Professional Documents
Culture Documents
Introduction:....................................................................................................................................1
Objective of the business:............................................................................................................1
Product Concept:.........................................................................................................................1
Business Model:...........................................................................................................................2
Analysis of Market:.........................................................................................................................2
Competitor Analysis:...................................................................................................................3
Customer Profile:.........................................................................................................................4
Unique feature of Proposition:.....................................................................................................4
Marketing and Sales Plan:...............................................................................................................4
Marketing Plan:...........................................................................................................................4
Price strategy:..........................................................................................................................5
Distribution strategy:...............................................................................................................5
Sales Plan:....................................................................................................................................5
Marketing promotion:..............................................................................................................5
Marketing Budget:...................................................................................................................5
Break-Even Analysis:..............................................................................................................6
Operational Plan:.............................................................................................................................6
Logistics and Human Resources:.................................................................................................7
Organizational Hierarchy:............................................................................................................8
Financial Plan:.................................................................................................................................8
Venture Capital Requirements:....................................................................................................8
Working Capital & Profit:............................................................................................................9
Projected Financial Statement:....................................................................................................9
Five Years Moving Forward Financial Plan..............................................................................10
SWOT Analysis.............................................................................................................................11
PESTLE Analysis:.........................................................................................................................11
Political Analysis:......................................................................................................................11
Economic Analysis:...................................................................................................................12
Social Analysis:.........................................................................................................................12
Technological Analysis:.............................................................................................................12
Legal Analysis:..........................................................................................................................12
Environmental Analysis:............................................................................................................12
Conclusions & Recommendations:................................................................................................13
Recommendation:......................................................................................................................13
Conclusion:................................................................................................................................13
References......................................................................................................................................14
Introduction:
Developing new business through entrepreneurship innovation is now considered a key stone to
determine future prospective of an economy. In an economy where entrepreneurship us
encouraged, it is assumed that this industry or economy will not lose its pace in the long run.
Besides industrial growth, employment rate also depends on the degree on encouraged
entrepreneurship business. Business Plan is a vital tool for entrepreneurs. It is considered to a
detailed guideline which directs the entrepreneurs on appropriate and effective steps to be taken
at each stage of their business.
Product Concept:
I have elected the name of my product is as Green Cycle. Cycles will be produced using
mainly cardboard and rubber. No metal and machine will be used in this product as a result the
product will be ecofriendly and in favor of protecting green. So I have decided to call my product
as Green. Its raw material is mainly card-board, rubber and plastic. It is cost effective, user
friendly (Cardboardtech.com, 2016) and have some attractive features, like
Lighter Weight
Folding Body Frame
Waterproof
User-friendly
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Attractive Looking
Cost Effective
Portable
Business Model:
A business model is a description of method, process through which a business can make money
(Carsrud and Brannback, 2007). A brief business model of my proposed business is presented
here:
Name of my business will be Green Cyclist Industry and it will be established under sole
proprietorship business contract. All the required will be collected from owners capital.
Primarily target area is only Birmingham City. Target customer is the teen-agers, young peoples
and babies. But baby cycle will be added in later time.
Cardboard
Cycle
Sole
Proprietorship
business
35% Profit
Per Unit of
sales
Green
Cyclists
Industry
Young
People, Teenagers and
Children
Sales in
Birmingham
Analysis of Market:
I have decided to establish my new business only in Birmingham City. As it is a new business
and my venture capital is limited, so I have decided not to go mass production from the very
beginning. I will consider business expansion in later time when circumstances demands.
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Recently Bike industry in UK has faced tremendous growth due to increasing demand of bike
riding (Sba.gov, 2016). Consciousness to protect environment has made the peoples to incline
towards bi-cycle (Businessballs.com, 2016).
I have noticed that all the products provided by our bike industry has become monotonous and
identical (Kapila and Mead, 2012). All of the companies provided similar types of products with
a very little customization. Besides they have little concern about environmental protection. For
this reason I have decided to offer such a product through which I can address this gap in the
industry. I am going to offer such a product which will satisfy the core demand of the customer
and will also meet the environmental concern. I have already mentioned some of the unique
characteristics of my product. Cardboard cycle will be lighter than usual bi cycle in the market
and thus it can be carried anywhere easily. On the top of that it can be folded into two parts,
consequently young children can carry this cycle in their backpack. The core difference of this
cycle from a typical one is that it is fire and water proof. These distinctive qualities will make it a
more attractive one. So analyzing all of this opportunities I think my product has greater
possibilities to acquire market demand.
I already had a discussion with cardboard producer or supplier like Jaffabox, Box & Seal,
Cardboard Box Company, Saxon Packaging (Kuratko, 2006) and entered into a contract to
receive supply from them.
Competitor Analysis:
In Birmingham, four companies are competing in bi-cycle industry; these are: Birmingham
Bicycle Company, Bike Link of Hoover, Cahaba Cycles Birmingham, Zyp. Products of these
companies offer almost similar type of products. A brief illustration will help to understand the
circumstances. All these companies categories their product line based on customer age,
variation in customer needs, speed and the nature of its uses (Mourad et al., 2007). For example
they offer 12 inch bikes for children, mountain bike for racing, touring bike for riding, ladies
bike for woman etc. But all have ignored the fact of environmental concern (Practical business
planning, 2008). They are not offering product having a completely new perspective. Producing
cycle using is a new idea in this industry. Their product is subjected to fire and water, and cannot
be carried easily anywhere. But as I have already mentioned my product will offer these two
unique qualities. So having a new product innovation is my strength in this industry. New
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concept will be my competitive advantages among the competitors (Schilit, 2013). Besides price
of my product will be offer much lower than that of my competitor. As a strength of my
competitor their experience, vast product line can be mentioned. I will face difficulties to grab
market where already they four have made a room for several years.
Customer Profile:
I have segmented my target customer from two different perspective, age based segmentation
and income based segmentation. I have offered my product at much lower price than of my
competitor. So peoples who have limited income can easily afford a bike. On the other hand, I
will also offer differentiated bike with customized design. I have kept an option of called as My
Bike My Styles. Under this facilities customer can make their own design for their bike and can
submit in our website. I will produce bi-cycle for them with their own respective design and will
charge a higher price for customization. So through this I will target who love dainty products. In
case of age segmentation I have targeted babies mainly those who are below the age of seven and
also teenagers.
Price strategy: The most attractive feature of my product is price. I will offer the bi-cycle
at less than half of the lowest market price. It will be very feasible for students of school, college
and university. Consumers can order cycle from website, Facebook page and through e-mail. I
also offer home delivery service for Birmingham city with a reasonable service charge.
Distribution strategy: I have decided to go for intensive distribution of products to
occupy retailer as many as possible. So I thought three types of distribution channel for my
products.
Dealer/agent: I will appoint at least one dealer/agent in Birmingham City. Application
would be offered for dealers. Dealers will be selected according to their show rooms location,
size of show room, financial condition and conditions they offer. In this case dealers will be
allowed to sell products of another companies also.
Direct sell: I will establish show room in Birmingham in order to sell directly to
customers.
Online: Customers can place order online through the company website. Cycle will be
reached to them in exchange of service charge and transportation cost.
Sales Plan:
Marketing promotion: A large portion of promotional plan is online based. For market
promotion I would like to use social networks that include Facebook, Twitter, Google+ etc. I will
also use poster, banner and newspaper for advertisement. Additionally, I would like to convince
health and environment conscious groups for supporting me. One of the famous cyclist group in
UK; The Cyclists Champion and British Diabetic Association has already agreed to
promote my product. To attract customers, I will offer a safety lock free with every cycle sold for
the first two months of production. I will also offer 1 year after sell customer service.
Marketing Budget: I have conducted a strong marketing and financial plan. Financial plan
for managing marketing costs will be discussed in this section.
Cost (Per Cycle)
Expected
GBP
0.49423
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4.31328
Salary (Administration)
0.790768
Utility Costs
5.598278
Total Fixed Costs
Raw materials and Variable Costs
Production Costs
8.986
Raw Materials
Labor Costs
2.51608
Workers Wage
0.8986
Utility Cost (Production)
12.40068
Total Variable cost
17.998958
Total Cost of Production (Per Unit)
Break-Even Analysis: I have conducted pilot study to predict the market demand. My
study revealed that, I will have demand of almost 1440 unit of bicycle in the first year. I have
low leveraged cost structure which will be helpful to achieve break-even point within quickest
time frame.
Break-Even Point
(unit)
Fixed
Cost
(Selling
price
Variable
cost)
10080
(28
18)
1008 units
So from the table it is obvious that I need to sale almost 1010 unit of my product to achieve
break-even. According my pilot study I would be able to reach in this target within almost end of
the first year.
Operational Plan:
As already mentioned, the business will be established under the framework of sole
proprietorship, so it is not required to be registered with any regulatory authority. I will collect
trade license from Birmingham City Council in this regard only.
Production process includes three stages:
Gathering of raw materials: I will use mainly cardboard sheets, plastic and rubber for our
production. These raw materials are abundant and biodegradable.
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Primary
Gathering of
raw materials
Secondary
Transformatio
n of raw
materials into
goods
Tertiary
Provisions of
goods to the
customers
Transformation of raw materials into goods: By the following process the goods will be
produced:
knife
In this stages all the components for the bike like body, wheels, handle bars are put
rubber
Finally a secret mixture of chemical blend has been produced, which will be applied on
the frame of cardboard so that color can be coated later.
I have kept an option for adding motor in the cycle. In this case price will charge higher than
typical cardboard cycle.
Provisions of goods to the customers: Finally cycles will be supplied to the customer through
the distribution channel.
One manager.
Two supervisors
Twelve labors.
Two salespersons.
7|Page
Organizational Hierarchy:
Entrepreneur
s
Administrati
ve
Department
Sales
Department
Body Making
Production
Department
Wheel
Making
Accessories
Assembly
Financial Plan:
Financial plan includes analyzing venture capital and working capital, preparing financial
statements, growth rate projections for profit and sales, selling price and many more (Wessner,
2009). Some of the main elements will be discussed in this segments.
Expected
GBP
494.23
1950
898.6
-Hydraulic Jack
-roller
-Paper Cutting Knife
-Compasses and other tools
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-Hammer
-Miscellaneous cost
1347.9
Decoration of Outlets
808.74
8986
Advertisement Cost
2605.94
17091.41
10
28
Total Cost
10080
22322
18000
50400
Sales (28X1440)
Less: Cost of Raw materials
Amount in GBP
(Expected)
Amount in GBP
(Expected)
40320
6469.92
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33850.08
4528.944
Workers
6146.424
27703.656
Gross Profit
Less: Administrative Costs:
Salary of Managers
Salary of Salesmen
Salary of Supervisor
Total Salary
7548.24
1078.32
Utility Cost
808.74
Decoration of outlets
431.328
494.23
Total Administrative Cost
10360.858
17342.798
Year-2
1440
1526.4
28
28.84
5.6
5.712
12.4
12.772
Year-3
Year-4
1617.9
84
29.705
2
5.8262
4
13.155
16
1715.0
63
30.596
36
5.9427
65
13.549
81
Year-5
Growt
h Rate
1817.9
6.00%
67
31.514
3.00%
25
6.0616
2.00%
2
13.956
3.00%
31
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Total Sales
40320
Total Cost
25920
Profit
14400
Profit
Growth
Rate
44021.37
6
28213.97
76
15807.39
84
9.77%
48062.
54
30711.
6
17350.
94
9.76%
52474.
68
33431
19043.
68
9.76%
57291.
85
36391.
93
20899.
92
9.75%
SWOT Analysis
Before launching a venture or merely a product, it is necessary to analyze the market. It is also
important to evaluate the possibilities and weakness of the product or the business. SWOT
analysis is a strong tool in this regard. I have analyzed the Strength, Weakness of my venture.
Opportunity and threat which we may face have also the subject of my concentration.
Strength
Sufficient lower cost
Availability of raw material
No direct competitor
Opportunity
Pioneer industry of
Birmingham
Capturing a large market
Weakness
Lack of experience
Lack of trained employee
Moderate Speed
Threat
Achieving consumer's
confidence.
Lack of assistance by
stakeholders.
disposal.
Some of the points are need to be discussed here for further clarifications. As it is new business,
as like the product concept. I will face problem of having skilled and experienced employees.
For this reason I may face problem of developing my product. But this difficulties will be
outperformed by the proper arrangement of trainings. It will be discussed in detail in later
sections.
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PESTLE Analysis:
Political Analysis: As we know, we are in a country which enjoys political stability for long
since. So from this perspective my new venture will not face any political instability.
Economic Analysis: Recent statistics in Bi-cycle industry in Birmingham shows that, they all
have upward slopping profit curve. On the other than my new business venture requires very
lower production cost and its selling price is not also very high. So I expect that this venture will
be economically viable. For further analysis, financial plan of this paper can be seen.
Social Analysis: I have started this venture thinking the social need of our economy. Recently
citizens become concerned about environmental protection. I have targeted this motto of the
society. This product will contribute positively in society by reducing pollution.
Technological Analysis: As already discussed that, the production process of this cycle does
not require intensive technology. So it is obvious that it is very unlikely that the product will
become obsolete.
Legal Analysis: This business venture will be established by following all the established state
and federal laws. Besides federal government offers concession for the business working over
environmental protection.
Environmental Analysis: Core raw materials of my product is card board, plastic, rubber
which are not detrimental to environment. So targeting this environmental concern, I wish to get
the concession form the government.
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Conclusion:
The business plan presented here is to produce a bicycle made of cardboard. It is water proof and
fire proof and can be kept folded which will make it more attractive for users. So this product is
more unique than other typical bicycle. The target market is primarily Birmingham City. This
cycle is more preferable for urban areas. Initially selling program in Birminham City will solely
be controlled by the business itself. There is availability of raw material, sufficient lower cost
opportunity, no direct competitors. I have targeted kids, teenager, and young generation as
potential customers. Through market analysis I expected that the demand for this product will be
upward moving with time. I am also expecting 20% growth rate for next three years. The most
attractive feature of the product is price. I will offering our bi-cycle at less than half of the lowest
market price. So I expected that I can be the lowest cost producer in bicycle in the Birmingham
City. Through SWOT analysis I found more strength and opportunity than weakness and threats
in this prospective business plan. If all the expected circumstances remain constant, I can expect
14 | P a g e
that the business plan is to produce cardboard bicycle will be successful and able to meet demand
of the prospective customers of Birmingham City.
References
Cardboardtech.com. (2016). Cardboard Technologies Cardboard is the new Green.
[online] Available at: http://www.cardboardtech.com/ [Accessed 16 Jun. 2016].
Carsrud, A. and Brannback, M. (2007). Entrepreneurship. Westport, Conn.: Greenwood
Press.
Connick, W. (2016). How to Write a Sales Plan. [online] National Association of Sales
Professionals (NASP). Available at: https://www.nasp.com/article/9B32E566-7CE5/howto-write-a-sales-plan.html [Accessed 16 Jun. 2016].
Letsmakeaplan.org. (2016). Financial Planning Process | CFP Let's Make a Plan.
[online] Available at: http://www.letsmakeaplan.org/other-resources/financial-planningprocess [Accessed 16 Jun. 2016].
Finney, R. (2010). Office finances made easy. New York: AMACOM.
Sba.gov. (2016). How to Write a Business Plan | The U.S. Small Business Administration
| SBA.gov. [online] Available at: https://www.sba.gov/starting-business/write-yourbusiness-plan [Accessed 16 Jun. 2016].
Businessballs.com. (2016). how to write a business plan, sales plans, marketing strategy,
free
templates,
examples,
samples
and
techniques.
[online]
Available
http://www.businessballs.com/freebusinessplansandmarketingtemplates.htm
at:
[Accessed
16 Jun. 2016].
Kapila, S. and Mead, D. (2012). Building businesses with small producers. London:
ITDG Pub.
Kuratko, D. (2006). Corporate Entrepreneurship. Foundations and Trends in
Entrepreneurship, 3(2), pp.151-203.
Mourad, A., Garcia, E., Vilela, G. and von Zuben, F. (2007). Environmental effects from
a recycling rate increase of cardboard of aseptic packaging system for milk using life
cycle approach. Int J Life Cycle Assess, 13(2), pp.140-146.
Practical business planning. (2008). Long Range Planning, 21(3), p.113.
Schilit, W. (2007). How to write a winning business plan. Business Horizons, 30(5),
pp.13-22.
Sinclair, S. (2013). Pricing. Journal of Business Strategy, 14(3), pp.16-19.
Stinson, P. (2008). Sales, marketing, business and finance. New York: Ferguson Pub.
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