consider. This is all about the population that affect the business. The population can affect the business internally and externally. A business can be affected internally when the population of the working staff exceeds the available jobs within the business. This therefore means that the labour is not fully utilised in the business and the skill or knowledge is wasted. Similarly a business can be affected externally and this is always a very crucial factor that many investors put into consideration before the business is located. Joytex enterprises will be responsible by the employing the required number of staff ( Abrams 2003). Businesses should also be socially responsible to the locals. Joytex enterprises will show its responsibility by employing the local people before putting into consideration of hiring staff. This will only happen in case there is a shortage (Abrams 2003). Global Issues I wish to sell my products to other countries and the one that I prefer dealing with is Switzerland because of the peaceful coexistence that she has with other neighbours globally. The challenges that I anticipate to get are so many like convincing the customers in the foreign markets to believe my products as the best compared to the existing ones. Another great challenge that I expect is the taxation by the government, finding local agents to sell on my behalf and transportation costs to be incurred (Abrams 2003). Global competition is another expectation and the advantage that the foreign competitors will have is that my products have to be transported from my home country and in any case they have warehouses, they will take advantage of the shortage that may arise when am away doing production (Abrams 2003). PART 2(a): THE BUSINESS OF MANAGING Mission Statement Joytex enterprises, provides wonderful products to wonderful people at affordable price. Business Goals The main goals of the business are: Selling two hundred thousand products in the first year. Expanding the business market by meeting about one hundred thousand people in the first year of operation. Making sales of up to about $ 1200000 in the first financial year of operation. SWOT Analysis The business conducted the SWOT analysis and clearly highlighted the strengths, weaknesses, opportunities and the threats in the market force. The analysis is tabled as shown below: STRENGTHS Strong brand Strong market positioning Strong economies of scale Broader product line Strong networks Very strong promotional techniques WEAKNESS Rigidity to open the company to outsiders due to financial constraints Not shareholder friendly due to high share prices The persuasion of the customers as the best product in the market is problematic and difficult. OPPORTUNITIES Good reputation due to the high quality products and also affordable market prices Very loyal customer base towards the business Very loyal employees to the business thereby working diligently for better output THREATS Strong competition Management The business partners made an agreement and proposed that Joytex enterprises will be managed by two directors on their behalf. The directors must have various qualifications that make them suitable for the job (Abrams 2003). Organization Chart PART 2(b): THE BUSINESS OF MANAGING Corporate Culture The business will need both casual environments as well as professional environment. All employees will be put into consideration without any discrimination provided the required job skills and the checked job qualifications are met. Employees should not be stimulated by various factors to make the business go down in terms of production. They should be mature and knowing the regulations of a job environment ( Abrams 2003). Leadership Philosophy The leadership philosophy that is applicable in the business is that the management of the business should be subjective and taking into consideration various parameters and balancing them too (Abrams 2003). Job Descriptions The directors will act on behalf of all the partners as the voice of all other partners as the general manager. The Human Resource Manager will care for the welfare of all the staff. Personnel officer will hire and fire staff and recruit new staff. Production managers will ensure there is continuous production in the business. Sales and Marketing Manager ensures that proper marketing is done for sales to be realized. They will require computers to conduct their advertisements. Accountant records all the financial transactions. They need accounting resources like cashbooks, calculators and computers. Agents and Distributors ensures that the goods reach the consumers. They will need mobility media to reach consumers quickly. Procurement officer ensures there is regular purchase done to ensure steady production. The budget officer prepares budget for the financial year (Abrams 2003). Job Specifications Job title Job qualifications Managing director Must be a degree holder in business administration and management. Must have worked for a period of more than five years mentioned job title. Must possess good management skills that are vital for the proper business management. All the academic credentials have to be attached and submitted. Sales and Marketing officer Must be a degree holder in sales and marketing from a recognised university in the country. Must possess good communication and marketing skills that are ideal for proper and effective business marketing. Must have worked in the mentioned job tile for a period of not less than three years in a business enterprise of the same or higher calibre. All the academic credentials have to be attached and submitted. Accountant Must be a degree in holder in accountancy from a recognized university in the country. Must have worked as an accountant for a period of not less than two years in a financial or any business institution. All the academic credentials have to be attached and submitted. Training Employees Our hired employees will need regular training on how they relate with the customers. This is so because the customers are always treated as the kings of any business for the success of any business institutions to succeed in its operations. The employees can as well be trained on how they interact with the management and among themselves too. The training of the employees will be done at every point of recruitment of the new staff. This will ensure that the business working staff are all skilled and possess he required production and marketing skills (Abrams 2003). Compensation The wages that our business intends to pay our workers is US $ 200 as the basic salary, 5% commission on any sales they make above US $ 150000 and 7.5% commission on ales above US $ 450000. We as the business partners chose this so that in as much as the employees work harder to earn, the business on the other hand increases its sales and thereby an increase in profitability of the business. The employees will as well be provided with allowances during their working period in the business .Again they will be assured with insurance companies such that in the event of a risk occurrence while they are executing the business duties, they are compensated accordingly ( Abrams 2003).. Incentives Our business intends to motivate the morale of the workforce by better remuneration, improving their housing and also assuring with the insurance companies. This can make them to work so harder knowing that in case of any risk occurrence while they are executing their duties; their welfare is catered for through the compensation schemes. Rewarding of the employees by any business is always a motivational factor that stimulates the employees thereby making them to work to their perfection (Abrams 2003). PART 3: MANAGING OPERATIONS AND INFORMATION IT Resources The business will require computers that are networked for internet and intranet connectivity. Closed circuit television will as well be needed in the business premises to assist in the monitoring the movement of the employees and enhancing security of the business stock as well as the produce. The information technology experts are as well various IT resources that will be required in the business premises to ensure that the different areas where the electronic gadgets are functioning as they should to keep the business on the move (Abrams 2003).. Customer Services Databases will be used in keeping track of customers. These will be stored on the records kept in the computer system in the business to enhance easy and faster retrieval of the wanted information. Through the internet, e-commerce will be ideal. The interaction between the customers and the management will be easily facilitated as they will link at the touch of the button and the desired customer tastes and preferences adjusted accordingly (Abrams 2003).. Cost of Doing Business Expenses Expected Monthly Cost Expected Yearly Cost Rent US $ 50 US $ 600 Salaries and Wages US $ 10000 US $ 120000 Supplies: Technological, Equipment, and Furniture (computers, software, copy machine, desks, chairs, etc.), other US $ 10000 US $ 120000 Advertising and Other Promotions US $ 200 US $ 2400 Utilities: Heat, Electricity, etc. US $ 250 US $ 3000 Telephone and Internet US $ 150 US $ 1800 Insurance US $ 25000 US $ 300000 Other (Taxation) US $ 3000 US $ 36000 Other (Transport) US $ 20000 US $ 240000 Expected Revenue The price of the products will be $ 6, and the business has got an ambition of selling about 200000 products in a year. However the price of the product can be adjusted depending on various factors that may arise from the cost incurred during the production to the marketing forces. By selling that number of products, the business therefore hopes to meet approximately one hundred and fifty thousand customers to about one hundred and eighty customers in a year. When the value of anticipated products to be sold in a year is multiplied by the cost of the products, the total value of the expected revenue in the year is $ 1200000. This revenue is by the simple calculation shown below (Abrams 2003).: $ 6 ×200000 products = $ 1200000 Income Statement and Balance Sheet 12-Month Income Statement (Profit & Loss Statement) June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May YEARLY Revenue (Sales)                           Category 1  10000  10900  11000  11500  12000  12500  13000  13500  13600  13800 14000  15500   151300 Category 2  10000  10800  10900  11000  11500  12000  12500  13000  13400  13700  14000  14500  147300 Total Revenue (Sales) 20000 21700 21900 22600 23500 24500 25500 26500 27000 27500 28000 30000 278700                             Cost of Goods Sold                           Category 1  3000  3500  3800  3900  3950  4000  4100  4200  4100  4200  4300  4500  46550 Category 2  3000  3300  3200  3200  3350  3500  3900  4000 3900   4300  4200  5500  45350 Total Cost of Goods Sold 6000 6800 7000 7100 7300 7500 8000 8200 8000 8500 8500 10000 92900                             Gross Profit 14000 14900 14900 15500 16200 17000 17500 18300 19000 19000 19500 20000 205800                             Expenses                           Rent Expense  200  200  250  250  250  250  250  250  250  250  250  200  2850 Salary/Wage Expenses  400  430  430  430  430  430  400  400  350  300  250  200  4450 Supplies Expense  400 450   400  400  320  300  300  250  200  150  150  100   Advertising Expense  500 500  420  450  400  300  200  150  100  100  150  100  3420 Utilities Expense  200  250  200  150  100  170  100  100  150  100  50  150  1720 Telephone/Internet Expense  300 320  300   200  100  150  200  200  150  100  50  150   Insurance Expense  200  200  200  200  200  200  200  200  200  250  150  100  2300 Interest from Loans (if applicable)  300  350  300  300  350  300  300  200  100  100  100  100  2600 Other Expenses (specify)  400  100  50  70  50  50  50  100  100  50  50  50  1120 Total Expenses 2900 2800 2450 2050 2200 2150 2000 1850 1600 1400 1200 1150 23750                             Net Profit 11100 12100 12450 13450 14000 16950 15500 16450 17400 17600 18300 18850 184150 Balance Sheet Assets US $ Current Assets Cash in Bank 71100 Cash Value of Inventory 61200 Prepaid Expenses (insurance) 48700 Total Current Assets 187000 Fixed Assets Machinery & Equipment 50000 Furniture & Fixtures 58800 Real Estate / Buildings 62900 Total Fixed Assets 191700 Total Assets 378000 Liabilities & Net Worth Current Liabilities Accounts Payable 13800 Taxes Payable 20000 Notes Payable (due within 12 months) 11000 Total Current Liabilities 44800 Long-Term Liabilities Bank Loans Payable (greater than 12 months) 220000 Less: Short-Term Portion 20000 Total Long-Term Liabilities 200000 Total Liabilities 244800 Owners Equity (Net Worth) 133900 Total Liabilities & Net Worth 378700 Floor Plan Raw Materials and Supplies The main raw materials that will be highly used in the production process are: wool, acrylic Staple fibre or tows; Pigments; Dyes; Polyester Staple Fibre; Viscose Staple Fibre; Polyester Chips and Nylon Fibre. Various suppliers have submitted their application for the tender that was posted at the business website. This is because of the nature of the business activity or the output that the business wishes to have (Abrams 2003).. Quality Assurance The business director will liaise with the Quality Assurance Department of the country to help them in quality evaluation of their produce. By this they will be able to know whether the product’s quality is the required or can be exploitative to the consumers. The business agents and the various external trade personnel will conduct a thorough standard on the available similar products in the market and where there will be need for adjustments, the business will respond as desired (Abrams 2003).. PART 4: MANAGING MARKETING Target Market Like it as highlighted earlier, the first target market for the business is the youth. They prefer a lot of products that have pleasing and attractive designs so that they match the current trends in the economy. Another targeted group is the working adults in towns. The business must operate continuously if the products that are produced are purchased. There population in the town therefore suits the business location (Abrams 2003).. Product Features and Benefits The products are very fashionable and will make the customers long term demand is for the first time met for years. The price of the products is also affordable. The products will be made of the nylon and other fabrics because the main product output will be mainly textile products (Abrams 2003).. Product Differentiation The products are special; this is because the products like it was highlighted earlier are conspicuous since they are an improvement of the currently existing ones. The location of the business therefore suits the product marketing strategies. The terms of sale that customers will use is also suitable ones their credit worthiness is established (Abrams 2003).. Pricing Skimming pricing. This strategy is suitable because you set prices after knowing the prevailing market prices. This plan or rather type of pricing can be an added advantage as the prices will b based on what has been in the market that is adjusted accordingly and appropriately in a manner that suits and favours he customers ( Abrams 2003).. Place (Distribution) Issues The business intends to establish an appropriate channel of distribution that will ensure that the products reach the consumers at the required time and the consumer demands met. The products will be sold directly to consumers, the wholesalers will also be allowed to purchase in bulk and sell to the consumers, the wholesalers again can sell to retailers who will in turn sell to the consumers ( Abrams 2003).. Advertising Informative advertising It is observed that the business will face stiff competition in the market for its products from other businesses. This therefore makes us to develop marketing strategies to compete favorably and create competitive advantage in the market. This form of advertising will create awareness to the targeted customers that a new product that is of their taste is available in the market. This will be conducted through television, radio channels and the various social media. These areas are highly used by the youth who like watching, listening to music and those who like socializing and chatting with their friends while they are away. Institutional advertising will similarly be used. This will also help in making the business known to the target market. Primary market demand form of advertising will also be ideal for the product especially in the products new markets ( Abrams 2003).. Promotions Other method of product promotion that i will use is the personal selling. This will make the business to interact directly with the customers and know their tastes and any complain that they may raise and therefore adjust appropriately within the required time. Personal selling will also be suitable in the new markets that the business intends to reach when expanding its distribution. It is also better to use this method of product promotion for the case of products that need demonstration. Personal selling is also good when there is stiff competition in the market ( Abrams 2003).. PART 5: MANAGING FINANCIAL ISSUES Start up Costs Joytex business enterprise will need a start up capital of $ 822800 that is required for starting of the business and keeping it in operation for one financial period. This is based on the approximations and estimations that the business partners put in their consideration ( Abrams 2003).. Financing The business being a partnership form of business, the partners will contribute money to raise capital. We will also lease and rent property and raise money through this. Loans from banks and other financial institutions can as well be borrowed to help in financing the business ( Abrams 2003).. Executive Summary The business name is Joytex enterprises, a business enterprise that will be manufacturing textile products in the economy and the selling to the products to the public. The business will be located in Toronto in Canada. This is to cater of the large size of the business that requires large tracts of land for its establishment. The business will sell textile products that it produces. The business ideal customers cover all classes of people. The products will stand unique in the market because of the affordable prices that they will be charged. The owners of the business are professionals in the textile industry; this was to ensure that their skills can as well be combined in the production exercise. The business has future projects of expanding its operations to the foreign markets and thereby expands the markets of the business to enable the business increase the sales to greater heights and then maximize on the profits ( Abrams 2003). References Abrams, R. (2003), The successful business plan; secrets and strategies, UK, The Planning Shop. Read More