According to Bangs & David, designing a perfect business plan requires a lot of strategies regardless the industry that the business falls. Planning a successful business needs strict evaluation of every minute detail towards the business prospect, in terms of its profitability and wining a competitive advantage. Wedding planning services has a lot of opportunities because people continue marrying in colorful wedding ceremonies (2011). Being 2 years old, Precious Moments has an opportunity to develop successful strategies that are likely to see it better placed in the next five years. The company wishes to develop a mobile application for its customers to log in and access their services online. The number of Hong Kong population is increasing with an increase in literacy levels. By the end of the mid 2012, the Hong Kong population was 7,136,300 people, showing a 0.9% growth rate (Census and Statistics Department 2012). The increasing population is adapting the present technology at an extraordinarily high rate. The introduction of mobile applications in wedding ceremonies thus is more effective. The Precious Moments business plan focuses on two areas; financial projections and marketing.
Financial projections
According to Guy (2000), financial projects show the estimated cost of developing the plan at hand, and the expected financial outcomes. Developing financial projections requires knowledge of economics of the business. Economics of the business is a section that carries out the business financial analysis that is later developed into financial projections. The economies of the business give an idea on how the profits are earned, and the number of products or services units that a business must sell in order to start making profits (Lipczynski & Wilson 2004). The projections are developed with various assumptions. Financial projections contain four main financial statements. These are: balance sheet; income statements; statements of stockholder’s equity; and statements of cash flows.
Precious Moments Company aims at developing a mobile application that is different for those of competing companies. The company requires financial assistance of HKD 4,300,000 in order to meet all its expenses within the following 5 years. Creating realistic financial projections is essential because it puts an organization in a better position to design for operations aimed at refunding the capital used. In developing the Precious Moments sales projections, the first assumption made is that the projections are wrong and have a low probability of succeeding. Since the sale projections for the company are difficult to predict, the following financial statements assists in estimating the financial data. Estimating the financial data is elaborated using the Pro Forma financial statements as shown in the tables below. The Pro Forma balance will assist in projecting Precious Moment’s financial situation in the coming five years. These statements give the company the eligibility to acquire financial assistance from a bank. Precious Moments wish to borrow a loan of $ 500,000 to finance its five year plan investments.
The Precious Moments sales are projected to increase by 15% within the next 5 years. Table 2 shows the projected company sales. From the Hong Kong market trend on the inflation rate, the increasing rate of salaries lies between 5% and 10 % depending on the job group. Seeking a loan of $170,000 will be very convenient for the company to achieve its five years goals. From the sales income statements, the company will have total sales of 1,777,772 U.S dollars by the end of 5 years. From table 3, the company projects its liabilities to increase from $ 197,400 to $ 213,672.1 in a period of 5 years. The projected cash flow is expected to increase by 12% each year. Table 4 shows the Pro Forma of cash flows for Precious Moments Organization in 5 years duration.
Determining the company’s return on investment (RIO) is very important since it aids in selecting the best investment options.
RIO = (Final Return/Initial investment) Δ(356/days)-1
Rio is calculated by dividing the initial investment by final investment. Then raise the answer to the power of 356 divided by the number of investment days. Finally subtract 1 from answer. The calculations are shown below. Precious Moments final return is 186624. The initial investment is 170,000.
The estimated RIO was 1.8% indicating that the financial projections were valid and the company could utilize them.
Marketing plan
Coming up with a perfect business plan requires an assumption that the area has many businesses offering the same service. Precious Moments aims at introducing a mobile application that is unique and more convenient for her customers. Perfect marketing strategies assist in placing the company in a better position to win the competition among its rivals. According to Kotler & Keller (2009), a marketing design is essential in an organization because it assists in the successful implementation of marketing strategies, and achieving the laid down objectives. A complete marketing plan creates a gateway for directing and coordinating the company’s marketing efforts. Precious Moments marketing plan focuses on promotional strategies for the new mobile application. The promotions will take place through online means, offline strategies, membership program, discounts, special gifts, and free training for couples.
Online promotion methods are the most effective since most people in Hong Kong are computer literate, and the increasing population will offer good market for wedding services. In an effort to attain the competitive advantage while serving the customers, Precious Moments should take various processes. The online promotion methods should ensure customer satisfaction and quality communication about new wedding materials. The promotion process will range from, identifying the target customers, using perfect approaches, and presenting them with what company offers (Suttle 2012). Online advertising of company services should include simulations showing examples of the new application in action in order to win a big crowd of people. The instruments to use on online promotions are; social media sites, blogs, Google applications, and the company website (Laudon & Traver 2010). The company will provide a window where people can put their login details in order to access various services offered by the company.
The other promotion method is offline means. This is meant for people who cannot access the internet, either because they cannot afford it, or they are not computer literate. Offline means of promotion creates more impact since they use physical methods in delivering the information. The company will develop business cards, brochures, company magazines, direct mailing, and other exhibits. The advertising team will make use of media in conveying the information to the people of Hong Kong. All the advertisement materials will contain the company’s information, which includes: company name, physical address, and contact numbers. The use of posters would be more effective since more people will have access to them while on the roads, or social gatherings. Moreover, differentiation of services will ensure customers are able to distinguish from the company’s services from those of competitors. Differentiation will be carried out on televisions. Differentiated services have the potential of attracting more customers since they make people curios (Levitt 1980). Other promotion strategies include, membership programs, offering discounts on certain services, performing special wedding parties, and offering pre-wedding courses for couples.
References
Census and Statistics Department. 2012. Population. Retrieved from:
http://www.censtatd.gov.hk/hkstat/sub/so20.jsp
Bangs, J. & David, H. 2011. Creating a Plan to Successfully Market Your Business,
Products, or Services. The Market plan Guide. Retrieved from:
http://www.quickmba.com/marketing/plan/
Laudon, K. & Traver, C. 2010., E-Commerce: business. technology. society. New Jersey:
Prentice Hall.
Levitt, T. 1980. Marketing success through differentiation. Harvard Business Review. Retrieved
http://cte.jhu.edu/courses/pii/marketing%20success%20through%20differentiation.pdf
Lipczynski, J. & Wilson, J., 2004. The Economies of Business Strategy. FT prentice Hall.
Guy, F., 2000. International Journal of the Economics of Business. Routledge: Taylor &
Francis Group. Volume 7, pp. 265
Kotler, P. & Keller, K. 2009. Marketing Management. The thirteenth edition. Pearson Publishers.
Suttle, R. 2012, Objectives of Promotion Strategies. Retrieved from:
http://smallbusiness.chron.com/objectives-promotional-strategies-21929.html
