The financial plan is presented as below:
Financial Plan
The following would be the projected income statement for the Company in the first year of operation.
The profit for the business in the first year can be expected to be higher than a thousand dollars.
The asset planning for the business can also be presented in the following table. The asset has been prepared keeping in mind the conservative policy of asset planning.
Guerrilla Marketing Plan
Guerrilla marketing is all about understanding the market and competition dynamics and using unique ways of marketing ideas and products. For the expansion plan that is under consideration, the following aspects could be perceived:
What the buyers of target market think.
A person working in the organization may not necessarily be the ideal type of buyer that he or she may come across. Thus, the projection thinking of the marketer of the organization may not work as a reflection of thinking of the potential customers and buyers. The trick is to gather relevant information regarding the target audience and customers and the buyer personas should be turned. The aspects for considering the thinking of the buyers may be, the reason why they chose to switch to products and services of our company, the selling point trigger points, the motivation for positive word of mouth, and what the strengths and weaknesses of the brand are.
The level of creativity
Copycat marketing may not work in the long run. One of the examples is the use of the Ice Bucket Challenge where millions across the world post photos and videos and accumulated huge donation amounts. The same strategy was copied by marketers throughout the world attempting to collect charities with the same initiative, however all the efforts failed. The consumers of the modern age are hungry for experiences and will have interest response when there is presence of creative marketing (Levinson, 2008). Trying to copy other marketing tactics may instead turn to be producing negative results.
Measurement of success
The stories of business owners at the small level selling hundreds of Groupon deals have already been making rounds. However, they failed because of over succeeding in selling but not being able to manage inventory and personnel for the deals accordingly and get a good margin on the sales deals that they made. Thus, sales cannot be taken as the sole measure of success; may not even qualify as the most indicative ones. The acquisition of customers and rise in the margins of profits with customers turning into loyal customers is the key measurement of success. Other factor may be the upgrading of sales and add-ons and additional measures which are taken as primary guerilla marketing strategy goals. These serve as the actual success benchmarks for the business.
The team work
Guerrilla marketing is also about the creation of synergy and the existence of a win-win situation for strategic partners. This is backed up by the logic that the partnered organizations should benefit for the marketing activities through higher awareness and sales of brand, but this should not be at the cost of customer priority. The indicators or characteristics that help choose the correct partner for guerrilla marketing may be presented as:
Common audiences are the targets
The goals of mission and vision are shared
Common cultural practices and values
Common campaigns and similar types of goals for seasonal promotion
The want to share contracts and create new contacts on the table
360 degree approach to marketing
There are small businesses who lament that they have trued almost everything for their guerrilla marketing initiations but resulted in nothing. The problem with these Companies is that not everything has been tried and tested and there are still many tactics that still need to be utilized. This is a regular chain for many small businesses and marketers who let go of the free marketing techniques like social media, blogs and emails. The business will utilize these tactics and build a social media promotion which will be robust and help promote the business of both the locations.
The movement of guerrilla activities
There may be resource constraints for businesses which are small in size. However, this is not a capacity constraint. When we consider the big organizations, there are concerns and issues such as red tape and higher number of people need to get convinced for innovation, bureaucracy and expansion activities (5 Guerrilla Marketing Tactics for Small Business Owners, 2013). This creates difficulty in the movement in market and the opportunities of emergence cannot be taken advantage of. However, being small in size does not also mean that innovation will be maximized, so that these ideas relate more to the mindset of the Company than size. For this new outlet, small size and a hierarchy that is flat will be considered for the development of corporate advantage. An organization culture will be developed that is not bias for the optimization of action and process advancement so that new ideas are created.
It is mandatory for each business to understand how location decisions can create the success or failure of a business and thus choose a location considering the same. There may be multiple issues that need to be considered while space hunting for new business. However, there are four mandatory issues that need to be assessed:
The contribution of location to the business success
The type of geographical location most suited for the business
The amount of rent that can be afforded
The feasibility and suitability of the location that has been proposed
The contribution of location to the business success
For certain businesses, “location, location, location” is the classic piece of advice which works for them right in the bull’s eye. For some enterprises, location may not be as much an important factor as the search of affordable space for rent. Some businesses even have irrelevant location decisions; such as companies which provide services at the customer door step and those which have minimal public contact such as businesses which are based on internet and wholesalers. In the condition that these Companies are able to pass rent savings directly to customers including their margins of profits, a low cost spot can also provide profitable margins to the business.
The type of geographical location most suited for the business
The major factor that needs to be considered for selecting a favorable location can be the determination of considerations for increasing the volume of customers for the business (Choosing a Successful Location for Your Business | Nolo.com. 2016). The questions to be asked are:
What will be the mode of transport of the customers?
The driving places for customers and the parking space
The flow of customers if the location is in the periphery of similar activities
The role of reputation of the neighborhood or any other specific vicinity.
It should be borne in mind that varied business types attract different customers in varied ways. One of the comparisons to be made is automobile traffic versus foot traffic. For instance, if there needs to be an opening of a modern coffee shop, there may be assumption that the volume customer is the highest if the traffic of pedestrians is high, in the time that operation times are open. On the contrary, if we consider an auto repair shop, a much travelled street would be the most feasible choice where many drivers can easily see the shop.
There should be consideration that whether setting the business in the vicinity of similar businesses and customer flow would benefit the Company. For instance, for women apparel business, the new business would benefit if it is placed in an area where there is abundance of women shopping spaces. It should ultimately be borne that the business perfect location is a matter of independence. The location that we set for the business expansion is Sessame Street because of higher customer flow.
Sources of Debt Financing
There are two types of debt financing: unsecured loans and secured loans. Security takes into account a collateral form as the assurance that there will be repayment of the loan. If there is a default on the loan by the debtor, there is forfeit of collateral so that the debt payment is satisfied. Majority of lenders will demand for loan security (Staff, 2016). The business will be lucky if loan can be secured because of the goodwill of first store or any networks.
The securities that can be offered to lenders for attaining debt for the business are:
There is signing of agreement by guarantors with the statement that there will be loan payment guarantee.
Guarantors and endorsers are similar in the purpose delivery in many cases for posting collateral.
Co-makes act as principals for in effects who carry the response of loan payment.
The banks are allowed for advancement of up to 65 to 80 percentage of the total receivable value by accounts receivable as soon as good shipping occurs.
Loan collateral to a level of 60 to 65% is also received through equipment.
Public companies are allowed for offering of bonds and stocks by securities in the form of collateral for loan repayment.
90 percent of the value amount can be retrieved through private or commercial assets of real estate.
Loans can be secured through deposit certificate or savings accounts.
The use of equipment as collateral is known as chattel mortgage, which lets lender make loan taking the present value of equipment as the base.
95% of the value in cash is gained by putting insurance policies as the collateral for financing of the business.
Along with unsecured and secured loans, repayment period is also applicable for most of the debts. The repayment terms can be of three types:
The payback period of short-term loans are generally 6 to 18 months
The payback period of Intermediate-term loans are generally three years or less
The payback period of long-term loans is generally five years or less, which is paid back from cash flow of the Company.
References
5 Guerrilla Marketing Tactics for Small Business Owners -. (2013). Small Business Blog. Retrieved 31 May 2016, from https://www.kabbage.com/blog/5-guerrilla-marketing-tactics-for-small-business-owners
Choosing a Successful Location for Your Business | Nolo.com. (2016). Nolo.com. Retrieved 31 May 2016, from http://www.nolo.com/legal-encyclopedia/choosing-successful-location-business-29678.html
Levinson, J. (2008). Here's the Plan. Entrepreneur. Retrieved 31 May 2016, from https://www.entrepreneur.com/article/188842
Staff, E. (2016). Debt Financing. Entrepreneur. Retrieved 31 May 2016, from https://www.entrepreneur.com/encyclopedia/debt-financing