A Plan for Small Business

A Plan for Small Business

I. Executive Summary

The plan is for a small business or rather store that specializes in wireless phones products and services. The business will be positioned in all customers segments, that is, high end, middle end and low end. In addition, the business will also provide auxiliary services like accessory fitting to customers. The positioning of the business will be in a shopping mall which will increase its chances of meeting with the customers.  The phone store will lineup features leading wireless carriers and national brands, on top of exclusive private brands. My stores private label brands will comprise PointMobl for accessories that enhance and protect the experience of mobility, Gigaware for individual computing hardware, AUVIO for precision video and audio technology, and Enercell for power products and batteries.   The finances will be obtained both from the owner and the financial market. In total, the business is set to cost about US$5000 in order for it to be fully functional.

II. General Company Description

First of all the aim is to open a store for distributing phones and offering phone products and services. The mission of the Phone store is to become the leader in providing phones as well as parts for phones for all wireless phone users especially companies.  Phone Store will be committed to establishing a long-term relationship with clientele through customer support and quality training, and wants to be identified as the leading wireless phone store company in the locality. The objective is progressive growth, becoming successful by the first year of operations. The business will be positioned in high end, middle and law end market. Specifically it will deal in products from one key supplier- Motorola Company.

III. Products and Services

At the locations, my phone store will offer a wide selection of technology products and services, including innovative accessories and mobile devices, in addition to, items for home and personal power and technology supply needs. My phone store will lineup features leading wireless carriers and national brands, on top of exclusive private brands. My stores private label brands will comprise PointMobl for accessories that enhance and protect the experience of mobility, Gigaware for individual computing hardware, AUVIO for precision video and audio technology, and Enercell for power products and batteries. 

IV. Marketing Plan

In the wireless industry for the last financial year, net subscriber was due to many clients signing up for services subtracted from those who disconnect (Zacharakis, Spinell, & Tim, 2011). The good news is that, AT&T’s 4Q net additions have been strong, although those who disconnect went down. The prepay services grew to about 46 percent of net addition from about 24 percent a year ago. On the other hand, Pre-pay is projected to be just 1/5 as gainful as post-pay for the industry.  The sad news is that, as prepay services grows in significance in the United States wireless market, the store is likely to underperform when it comes to margin on its largest business portion, and maybe more business from autonomous retailers of providers of service.

Total Size and trends

Based on the survey of wireless carriers, more than 285 million people in America are subscribers of mobile of mobile phones, which approximately 91 percent of the entire population. This is up 15 million when compared to the same period last year, although growth has slowed to some extent due to saturation in the market (Abrams, 2003). Besides, incomes from wireless services and products totaled to about US$77 billion for the same period, which is up from the same period last year. Even though, the actual increase comes from wireless data services—text messages, non-voice services and mobile Web. In addition, in the last trading period of last year, income for wireless data service amounted to about $22 billion, approximately a 1/3 of overall wireless takings, which is up by about 26 percent year-over-year. In addition, the survey indicated that about 257 million devices “data-capable” are active on United States network carriers. Nonetheless, approximately 50 million are associated with those of smartphones.

Entry Barriers

Whilst it is reassuring to recognize that prices are usually efficient when barriers to market entry are low, the question, at this point, is whether entry barriers into the US wireless phone market are adequately low to discipline companies in their policies of pricing (MCKEEVER, 2010). There are two prospective factors indicating that entry barriers into US wireless phone market may not be low, although play a key role: Possible switching costs by consumers, i.e. a potential unwillingness on the side of consumers to shift from existing providers to alternatives that are cheaper, and the restricted availability of frequency spectrum.

Product Features and Benefits

The store will be based in individual storefronts as well as key shopping malls. Each location will carry a wide range of both private brand and name brand consumer electronics products. The stores wireless platform will comprise prepaid and postpaid wireless handsets as well as communication devices like GPS products and scanners. The stores accessory platform comprises wireless, home entertainment, music, GPS accessories and video game; power adapters; media storage; headphones and digital imaging products. The modern home platform will entail home video and audio end-products, residential telephones, personal computing products, and VIP (Voice over phone internet products). On the other hand, the personal electronics platform will comprise digital music players, digital cameras, satellite radios, toys, camcorders, general radios and video gaming hardware. The power platform will comprise special and general purpose battery chargers and batteries. Lastly, the technical platform will comprise cable and wire, tools and components, hobby products and connectivity products. The will as well offer clients access to third-party services like prepaid wireless airtime, wireless telephone activation, AT&T’s ConnecTech service and extended service plans.

Customers

Key customers being targeted are the ones who have wireless phones. In addition, the customers that will be targeted are the ones who use phones and electrical accessories. The age or demographic of customers is general, even  though at some point after the business picked I will narrow down the line I think will yield more satisfaction and profit to my business.

Competition

Basically, outside its key accessory and battery business, the store will encounter stiff rivalry. In an endeavor to reduce its reliance on its wireless sales, the store may, at one point, push into consumer electronics like IPods brings it into more competition. Speaker wire, phone cords, headphones and belt clips for wireless phones will be the stores long-time selling strength as bigger rivals tended to concentrate on the sale of key products such as Television sets, phones and spent less time attempting to accessorize it. As of today, several stores have become proficient at accessorizing retailing of their key products, requiring much less trips to phone in order to complete their package. Actually, this leaves opportunities for my store to capitalize on lots of the smaller, but higher margin retailing that competitors have been missing.

Table 1:  Competitive Analysis

As it is indicated, the industry is competitive with, in fact, slim chances of making. Nonetheless, with strategic locations, best pricing policies and expertise I have will give me a competitive edge over the competitors. With location, I find this convenient as most customers also go to shaping malls and pass through residential places where in the course of time I will position the next store. Therefore, this location is ideal for my business. As indicated above, the products will be sold through, personal sales force employed at the shopping malls.

Sales Forecast

Operational Plan

Production

The products are produced by Motorola Company. As a matter of fact, my shop will only serve as a distributing agent of this company. In addition, the hired labor will serve to help customers know how to fix minor problems encountered by these products.

Location

As already indicated, the primary location will be in a shopping mall. With this, the space may not be a factor as nearly all customers may get a chance to see the products offered. The only thing needed is zoning. The mall will be located at the entrance to enable potential customers have a feel of the products before proceeding to do their shopping. This place is also convenient for those customers who do not want to enter inside the shopping mall.

Legal Environment

Just like any other business I will have to acquire a trading license both from the Motorola Company, the local government and a permit from the owner o the shopping mall. As indicated earlier, special regulations covering the industry or profession will be taken care of the main company before giving me the trading license to deal in their products.

Personnel

Since it is a new venture, I will start with only two employees who will assist me set everything in order. However, as the time goes by and the number of customers starts increasing, I will increase employee accordingly. The key qualifications required of them will be basics in sales and marketing as well as a degree certification in telecommunications engineering. They will be paid on a monthly basis. The big question at this pint is how to find them, well; I will use internet adverts and roadside posters as this job only caters to a small market place.

Inventory

I will specifically deal in finished products. The Average value in stock will be approximately, $5000. The Lead-time for ordering will depend on the movement of stock but I estimate it to be on biweekly basis. Seasonal buildups on the other hand will be dependent on the stock flows.

Suppliers

The key supplier is Motorola Company.The company is based in Chicago, Illinois at 847 West Harrison Street. The company has been in operation since 1928 with a good a record of meeting customer demand. Its mobile section designs wireless handsets, although also licenses its intellectual properties. This therefore, makes it reliable in terms of product supply. In addition, it costs of supply are same except the place is not with it normal supply centers.

Credit Policies

I do not intent to sell any product or service, in the near future on credit, as this is a new business it needs cash to float. However, I may provide after sale services like delivery for free, fixing simple failures as awy of attracting customers. What I know is that credits facilities at times keeps customers at bay, with this my store will not engage in an any process that is likely to chase away both potential and traditional clients.

Managing Accounts Payable

This helps me in planning whom to pay and when. Normally, paying too early depletes cash, but late payment as well can cost my valuable discounts and also can damage my credit.

A payables aging table

Management and Organization

Since it is a single, store the two workers to be employed will manage the business on a daily basis. Since, they will have training in telecommunication Engineering, Their experience will be of value to the business as they will be able to serve customers much better. The business is will be formed on perpetual interest. This means, should employees barge out, it will continue to operate through other experienced persons as well. The business will draw professional and advisory support from, consultants, mentors and key advisors.

Personal Financial Statement

Startup Expenses and Capitalization

A start up business will always have many expenses before even it starts operating. I have estimated these expenses accurately as they are significant in planning how and where to get sufficient capital. The budget of the store is US$5000 of which 60% will be raised through personal finance while the rest 30% will be raised through debt finance. The table below shows the start up expenses for the first four months of commencing operations.

Financial Plan

The foremost or key element in my financial plan will be initiating, maintaining and enhancing factors that generate, stabilize and increase the cash flow.

1. i. Key Assumptions

2. ii. Sales forecast

• I assume access to equity financing and capital to support my financial plan

• I assume my financial progress with regard to estimated sales and expenses

• I assume that there will be no hindrance to accessing the services and products we provide

The sales have been forecasted on the amount of orders that the business will be receiving every month.

Profit and Loss Account

Projected Balance sheet For the Year ended 2012