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Vision

Question:

Describe about the Strategic Business Plan for Aspire Enterprise Pvt. Ltd. New organic food store?

Every enterprise from the very beginning of its establishment posses some objectives and goals, few of them are long term goal and few of them are short term goals. Fulfilling of short term goals are the key for achieving the long term objects but to accomplish these objects the enterprisers of that enterprise must adopt some principals and plans. Executing these plans is much essential for betterment of the business concern. Entrepreneurs must adapt some strategies for achieving its prima facie objectives. Like other well established business concerns Aspire Enterprise is also adapting strategic plans for execution of its new business proposals. Implementation of these plans may take the entrepreneur to a higher level as to its organic food store’ development is concern (Foss, 2007).

2.1 Vision & mission:

Vision

  • To increase the profitability via increasing the chain marketing business as well as joint venturing with the other organisation

Mission

Aspire Enterprise Pvt. Ltd. is committed to provide the greater quality of food including fresh and healthy food to the local community. The staffs of the food store are friendly ready to advised for selecting better combination of food.

SMART Objectives

S (Specific)

Committed to provide the fresh and healthy food to the customers that organically grown fruits vegetables

M (Measurable)

Personnel cost will be less than $200 in the first year and $100 in the next year

A (Achievable)

Increase the sales up to $300 in the first year and more than 1 million in the next year

R (Realistic)

Offer food to the people without flavours, artificial colours

T (Timed)

Profit will be in two year and more profit on sales in the three years (Reddish, 2011).

Forming Partnership: Standard partnership will be the effective method in developing a business in organic food industry.

Income Taxes: In order to develop the organic food store, organisation has to pay all LLC taxes to the government.

Register the business: For engaging more customer and employees need to register the business like a sole trader.

In an organic food store business the products and its utilization must be quite specific and there must be only organic food, subject to conditions specified. Famous organic products like organic vegetables; carrot, tomatoes, potatoes etc, organic syrups, utility products and many more should be shown in the store and for further achievements new invented organic products may also be included within the scope of the business. Offering quality products makes the business concern famous in the field, it also helps to achieve good will in the name of the business (Smith, 2012).

Now days competition in business is a very important part, and to get success every enterprise must get rid of it. Competition depends upon the locality, kind of product, community of consumption, price of the product and many other important things, which are to be recovered to promote the business strategies (Grinblatt & Titman, 2002).

Objects

Price

Raw Materials

$600

Consultants

$1300

Rent

$700

Insurance

$1000

Legal

$1200

Remodelling

$5000

Other

$2000

Total

$11800


Table 3: Start Up expense of business for Aspire Enterprise Pvt. Ltd.

Assets

Price

Required Cash

$40000

Long Term Assets

$30000

Start Up inventory

$21253

Other Current Assets

$10

Total

$91263


Table 4: Start Up Assets for Aspire Enterprise Pvt. Ltd.

In every business concern there are some factors which are very important for the success of the business. Execution of strategic plan is much required in the success of the business. Capital formation plays a very important role for the growth and establishment of the business. Proper compliance from the part of the employees is also a critical factor for success (Sitarz, 2000).

Political: Political environment in each state where the business is to be run, is the most important aspect, it signifies the rules and regulations which are to be followed by the business concerns.

Mission

Economical: Economic condition puts a huge effect in the conduct of the business, economic stability provide great boost for the newly establishing entrepreneurs.

Social: Social phenomena is a very important part for the growth of the business, if the social environment is good and demand of the product is natural then it will enhance the sale but if the social environment is not to that mark then it will badly affect the sale as well as the conduct of the business.

Technological: each and every business gets better with good technological aspects, technological enlargement put the enterprise into a good mount of achievement.

Legal: Legal aspect is the regulatory part of the business, regulations makes the conduct of the business tougher or easier, legal compliance is necessary for establishment of any enterprise.

Environmental: Environment affects the business procedure and future plans very effectively. Suitable environment tends good sale as well as further progress but unfavourable environment may stuck the business procedure into a stagnant condition (Woodburn & Wilson, 2014). 

Strength: Preparing the fast menu with greater conscious of healthy and fresh food

Weakness: Management process will be the key weakness for Aspire Enterprise Pvt. Ltd. because they are the new in this field.

Opportunity: Fresh products and fast menu preparation may satisfy the customer and increase the customer base as well as customer loyalty.

Threats: Existing food store within the local community will create the potential threate for the company.

Aspiration enterprise is opening a store of organic foods, it is clear from previous years that sale of organic foods is higher than general vegetables, so the company must target those community of customers who are the actual consumers of the organic products, at first identification of the community of consumers is required then targeting those consumers for selling by attracting their mind towards the store. Overall marketing objects must be specific and the key performance indicator should be followed in respect of the strategic plans, it indicates total sale, profit, customer service, etc.

Product:

Through this new business venture, the organization will sell the below mentioned products:

Product 1: Organic Herbal Juices

Product 2: Organic Grains

Product 3: Organic edible oil and ghee

Product 4: Organic healthy nutrition

Price:

Price of the products should not be beyond market, it must be justified, more prices do not provide more profit but it decreases the good will of the business. Properties of the enterprise should be summarised to promote greater economic stability. Below the details pricing structure:

Product 1: Average price $50 [10 units]

Product 2: Average price $80 [per 250 gm]

Product 3: Average price $68 [per litre]

Product 4: Average price $120 [per kg]

Place:

Place where the business is to be run should be clear and specific before the establishment of the business concern. For executing each and every plan the budget and timeline of such execution should be realistic and clear, budget for a particular job cannot be neglected and timeline for completion of that work is also very necessary. Through retail shop, products will be placed in the market.

Forming Partnership

Promotion:

Promotion of products is now become one of the most essential things. Customer wanted to know about the products they are supposed to buy before purchasing. Clear information about the organic products should be given to promote the products as well as to attract the mind of the customer, which will increase the sale. Promotion of business plans is also equally important for fulfilling the requirements of the tactic plans. Proper positioning of strategic plans and tactics helps in execution of plans it also shows the areal root of the organisation. A realistic tactic should be adapted in relation to the budget and timeline for a particular aspect.

Forecasting the requirements of human resources

Forecasting human resource needs develops internal ability of the entrepreneur, measuring the business and its functions indicate actual need of human resources. Every enterprise requires employees, without employees, no business can be run. Identification of the exact need of the organisation is very important and then as per the need human resources are engaged in the business.

Employees having good communication skill is required in every business it enhances the scope of development in the communication sector. In every business team work is essential for success, qualified teams should be established for accomplishing jobs within specified time and those teams are to be look after and monitored by concern team leaders and those team leaders are to be monitored by the appropriate management authority. It is to made for each and every employee which will fix the duties of work which is to be discharged by the concern employee. After completion of adequate requirements the work force should be summarised in pro forma style, which can be called as roaster (Refer to Appendix).

Obligations and liabilities of employees should be clearly demonstrated by the competent authority of the entrepreneurship towards the objects and goals of the business. Every team of employees should assign the jobs for whom they are employed and they are expertise. Critical tasks and gaps should be identified and a sense of harmony among the employees has to be established. Improper staff management may lead the business to downwards. A good working policy manual is to be circulated and which should be accepted by the employees (Mondy, Noe & Gowan, 2005).

Identification of risk factors of the business is an essential part of the management. In which aspect more risk is involved rather what kind of business conduct may arise more risk is to be acknowledged very clearly. In organic food business one of the most risky thing is customer preference in respect of the goods. Every business carries risk, in organic product business many kind of risk is involved like insect infestation, change of weather, theft, plant disease alternative products and many more, this factors are to be identified and to be sought out for risk management (Dionne, 2013). Organic farming is quite different from general farming, in organic farming no chemicals or any other artificial article can be used, in this business also risk can be well manageable but it has to be dealt with sensitively. Those factors increasing the chance of risk in the business are to be identified and eliminated. To avoid risks the management authority should adapt risk management strategy and by appropriate implementation with effective execution of the strategy risks can be ignored to a very good extend. Risk management strategies can be well monitored by good staff management, eliminating out of control factors which may cause harm to the business and the most important is evaluation of efficiency of employees.

The Aspire Enterprise is willing to accomplish the target of reaching profit level of at least 20% for this year and which has to be increased in successive years. At this point of time the main target of the company is to restore the previous losses by introducing this new business.

Assumptions:

Year 1 model inputs

1. Year-one revenue expectancy

<Product 1>

<Product 2>

<Product 3>

<Product 4>

Number of units sold annually

2,500

1,500

1,500

1,500

Average sales price per unit

$50.00

$80.00

$68.00

$120.00

Annual revenue per product

$1,25,000

$1,20,000

$1,02,000

$1,80,000

Total year 1 revenue

$5,27,000

2. Year 1 cost of goods sold

       

Expected gross margin per product

60.00%

60.00%

45.00%

30.00%

Annual cost of goods sold per product

$75,000

$72,000

$45,900

$54,000

 

 

 

 

Total year 1 cost of goods sold

$2,46,900

 

3. Annual maintenance, repair, and overhaul

 

Factor (%) on capital equipment

12%

 

4. Number of years for straight-line depreciation

5

 

5. Annual tax rate

30%

6. If long-term debt is being used to finance
     operations, enter the total loan value.

$50,000

Year-by-year profit and loss assumptions

 

Year 1

Year 2

Year 3

Year 4

Year 5

Annual cumulative price (revenue) increase

-

2.00%

4.00%

6.00%

8.00%

Annual cumulative inflation (expense) increase

-

2.00%

4.00%

6.00%

8.00%

Interest rate on ending cash balance

0.50%

0.50%

0.50%

0.50%

0.50%

Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

Gross revenue

$5,27,000

$5,37,540

$5,59,042

$5,92,584

$6,39,991

Cost of goods sold

2,46,900

2,51,838

2,61,912

2,77,626

2,99,836

Gross margin

 

$2,80,100

$2,85,702

$2,97,130

$3,14,958

$3,40,155

 

 

 

 

 

 

Other revenue [source]

 

$0

$0

$10,000

$0

$0

Interest income

 

$1,200

$0

$0

$0

$0

Total revenue

 

$2,81,300

$2,85,702

$3,07,130

$3,14,958

$3,40,155

Operating expenses

Sales and marketing

$50,000

$51,000

$53,040

$56,222

$60,720

Payroll and payroll taxes

25,000

$25,500

$26,520

$28,111

$30,360

Depreciation

40,000

40,800

41,600

42,400

43,200

Insurance

40,000

$40,800

$42,432

$44,978

$48,576

Maintenance, repair, and overhaul

12,000

12,240

12,480

12,720

12,960

Utilities

25,000

$25,500

$26,520

$28,111

$30,360

Property taxes

15,000

$15,300

$15,912

$16,867

$18,216

Administrative fees

2,000

$2,040

$2,122

$2,249

$2,429

Other

4,000

$4,080

$4,243

$4,498

$4,858

Total operating expenses

 

$2,13,000

$2,17,260

$2,24,869

$2,36,156

$2,51,679

Operating income

$68,300

$68,442

$82,261

$78,802

$88,475

Interest expense on long-term debt

2,243

1,791

1,316

817

293

Operating income before other items

$66,057

$66,651

$80,945

$77,985

$88,182

Loss (gain) on sale of assets

0

0

1,000

0

0

Other unusual expenses (income)

0

0

0

0

0

Earnings before taxes

$66,057

$66,651

$81,945

$77,985

$88,182

Taxes on income

30%

19,817

19,995

24,584

23,395

26,455

Net income (loss)

 

$46,240

$46,656

$57,362

$54,589

$61,727

Assets

Initial balance

Year 1

Year 2

Year 3

Year 4

Year 5

Cash and short-term investments

$19,100

$96,291

$1,75,245

$2,64,231

$3,49,245

$4,43,174

Accounts receivable

3,000

3,000

3,000

3,000

3,000

3,000

Total inventory

25,000

25,000

25,000

25,000

25,000

25,000

Prepaid expenses

0

0

0

0

0

0

Deferred income tax

0

0

0

0

0

0

Other current assets

5,000

5,000

5,000

5,000

5,000

5,000

Total current assets

$52,100

$1,29,291

$2,08,245

$2,97,231

$3,82,245

$4,76,174

Buildings

$1,00,000

$1,00,000

$1,00,000

$1,00,000

$1,00,000

$1,00,000

Land

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

Capital improvements

0

0

0

0

0

0

Machinery and equipment

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

Less: Accumulated depreciation expense

0

40,000

80,800

1,22,400

1,64,800

2,08,000

Net property/equipment

$3,00,000

$2,60,000

$2,19,200

$1,77,600

$1,35,200

$92,000

Goodwill

$0

$0

$0

$0

$0

$0

Deferred income tax

0

0

0

0

0

0

Long-term investments

0

0

0

0

0

0

Deposits

0

0

0

0

0

0

Other long-term assets

0

0

0

0

0

0

Total assets

$3,52,100

$3,89,291

$4,27,445

$4,74,831

$5,17,445

$5,68,174

Liabilities

Initial balance

Year 1

Year 2

Year 3

Year 4

Year 5

Accounts payable

$2,000

$2,000

$3,000

$3,000

$1,500

$1,500

Accrued expenses

0

0

0

0

0

0

Notes payable/short-term debt

0

0

0

0

0

0

Capital leases

0

0

0

0

0

0

Other current liabilities

100

100

100

100

100

100

Total current liabilities

$2,100

$2,100

$3,100

$3,100

$1,600

$1,600

Long-term debt from loan payment calculator

$50,000

$40,951

$31,450

$21,474

$10,999

$0

Other long-term debt

$1,00,000

$1,00,000

$1,00,000

$1,01,000

$1,01,000

$1,01,000

Total debt

$1,52,100

$1,43,051

$1,34,550

$1,25,574

$1,13,599

$1,02,600

Other liabilities

0

0

0

0

0

0

Total liabilities

$52,100

$43,051

$34,550

$24,574

$12,599

$1,600

Equity

Initial balance

Year 1

Year 2

Year 3

Year 4

Year 5

Owner's equity (common)

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

Paid-in capital

2,50,000

2,50,000

2,50,000

2,50,000

2,50,000

2,50,000

Preferred equity

0

0

0

0

0

0

Retained earnings

0

46,240

92,895

1,50,257

2,04,846

2,66,574

Total equity

$3,00,000

$3,46,240

$3,92,895

$4,50,257

$5,04,846

$5,66,574

Total liabilities and equity

$3,52,100

$3,89,291

$4,27,445

$4,74,831

$5,17,445

$5,68,174

 

 

 

 

 

 

References

Dionne, G. (2013). Risk Management: History, Definition, and Critique. Risk Management And Insurance Review16(2), 147-166. doi:10.1111/rmir.12016

Foss, N. (2007). Strategic belief management. Strategic Organization5(3), 249-258. doi:10.1177/1476127007079977

Grinblatt, M., & Titman, S. (2002). Financial markets and corporate strategy. Boston: McGraw-Hill Irwin.

McDonald, M. (1999). Marketing plans. Oxford: Butterworth-Heinemann.

Mondy, R., Noe, R., & Gowan, M. (2005). Human resource management. Upper Saddle River, N.J.: Pearson Prentice Hall.

Reddish, A. (2011). Business plan for GitFit Training Fitness services. [Pomona, [Calif.]: California State Polytechnic University, Pomona].

Sitarz, D. (2000). Partnerships. Carbondale, Ill.: Nova Pub. Co.

Smith, T. (2012). Pricing strategy. Mason, Oh: South-Western Cengage Learning.

Tidström, A. (2012). Conflicts in business relationships in light of the external environment.International Journal Of Business Environment5(2), 122. doi:10.1504/ijbe.2012.046203

Woodburn, D., & Wilson, K. (2014). Handbook of Strategic Account Management. Hoboken: Wiley.

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