Business plan

Dewhurst unit 8
Highgrove Industrial Park Coventry CV1 2 AJ Phone:0247690000 Fax :0247691111 E-mail Shah@Dewhurst.com Web site:http// www.Dewhurst.com

Table of Contents
1. Summary................................................................................................................................3 2. Business overview ................................................................................................................4 Introduction ........................................................................................................................4 Current position..................................................................................................................4 Competitors ........................................................................................................................4 Competative advantage .....................................................................................................5 Growth plan ........................................................................................................................5 3. Business strategy ..................................................................................................................5 Aim......................................................................................................................................5 Objectives ...........................................................................................................................5 Market size and growth ...................................................................................................5 4. Marketing...............................................................................................................................6 SWOT Analysis .................................................................... Error! Bookmark not defined. Market research .................................................................................................................6 Distribution channels..........................................................................................................6 Strategic alliances ...............................................................................................................6 E-commerce and technology ..............................................................................................6 Advertising and promotion strategy..................................................................................7 pricing strategy ...................................................................................................................7 Product strategy .................................................................................................................7 Marketing budget ...............................................................................................................7 Credibility and risk reduction .............................................................................................7 5. About the business ................................................................................................................7 Premises .............................................................................................................................7 Equipment ..........................................................................................................................7 Key people and Job functions ...........................................................................................8 6. Team and management structure .......................................................................................8 Background detail of key people ........................................................................................8 Management systems ........................................................................................................9 7. Financial highlights ........................................................................................................... 10

2|Page

1. Summary
Dewhurst Engineering ltd has established a strong foothold in engineering technology components. The current market demand for high quality and innovative engineering components is unsatisfiable and the business success in taking advantage of the ever changing engineering world is proof of is success . The company's customer base is expected to grow from 30 to 60 in the year 2013 yielding a turnover of about 540,000.00 causing before tax profit to rise significantly by the end of the year 2014 These figures will be reached without any edition to fixed assets Financial highlights 12 Months to 31 March 2012 Turnover: 187,380( excluding VAT) Profit: 18,380, after tax This amount represent a 45% on the invested 50 000 Break-Even =approx Turnover 153.800 NB: all wage costs are fixed other than overtime If wage cost are treated as variables the break even drops to 116,300 Funding requirements The business is offered for sale at 50,000.00 it is not represented in the cash flow as it will be used to purchase shares from the present owner Sources of Funds 3,000 own money 20,000 loan for 10 years , plus overdraft facility of 15,000
. .

Objective While working to develop Dewhurst engineering as the main supplier of engineering components .The measurable objectives are 1. From year 2012 to 13 increase customer base from 30 to 60 2. From year 2013 onwards customer base to increase to 90 and prepare to l launch business nationwide.

3|Page

2. Business overview
Introduction
The business specialises in the provision of high quality and high added value engineering work for technology based companies in and around the west midlands. The work I provided is usually for prototypes, one-off projects or specialist requirements. Established in 1972 and is now offered for sale. The business is being offered for sale together with its customer base .The reason for the sale is the owner is retiring due to ill health. There are three fulltime shop floor employees plus one part time secretary bookkeeper Dewhurst unaudited accounts for year ending 2012 show a turnover of 140,000 and a net profit of 10,000. The company is offered for sale as a going concern for 50,000.

Current position
The company so far provides engineering technology to 30 out of 250 companies in west midlands. It is currently in the growth stage as shown in fig 1 below

Concept & Start up Turnover/Profit

Growth

maturity

Decline

Rebirth

2012 1982 Death

YEARS IN

BUSINESS

FIG 1

Profits and turnover achieved for the past trading years For year ending March 2011 : Turnover 187,000 after tax profit 18,000 For year ending March 2012: Turnover 270,000 after tax profit 30 000

Competitors
There are a few direct competitors in the area who offer the same services. Most of them offer batch or production line engineering work in order to warrant their machinery. The major competition comes specifically from in house facilities by customers.

4|Page

Competitive advantage
No direct competition in the area

Growth plan
The business is located to close to companies and organisations involved in R&D or design and manufacturing. Their speciality is welding technology, printing technology and new product development. The business growth is to become a main supplier of specialist engineering service and technology in the United Kingdom. The plan is to double the customer base to a least 60 in the West Midlands within one year.

3. Business strategy
Aim
Double customer base to in one year and for the next 3 -5 build a customer base nationwide (United Kingdom)

Objectives
For the year ending 2013: Turnover 540,000.00 after tax profit of 60,000.00 For the year ending 2014 Turnover 830, 00.00 after tax profit of 90,000.00 The turnover and profit figures are based on increment in customers base from 30 to 60 in 2013 and 60 to 90 in 2014

Market size and growth

An estimated 250 technology based companies operate within a 20 mile radius of the business current location. The business currently deals with 30 .about 230 remaining are potential customers

5|Page

4. Marketing
SWOT Analysis
Business strength Good reputation for producing high quality work High level of repeat work High level of service provision Competent and loyal workforce Business weakness Owner has left things drifting during illness lack of a proper sales and Marketing plan poor management techniques

Market research
According the chamber of commerce directory there are about 250 technology based business in West Midlands all these include major car manufactures . These businesses all use engineering consumables. If the business is able to get half of the local customers then it will make the company more profitable. The research has made the business to be aware current customer requirements and market conditions

Distribution channels
so far the business is local to the west midlands , most of the customer are reached through email and recommendation from our current customers . In the near future we intend to build the company brand throughout the united kingdom by intensive marketing and probably opening branches in countries in the united kingdom

Strategic alliances
There is no strategic alliance in place so far but the business is planning to increase access to the market since there is high potential if being a successful

E-commerce and technology

The business has a website which is open 24/7 , customer can submit their order specification anytime of the day. So far we are only limited to emails in accessing new markets. More emphasis is to be put in on proper selling techniques

6|Page

Advertising and promotion strategy

Promotion has been the main personal selling point. Last year the business relied heavily on repeat business from existing customers. Personal visits will be reinforced by direct mail to generate new business. The intention is mail a minimum of 20 companies per months which should result in 10 visits hoping to gain 3 new customers

Pricing strategy
The components are a small part of the total product cost and therefore not subject to Intensive price scrutiny. Currently pricing is based on cost +: a standard hourly labour charge + cost

Product strategy
develop a product that is highly innovative and be able to meet the needs of the 21st century engineer . It must also meet industry regulations

Marketing budget
In the first 12 months the marketing budget has been estimated at 12000 this will cover Advertising costs in magazines Mailing Purchased or the sales and purchasing of the mailing list Postage related to mailing list In addition 1800 has been budgeted for posting and delivery costs

Credibility and risk reduction

A forum about the business product will be created linking to website that have written positive stories ,this will increase credibility of the business Business intends to join online business associations Let customers know anything about the business

5. about the business

Premises
Premises are leased from the city council a few miles from the city centre. Operation is carried on 1000sq foot. The lease with the city council runs up to the end of 2015 at a cost of 6400 pa. It is anticipated that the rent will increase by 50% by the end of the year

Equipment
Existing: Equipment
7|Page

Quantity

Lathes Milling Machines Gear Sharpers Gear Hob Milling Machine Horizontal Surface Grinder Van Various other low value machines

2 2 1 1 1 1 1

All equipment is fully paid other the milling machine on which payments finishes this year no new machinery is needed this year.

Key people and Job functions

NAME N shah M Young J Goody B Johns S Brown

JOB FUNCTION Managing Director : Responsible for sales and production Foreman Shop floor worker shop floor worker Secretary /Bookkeeper

6. Team and management structure

Background detail of key people
N Shah Age 38 formerly a production engineer at hunting engineering and also a customer of Dewhurst .Shah has 17 years of experience in the engineering industry , started as a tool maker and worked up from the shop floor Shah has more experience and contacts in the industry. N Young Age 47 Trained and qualified toolmaker and foreman and has been with the company for 12 years

8|Page

J Goody Age 38 Trained and qualified toolmaker and has been with the company for 15 years B Jone Age 43 Trained and qualified instrument maker and has been with the company for 2 years S Brown Age 27 Secretary /bookkeeper she has been with the company for 24 years

Management systems
The business structure is organised in a hierarchical model, this means all decision follow a top to bottom model. There are a set of employee code of conduct that should be adhered to. Staffs is required to observe house rules and there is a health and safety system in place At the moment we operate a traditional accounting system and financial reports are produce once every six months

9|Page

7. Financial highlights
12 Months to 31 March 2012 Turnover: 187,380( excluding VAT) Profit: 18,380, after tax This amount represent a 45% on the invested 50 000 Break-Even =approx Turnover 153.800 NB: all wage costs are fixed other than overtime If wage cost are treated as variables the break even drops to 116,300 Funding requirements The business is offered for sale at 50,000.00 it is not represented in the cash flow as it will be used to purchase shares from the present owner Sources of Funds 3,000 own money 20,000 loan for 10 years , plus overdraft facility of 15,000
. .

10 | P a g e