Business Plan[Name of the Student]
Introduction 4
1. Overview 4
2. Trend 4
3. Size and Potential 5
5. Competition 6
6. Customers 6
7. Analytical Tool 7
Market Strategy 8
1. Objective 8
2. 4Ps 8
Organization Management 9
1. Management Overview 9
2. Staff Requirement 9
Production and Operation 10
1. Premise 10
2. Plant and Equipment 10
3. Operation Overview 11
Costing and Financing 11
Financial Assumption 11
Executive Summary
In the present world, it is not easy to launch and run a business, even if it is business related to manufacturing. It requires constant tenacity, hard work, and continuity to work with various uncertainties. A successful business needs to be prepared for the obstacles in order to grow in size. This paper will cover the aspects of how to tackle main obstacles present in running a business. Generic Company is a newly established business of printed circuit boards manufacturing for robotic solutions. It has to consider the overall market and trends of the competition as well as the consumers. The PESTEL analysis, is provided to determine the outward factors that will effecting the business.
The marketing of the product has been identified through a predetermined marketing strategy and marketing mix. Generic Company is focusing on service from the start of the business, hence the management team comprises of all the experts in the field. Operations of the company will be conducted in the industrial area of Manchester. All the manufacturing operations will be outsources initially but the services and quality checks will be conducted by engineers employed by Generic itself. The financial projection will help in determining the flow of cash.
Business Plan
Introduction
The Generic Company was incorporated in August 2001 in order to create, manufacture, and promote, a range of flexible robot series assembly with an excellent price / performance ratio. The main product of Generic, the Automaton 10 will be specifically designed for manufacturers of printed circuit boards. Although the prototype is about to be created, the designing and product requirements are already significantly complete.
The robot series produced by Generic, both for the electronics industry and applications are light to assemble, they are characterized by a common purpose: the flexibility of production and the reduce costs for end users. Generic products create real advantages over existing products.
- Overview
The current cost of local labour (which is not expected to decrease in the medium long term) and the growing commitment that the logistics for foreign production involves implying a more pressing demand for robotics solutions. The market of robotics has experienced a considerable growth, from about twenty million in the year 1994 to a forecasted amount of GBP 320 million in 2010. European market is estimated to reach $ 1.7 billion. While the cost of the job abroad continues to rise inexorably, it is expected that the global robotics market will reach three and a half billion by 2014. The Generic believes it is worth an award of three percent of the European market, or fifty four million Euros, by its 5th year of operation (Chambers, p.63).
- Trend
At the base of the phenomenal development announced for the field of robotics, there is a growth to the same extent, if not faster, there is competition present related to wide range of products that require elastic processes, able to manage the various updates. These companies need to discover ways to obtain flexibility through manufacturing while controlling the costs. The goods manufactured by Generic satisfy the requirement thanks to their characteristics of re-programmability, which reduce the need for additional goods instrumental and personnel training. Since the process of assembly requires a use labour-intensive, and the cost of labour increases, the products allow Generic also reduce the average hourly cost of assembling.
The pricing and payment policies will be very convenient. Buyers of large quantities will be granted discounts of up to 13% on orders of multiple units (units purchased within a period of sixty days shall be subject to quantity discounts of 25%). The company's policy will require a deposit cash of 15% is necessary on orders placed, and the remaining amount has to be paid within forty five days of installation. The guarantees of the standard Generic will be ninety days, in accordance with the industrial standard. However, the contract related to services of the company will be substantially different from those of the market, because prices will be calculated on the basis of duration of the service contract. The modular approach to the design of the Generic products, combined with their structural simplicity, allow the company to provide customers with periods longer than twelve hours at most (Buzza and Joseph, p.27).
- Size and Potential
The company policy is based on the concepts of Generic innovative, competitive prices, high-quality products, and unparalleled services. Since the pressure of both domestic and foreign competition is increasing, the Companies need to analyze more carefully the costs of production. The problem is particularly critical in the industry of electronics production of large quantities and fierce competition has led to a pricing policy with margins greatly reduced.
Today, the industries have no choice, but to increase productivity, maintaining or improving the quality and reducing the cost of labour otherwise consequence suffered by the company will be similar to as of U.S. producers of television in the 60s and 70s, or a slow decline due to competition from foreign countries.
Many industry experts, including George Davis McBan & Co. and Industrial Group of Wanda Fleming, a well-known industrial consultants, believe that the problem of competition of electronic products that companies have to face in the next decade will give rise to an almost explosive growth of the domestic market of robotics for the assembly. The reason of this growth is that there is a fierce competition within the industry allows robotic the manufacturing industry of (Chambers, p.63):
- Increase productivity while maintaining or even improving the quality level.
- Adapt to long-term strategies to overcome foreign competition.
- Use the innovations in the industry so profitable.
- Reduce the cost of labour.
In support of the above, it is noted the undeniable reality of the sharp decline the last decade the rate of productivity growth for both European heavy industry and for that lightly. The increase year on year in 1988 4.8 percentage, whereas in 2000 it was 0.8 percent, it is a threat to the industry that these data signify the increase in foreign production.
- Competition
The Generic Company was established in the beginning of 2012, in response to the main issues today the manufacturing of electronic components and systems: to achieve flexibility production at a low cost. As the competition in the market for peripheral electronic systems and components continuing to rise, the pressure on prices reduces more and more the margins. In the final analysis, only companies that operate in the most efficient will survive. The Generic was created by a group of professionals and experience people, to design a series of goods that serve the purpose of cost efficiency and manufacturing flexibility in the following way:
- Ensuring the re-programmability for assembly operations.
- Increasing productivity.
- Improving accuracy.
- Reducing the supervision and other indirect labour costs.
Converting essentially an inconsistent cost (labour) in a permanent cost (capital equipment), led to rise in the profitability of production "to large volume”, and enabling process changes without resorting to capital goods new or additional (Rhonda and Eugene, p.236).
- Customers
Over the next two years, the General will focus only on the European market and on Germany. From the third year, the company will also enter markets outside Europe, focusing primarily on U.S. users. Among the main potential customers already contacted by the marketing staff and the planning of production, will be MBI Board Technologies, Pear Computers, Peripherals, and Hillhatch Fullsiz Computer (global revenues of these five companies exceeded € 1,500 million). The response to the presentation of produced in the project has been extremely positive.
- Analytical Tool
Market Strategy
- Objective
The marketing strategy of Generic provides an initial focus on a basis of 15-30 leading producers of electronic products. All target customers are known for innovative management, labour costs relatively high market shares that has declined in recent years because more and more competitors from foreign countries. The design of the product will always follow the described standard related to quality (which is based on speed, reliability, simplicity, and accuracy), innovation, price (provided by engineers Generic not by third party contractors) and service (Rhonda and Eugene, p.236). The Generic Management strongly believes that the customer should be provided with quality product, it is the main task, and most important to achieve the expected market share, innovation and service are the real aspects of the quality and, consequently, the focus.
- 4Ps
Promotion: Six-axis motion that ranges of thirty inches per second (IPS) to thirty grams, or less, 20 IPS at a highest competence of four kilograms. The features of new Automaton 10 will be source of promotion.
Product: Unlimited Repeat with an accuracy of 0.001 inches, Automaton 10. The small size requires less space and allow. Clearly the use and maintenance, and also allows a minor cost of production.
Place: There will be outlet store in industrial areas. Robotic can be used in ceiling or floor or portable applications. It will be promoted in different exhibition and through presentations.
Price / Performance: Significant cost savings for end-users thanks to performance with a highly competitive price-performance ratio (Chambers, p.63).
Organization Management
- Management Overview
The Generic starts the business with seven employees, all technicians. In the initial seven months of business operations, the company tends to hire more staff and increase it to thirty two people; eighteen of them will be technical staff. When the year will end, the Generic will have staff of sixty three people: thirty in the technical area, twenty in marketing, and three in the administrative / general.
- Staff Requirement
The success of the Generic depends on the ability of the management team to create a line innovative product and distribute it with a good quality-price ratio to a market large and receptive. The founders of Generic, listed below, are professionals of great value, whose experience will generate an immense synergy in support of the company.
John Parmer CEO: Former Chief Executive Officer and founder of ABC SpA, a company with a turnover of several million Euros manufacturer of robots for welding and painting, which was acquired by Major Motors Plc in 1993.
Stephen Daniela, Director of Marketing: Twelve years of experience in the field of marketing industrial, culminating in the role of marketing manager for a company division "Fortune 500" producing capital goods.
Mario fabric, Director of Design: Previously responsible for the design the ABC SpA 'was one of the main architects of "ABC 1982", which is still the product best selling of the company.
Priscilla Rovero, Managing Director and Financial Controller: Seven years experience in one of the "Big Five", the last two of which as a consultant "start-up"; Masters in Business Administration from Stanford University.
Foreigners George, Director of Production: Formerly in charge of production at Acme Corporation, a company 100 million manufacturer of audio visual equipment and microwave ovens.
Production and Operation
- Premise
The Generic is currently located in an office of 250 square meters in Manchester, UK. The company has the ability, through the current landlord, to take advantage of additional 1,600 square meters space, which will be sufficient for the first two years full of activities.
- Plant and Equipment
The operational specifications and manufacturing Automaton 10 are substantially completed; the software development is still to be finalized and to be tested before beta installations. The implementation of the software is the biggest obstacle to Automaton 10 production schedule. To solve the possible slip times, the development process has been divided into five segments (drives, control interface, operating system, networking and input sensors) to be carried out simultaneously. Each segment will be followed by a dedicated engineering manager. An in-charge of project will also coordinate the entire construction. The latter, in turn, will report to the Deputy Director of the design. The expected date for the completion of software is three months from the date of the loan. It is necessary to have a development plan so fierce that requires additional help of three designers’ specialized in software to complete the task on time (Linda, p.246).
Generic Management predicts that by the end of the sixth month (considering how month zero than financing) will be operating three sites beta installed. The start-up phase of the Production will begin at the end of the sixth month. The contracts for the supply of servo and PC command have been agreed on favorable terms. The company employs more suppliers for servo motors (Mighty Motors, Hydraulic Manufacturers and Hester). HAL Computers has guaranteed supplies in the long term by exchanging terms of purchasing six months with a modest shareholding (1.17%) in Generic (Linda, p.246).
- Operation Overview
In order to reduce the risk of the development phase associated with the start-up and to minimize the use of funds, the production will be outsourced Generic for the first 12-18 months. If, on the one hand, divest outsourcing means losing some extent the control, management believes that the experience and contacts in the industry allow company to operate in a "cost-effective" flow to the establishment of the Generic material produced outside. Subcontractor are not yet bound to any contract at present, but the Company has been prepared list of vendors to which most probably will be in charge of the production (chosen on the basis of criteria of quality, closeness, reliability and price).
Costing and Financing
Financial Assumption
Generic Company has planned its financial strategies in order to manage the worst and utilize the finances to the best possible way. In the projection of first year planning related to financials, it has been set turn below the average, sale volume has been anticipated below average, and cost on services is above average. It is necessary that the Company is positioned at a place that help in effective financial planning to gain business success and also to make sure that the entire business plan is not undercapitalized (Buzza and Joseph, p.27).
The owner will be investing £ 150,000 at the start of the business, which will increased by additional grants of £ 150,000. Generic Company will seek a loan of £ 400,000 along with £300,000 investment for equipment, furniture, legal fees, supplies, renovations, working capital and marketing (Berry, p.105).
In financial planning, the following aspects will be included:
- Analysis of breakeven point
The analysis of first year break even, there will be a fixed cost assigned per month which is £60,230. It includes the cost of utilities, rents, full payroll, and a close estimation of all running costs. The cost of goods direct (In the inventory plan) will be a portion of sales approximately 35%, according to which the monthly break even cost will be £92,081. We are planning to decrease the estimated breakeven cost in the initial 4 months time period. When we move out of the start up phase of the business we will be focusing on controlling cost and we will decrease the cost of goods sold, which will drop the value of break even and gross margin will be increase.
References
Berry, Tim J. Hurdle: The Book on Business Planning. Eugene: Palo Alto Software, Inc. 2004, p.105.
Berry, Tim J. The Plan as You Go Business Plan. Canada: Entreneur Media Inc., 2008, p. 97. (Berry, 2008, p.97)
Buzza, John, and Joseph B. Mosca. "Create The Plan, Work The Plan: A Look At Why The Independent Business Owner Has Trouble Calling A Franchisee A True Entrepreneur."American Journal of Business Education. Pp.27 Littleton: (2009),
Chambers, Dennis K. The Entrepreneur's Guide to Writing Business Plans and Proposals. Westport, CT: Praeger Publishers, 2008, p.63.
Linda Pinson (2008) Anatomy of a Business Plan: The Step-By-Step Guide to Building Your Business. Published by Aka associates. Copyright. Pp. 246-266.
Rhonda Abrams, Eugene Kleiner (2003), The Successful Business Plan: Secrets & Strategies, Publisher The Planning Shop. Copyright. Pp. 236-240
