Introduction & Brief Description of Business
Entrepreneurship allows for the opening of new businesses bringing about jobs for the people in a community and revenue that benefits not only the business but also taxes for the city and the state. Entrepreneurs usually take advantage of processes to enable their success in business to include lean experimentation that allows for the resolution of risks speedily and with minimum resources thereby allowing for testing of a business model; the enactment of investing which permits the entrepreneur to confront risks in order of importance thereby having the ability to use only the resources that are needed to meet planned objectives which lead to the achievement of new objectives; joining with other entrepreneurs to control their businesses’ resources placing each business in a better position relevant to resources, costs, and risks; and lastly with entrepreneurs having a clear vision, with each one having a story to tell that makes a positive contribution to the world of entrepreneurship (Eisenmann, 2013).
Buster’s which is an all-purpose store that is located on the bottom floor of Madison Executive Suites has been in business successfully for 4 years. The customers are the employees that work within this business building. There are a total of 20 floors with approximately 1,200 employees who work in the offices five days a week. Some of the employees arrive for work by 7am. This is the time that Buster’s opens each day Monday through Friday.
Business Description
The purpose of a business description is to allow the reader to understand what the business is about, what the business sells as well as the importance of the business. This information is vital especially to those who may be interested in investing in the business. This information also assists the owners and employees in having a clearer understanding of the business.
Buster’s is a small store that is located in the lobby of Madison Executive Suites building and has been in business for four years. The employees who work in the many offices in this building visit the store on a daily basis buying everything from coffee to sandwiches. These are repeat customers that the owner has been able to build a relationship with learning their likes and dislikes relative to the items sold at this location.
Business Aspirations
Business aspirations are based on the businesses’ mission statement, vision, and company values. This information allows the business to define priorities relative to its business processes. It also assists the organization to stay focused on business objectives.
Buster’s mission statement is “To ensure that each customer receives prompt, professional, and courteous service each time and every time”. The vision is to become one of the best small businesses offering products to office employees. This is the goal of Buster’s.
The long range ultimate goal of Buster’s is to expand becoming a chain of 10-15 stores that will be situated in the downtown office buildings; however, the short term goal is to open another Buster’s in the Madison Executive Suite Building 2 which will be opening within the next 3 months. This will be a good location with a flow of steady customers that will enable the success of the business.
Organization of the Business and Key Players
It is always important to remember that the organization of a business is key to the success of the business. This includes an understanding of the business as well as the processes that are necessary to ensure continued business success. Part of this process is managing the external environment which involves the owners/managers understanding the importance of the city and state rules and staying aware of any changes to ensure that the business is in compliance.
Open communication is a major role in not only managing the business but also in the operating of the business. Employees must be informed of any changes within the business and must also share any information that they have that could be of benefit to the business. Management must also understand the importance of responding to any problems that are communicated to them. This will enable adjustments to be made if needed quickly as well as easily.
Another process that will aid in successful business organization is the ability to balance the work schedule and the employees. Any business that attempts to be in business without being organized and practicing good management relative to employee work schedules will fail. This process also involves the daily tasks and responsibilities that enable the business to be successful in its daily operations.
Management and the employees should work as a team. In this manner everyone is working together thereby increasing productivity and efficiency of the business. This is one of the best ways to ensure the continued success of the business.
Working together as a team allows for the controlling of conflict which can only be eliminated when the employees understand each other and are open to discussion. One of the measures of the success of an organization is that everyone is comfortable in the working environment with an understanding of the policies and procedures that are relevant to the business.
Structural issues include the business being organized with an understanding of the competition, technology, the environment, the customer, the economic environment, growth, and strategy. Other structural concerns include the employees being placed in the right positions and having measureable results which can be used to ensure that employees are given raises and/or bonuses based upon performance. All of the processes enable a business to be organized in a manner that is beneficial to the business, the employees, the customers, and the community.
Jonathan Jordan and Margaret Jordan are the owners with Margaret Jordan being the manager of the store. The store has three employees (Casper Windom, Eleanor Johnson, and Peter Wingate) who work 30 hours each at the store. The manager at the proposed store will be Jonathan Jordan. These are the key players who aid in the success of the present store.
It is important for everyone within the business to understand the roles and responsibilities of each team member within the business. Clarity of roles allows for a clear understanding of the tasks that are to be performed within the business. This roles start with the owners of the business.
Jonathan Jordan was a manager at Starbucks in Colorado Springs, CO. He started in the position of assistant manager and became the manager after 2 years. He managed the store for 6 years before opening Buster’s. He has a Bachelor’s Degree in Business Management and a Master’s Degree in Operations Management.
Margaret Jordan was an Executive Assistance for Nordstrom’s in Anchorage, AK for 5 years. She met and married Jonathan Jordan and moved to Colorado Springs, CO. Margaret has a Bachelor’s Degree in Business Administration.
Company Legal Structure
It is important for the owners of a business to evaluate the legal structure of the business to ensure the safety of the business. Using legal protections will keep the business from being placed in jeopardy. A sound legal structure will protect not only the business but also the business assets as well as the employees. This is one of the main reasons for having a legal framework in place thereby ensuring that the business is protected at all times.
It is the responsibility of the owners to make decisions that include taking legal actions to structure the business. Without this process, the business owners could enable detrimental business processes. Even if the business never has the need to use legal help, it is important for that help to be in place just in case there is a need.
Buster’s is a limited liability company (LLC) which is a separate and distinct legal entity. This means that the company has a tax identification number and a bank account in the company name for doing business (Legalzoom, 2016). The reason for the choice of the business being an LLC is that the owners (Jonathan Jordan and Margaret Jordan) have limited liability meaning that they are not personally liable for the debts and liabilities of the LLC. An LLC is flexible, scalable, and simple and allows the business owners to maximize the operation of the business.
Management Team – Roles and Qualifications
Roles and qualifications are necessary for a business as this is a process that enables the focusing and systematic discussion about processes that are related to the actions that are needed to be performed by the employees. The role conception is based upon what the employee thinks about the job. Those thoughts will influence how the employee performs the role.
Role expectation is defined as what others within the business think the person is responsible for and how those tasks should be performed. It is possible for other people’s ideas of how the position is to be performed to be sometimes influenced by the wrong information; however, the role expectation is most often performed on the output of the results that are expected from the role (Smith & Erwin, 2016).
Role behavior is concerned with what the person actually does when doing the job. These are responsibilities that dictate how an individual views the role for which she/he is hired. This is also an important aspect relative to overall job performance.
Jonathan Jordan and Margaret Jordan are the owners of Buster’s. Jonathan holds the position of Senior Manager and Margaret holds the position of Store Manager. These two people work together as the management team and are also training Eleanor Johnson to become assistant manager.
Employees – Roles and Qualifications
Casper Windom, Eleanor Johnson, and Peter Wingate are the only employees at Buster’s and work 30 hours each week. Casper has the responsibility of ensuring that all items are ordered and stocked within the store. Due to the large volume of customers, this is a vital position. Should Casper find that there will be a shortage of an item during the day, he has the responsibility of buying the items from the nearby Sam’s Club to avoid shortages. Casper has worked at Buster’s for 2 ½ years and is a college student pursuing a degree in Business.
Eleanor Johnson has been with Buster’s since the store opened. She is responsible for sales and works the cash register. She also talks directly with the customers and stays abreast of what is liked and disliked in the store. She relays this information to the store manager to ensure that customer needs are met. She is now in training to become the assistant manager. Eleanor has been employed by Buster’s for 4 years and is also attending college to earn her Master’s Degree in Executive Leadership.
Peter Wingate handles catering within the offices. Whenever there are office meetings on site and away from the site Peter is responsible for the set-up of these events. This position started as a part-time position working only 15 hours a week; but now with the building having 98 percent occupancy, there are more meetings and lunches; therefore, Peter is also working 30 hours a week and started with the company 6 months ago. Peter is a part-time student pursing a Bachelor’s Degree in Engineering.
Contactors/vendors
The contractors and vendors used by Buster’s comply with the Standards for Suppliers Manual that has been established by Buster’s with the latest being the 3rd Edition published in February 2016. Within this manual are the rules and regulations that must be obeyed for all contractors and vendors to include management system and commitment which contains guidelines relative to food safety policy, management responsibility, product complaint handling, and corrective handling; equipment, maintenance, environment control, pest control, supplier approval and performance monitoring, and HACCP (Starbucks, 2014). These are guidelines to ensure that the contractors and vendors deliver goods that are of the best quality and that deliveries are made on time.
Financials
Financials are an important part of a business as this knowledge reveals information that investors and creditors need to know to determine financial performance. It is also important to note that different financial statements bring attention to different areas that are concerned with financial performance.
Financial conditions are of great concern to investors and/or creditors as capital providers’ view this information to make decisions based on the safety and profitability of their investments. This is a process that provides detailed information concerning the businesses assets. The balance sheet will reveal outstanding debt as well as equity components so that the investors can understand the businesses’ capital mix which will affect their decision to assist the company financially (Way, 2016).
Cash flow is another aspect of business financials. This information is listed on the income statement revealing accounting income and non-cash elements that provide no direct information relative to the company’s cash exchange during a period. But a company also incurs cash influxes as well as expenditures during a period from other non-operating activities that include capitalizing as well as financing. When investors review this information, their concern is not just accounting income from operations but the exchange of cash between the business and the outside world during a specified period thereby allowing the investors to see if there is enough cash made by the business to pay for expenses as well as asset purchases (Way, 2016).
Other information that is contained within financials is shareholders’ equity which reveals the changes in numerous equity mechanisms to include retained earnings during a specified period. The amount of shareholders’ equity reveals the businesses’ total assets minus the total liabilities which represent the businesses’ net worth (Way, 2016).
This business plan contains information that is relevant concerning the financials of Buster’s. But a business plan is basically conceptual until the numbers and terms are completed. This part of the business plan is the compiling of the financial forecast that will simply outline the business plan financially. (Wasserman, 2016).
Anticipated Operating Costs
Anticipated operating expenses for Buster’s include rent, phone and utilities, equipment costs, fixtures, inventory, leasehold improvements, licenses and tax deposits, marketing budgets, professional services, payroll, and insurance. Please see the excel chart below to see the anticipated operating costs for Buster’s 2nd location in numbers.
Anticipated Investment Requirements
This includes furnishing facilities, inventory purchasing, and meeting payroll during the first six months of operations. This amount equals $56, 670.00. There is also the desire to have a 20 percent reserve which would be $10,734.00. These are figures that were derived from using ½ of the grand total of anticipated operating costs.
Anticipated Revenue
The monthly anticipated revenue is projected to be at least one-third of the lowest monthly income of the present Buster’s location. The months of June, July, through mid-August show the lowest monthly income as employees are taking vacations or extra time off because of children being out of school. Anticipated revenue is $15, 200 each month for a total of $182,400.00.
Pro-Forma Cash Flow Project for First Year of Operation
Pro forma is representative of the cash flow that can be the projected amount of cash influxes and discharges expected in one or more forthcoming periods. Another effective point of this information is that it is useful for approximating cash shortages in the immediate future; therefore, management can prepare by gaining extra equity funding to offset of the anticipated deficit. A plan is being considered to put in place for disbursement discounts to avoid future cash norms (Accounting Tools, 2016). Please review the Pro-Forma Cash Flow Chart below:
(Business Plan Store, 2016)
Payback Point
The payback point is April 2017. This is a process that is also associated with the payback period which is designed by counting the number of years that it will take to recuperate the cash that has been financed for a project.
Anticipated Return on Investment from the Perspective of Three Years into the Venture
Return on Investment is a financial metric for evaluating the financial consequences of individual investments and actions. Buster’s is very much concerned about this aspect of the business because of understanding the advantages of Return on Investment. The ROI is a better measure of profitability of the business based on present operations (Aarwal, 2016). A cost benefit analysis allows the owners to find out the rate of return that can be expected from different investment proposals, i.e., the expansion of the business at another location.
The owners will use Return on Investments to ensure goal congruence between the different locations because any increase in divisional Return on Investment will enable the improvement in the overall Return on Investment of the entire business. A comparative analysis will also be performed as the Return on Investment enables in the making of the comparison between business units relative to profitability and asset utilization. This is a business area where Return on Investment is a very good measure because this information can easily be used to compare business units relative to cost of capital that will enable the business owners to view continued expansion of Buster’s locations within the downtown area (Aarwal, 2016).
Marketing/Sales
There are advantages to expanding a business with marketing and sales playing a major role in the success of that expansion. One of the advantages is the opportunity to staff the new business with qualified people who can assist the owners in growing the business. This is of great concern because having the right people in the right positions will enable Buster’s to streamline business processes while also bringing in fresh ideas that can assist the company in growing the business.
Another benefit is gaining a broader customer base. The new office building will have new businesses with employees who will stop by Buster’s for coffee and other beverages, sandwiches, snacks, and pastries. Ensuring the quality of purchased items will mean repeat customers thereby enabling the business to be profitable. There is the need for a strategic marketing sales strategy.
Summary of a Marketing/Sales Strategy
The marketing/sales strategy will begin with the target market developing a solid plan that is practical with short-term action plans that will enable the business to move in the right direction. One benefit of the plan is the fact that Buster’s will be located on the ground floor with customers having quick and immediate access to the business. This is a great for the sales end of the business.
The next step is the devising of the direction and image of the business with an understanding of the business goal. The plan will be clear as the plan will be to secure a loan via the Veteran Credit Union. The credit union will be most interested in viewing long term plans thereby having the ability to see the success of the plan.
The next part of the plan is the branding of the business thereby projecting the positive image of the business to the target audience. This is one of the most important aspects of the business with the marketing team and sales team working together. This enables the successful strategy of the plan.
Marketing/Sales Requirement for the Business
The marketing and sales requirements for the business have been created based upon the vision, mission, and business goals as these are these items outline the steps that will be taken to achieve the goals. The marketing strategy affects the way the owners will run the entire business; therefore, the plan must be effective in assisting the business in meeting its goals.
Prices of goods/services
A business must be wise in setting prices for goods and services as the setting of pricing will be an implication of the business. It is also important to note that not every price that is set will maximize margins especially if prices need to be set to compete with competitors as this type of pricing will change market share or could possibly create different revenue consequences.
Profit margins deal with the price that has been set based on the individual unit. This means that higher prices will give a higher profit per item but this only occurs when the item is actually sold. There is also the possibility that higher sales can lead to lower prices based on competition. Overhead costs are also a factor in this process.
Sales volume affects pricing. There is the possibility that an increase in price will lower sales volume to a small degree which will assist the business in making up for decreased volume with higher total profits that can be generated by higher margins. On the other end of this spectrum is the fact that lowering prices can increase profits if the sales rise greatly, with the decreasing of overhead expense based on the individual unit. There is also the possibility of testing this via a market test to see if the process will be successful before implementing this change (Ashe-Edmunds, 2016).
Market share is also deals with pricing as the price is set to enable successful competitiveness. There is always the ability to gain market share from the competition and price plays a role in this success. Establishing brand awareness can entice customers but the business must understand what is needed to keep those customers once they have been won. While predatory pricing can be used to compete, it could be risky to raise prices once those customers have been won. The key is to have a successful marketing strategy that can enable the success of this process.
Businesses sometime price products and/or services below cost to attract new customers to the business. There are times when businesses practice pricing maneuvers to include placing low cost items toward the back of the store with the plan to produce impulse buying; however, this may or may not be effective for selling items. These tactics can be effective but there must also be a plan to keep these customers once the plan has been effective.
Prices of goods and services have been created to satisfy the customer while also increasing revenue. Please see the table below that list items by price as well as the total of items that are sold on a monthly basis.
Product
Product in the new location will be the same as is sold in the present location. The only changes in selection will be made once the customers share their like and dislike for the products that are being sold.
Promotion
An effective promotion strategy will be put into place by defining the objective of the promotional campaign, an identification of the target market, determining of the recipients of the promotional campaign, and a budget set aside for the campaign.
Place
The marketing team will determine the place for the beginning of the marketing and sales campaign. The preliminary plan is to use posters and flyers within the building announcing the opening of the new location at least 30 days before the new location opens.
Competition
At this time, there is one main competitor, Rudy’s Place, which is located less than 5 miles from Buster’s present location. Rudy’s has been in business for three years and sells the same type of products. The business also has an outside eating area which is used by the customers especially during the summer months. When people decide to leave the office building, Rudy’s is visited.
Operations
Operations, when viewing business; is simply operations management and references the administration of business practices that will create the highest level of efficiency and productivity within the business. The information listed below discusses Buster’s operations.
Buster’s is located on the ground floor of Madison Executive Suites – 1808 Florence Ave. – Colorado Springs, CO 80808. The business occupies 1,000 square feet of space. The managers spend a total of 50 hours per week at the location and originally hired two employees but now have three employees because of increased business.
How the Business will be Operated
The business at the new location will be operated in the same manner as the present store. The business will be open at 7am with the employee arriving at 6am to ensure that the store is up and running with fresh coffee and pastries that are ready to be served when the first customer arrives to work. Most of the customers are in a hurry and do not have extra time to stand and wait for store set-up. With everything being quickly available, the customers can make their selections and pay very quickly allowing them to get to work on time. The business opens at 7am and closes at 4pm Monday-Friday and is closed Saturday and Sunday.
Legal and Sundry Issues
Legal and sundry issues include the business structure which is an LLC, the business license and permits which are renewed on a yearly basis based on the state of Colorado’s city and state laws and are posted in view at the front of the store; and confidentiality and non-disclosure agreements which were based upon the financing of the business with the credit union. The last consideration is zoning as Buster’s is properly zoned and operates according to all rules that have been established by the city.
Legal and Related Issues
The business has liability insurance and also insurance relative to the property owned by the business. All state and local laws are obeyed and the business has a 99 % health score.
How Legal Issues will be Handled
Buster’s has an in-house attorney (Lester Jordan Law Offices) who is the brother of Jonathan Jordan. Lester is on a retainer and can be called whenever there is the need for an attorney.
Major Challenges
The business has two challenges. The first challenge being founder dependent as Jonathan and Margaret Jordan created the business. This is one of the reasons that Margaret is now training an assistant manager to ensure that the business could operate if anything were to happen to either of them. Having an employee who understands business management would enable the store to operate successfully in the event of an emergency of some type causing the owners to be absent. Giving over more control to employees will ensure that the business can operate (Beattie, 2015).
The second challenge is being able to ensure balancing of quality with growth. The reason that the owners can even consider opening a 2nd location is because of the consistent quality of products bought and customer service that always meets the desire of the customers at the present location. There must never be a time when quality and customer service diminish. When expanding a business there is always the possibility of not having the ability to personally manage every client relationship or to inspect the product as could be done when the business was smaller.
Having knowledge of these challenges can aid the business owners in creating a strategic plan that will assist the business in overcoming the challenges. One process that every business must become familiar with is methods that will allow the business to be sustainable for many years with short-term and long-term goals that can be accomplished.
Work Cited
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