Excellent Fruit Juice Co Industry Analysis - Essay Example

?Table of Contents 9.0 References 15 List of Abbreviations Ed- Edited ed- edition ERP- Enterprise Resource Program KPMG- Klynveld Peat Marwick Goerdeler LIAS- Local Innovation Award Scheme UK- United Kingdom 1.0 Introduction Excellent Fruit Juice Co. is a public company that would be established in April 2013. Its core business would be to produce 100% natural fresh fruit Juice and fruit juice, which would be sold to people living in Newcastle, North of England. There is need for 100% fruit juice and fresh fruits to improve livelihoods of people of Newcastle. This is because most population in the Newcastle is poorer as compared to other parts of the UK. This business plan is comprised of company description. Company description informs the stakeholders and readers of products produced by the company and where it is situated among others. Third chapter is industry analysis, where it covers trends in the food and drink industry. Fourth chapter is a marketing plan, where it describes the target market, sales objectives, promotion activities and marketing strategy among other key areas. Fifth chapter is about operations. In this chapter, the company highlights and explains where it will source its fruits, plant and equipment as well as production process. Sixth chapter states company’s structures and the number of employees needed in each department. The last chapter; financial plan indicates the amount of money it is required to start and operate the business in the first year. It also indicates where these funds would be sourced and how it would be applied to enable the company attain its objectives 2.0 Company Description Excellent Fruit Juice Co. (EFJC) is a public company, which produce fresh fruit juice and fruit juice. It will begin its operations in April 2013 and would be headquartered in Newcastle, North of England. Its core business is to produce both fresh fruit juice and fruit juice from a variety of fresh fruits available in the UK. Some of the key fruits to be used in the production process are oranges, lemons, melons, pineapple, mangoes and berries among others. The founder of the company Mr. Jones Cook would be chief operating officer. The company intends to produce 100% natural products, which are safe and in variety of flavors in a bid to exploit the fresh fruit market and enhance nutrition for its consumers Furthermore, the company intends to be one of the fastest growing in UK and other parts of Europe. It would acquire and build outstanding fruit juice plant to meet fruit juice and smoothie needs of the people of Newcastle and its surroundings 2.1 Managing Stakeholders Expectations Table 1: Stakeholders’ Mapping using company’s stakeholder interest and influence matrix Ricart (2005 p. 100) explains that managing expectations of key stakeholders involves stakeholder mapping. Therefore, the company would manage its expectations so as to reduce potential conflicts. The company uses stakeholder interest and influence matrix to map its stakeholders. Employees and Government are the most important stakeholders of the company. Employees influence the company through their action and benefit from the company by receiving salaries. On the other hand, government through legislation can influence company’s operations. The government is also interested in the health of it citizens and have increased scrutiny in food and drinks industry. Customers are interested in the products while suppliers are interested in marketing their supplies. However, they have low influence because they cannot control operations of the company because the company would easily switch to other suppliers if need arises. Donors exert control through regulation of funds to the company and are not necessarily interested in company’s outcome. Figure1: Balanced Scorecard of the company The above scorecard would help the company’s management have a fast compressive view of the companies (Phadtare 2011, P.72). 3.0 Industry Analysis Food and drink industry is critical for societal health and financial outcomes in Britain. The industry has a significant contribution to manufacturing sector, employment, and health sector as well as export market (Ebers and Wied 2007). Soft drink industry is further divided into various sectors namely; carbonates, dilutables, sports and energy drinks, bottled water, still and juice drinks as well as fruit juice and smoothies subsectors. Carbonates subsector leads by 42% in market share followed by dilutables subsector at 23%. In 2011, all other subsectors retained their market shares except for still and juice drink; and bottled water subsectors. Still and juice drinks market share shrunk from 10% to 9% from 2010 to 2011. Bottled water benefited from market share reduction of still and juice drinks by increasing from 13% in 2010 to 14% in 2011. Figure 2: 2011 Market Share of various Soft Drinks in the UK Figure 3: 2010 Market Share of various Soft Drinks in the UK Source: Ardagh 2011 Under the fruit juice and smoothies subsector, 54% of the consumers prefer orange flavor and 15% apple while 14% cocktail. Furthermore, 5% prefer pineapple, 2% grapefruits and 10% prefer other brands (Ardagh, 2012, p. 12). Figure 4: Trends of overall soft drink consumed in eight years starting 2004. Ardagh (2012) illustrate the trend of overall soft drink consumption in million liters from 2004 to 2011. The industry has grown consistently from 13,721 million liters sold in 2008 to 14,685 million liters sold in 2011. The industry has experienced significant growth despite price increase and reduction of household disposable income in the UK as a result of global financial crisis and recession. This indicates that the industry is resilient. In 2009, the industry grew by 2%. Overall, the industry grew by 33% between the years 2000 and 2009. In addition, consumers increased their expenditure on food by 4.4% in 2010 to reach ?182 billion. Figure 5: Trends of fruit juice and smoothies consumed in eight years starting 2004. Ardagh (2011) illustrate the trend of fruit juice and smoothies consumption in million liters from 2004 to 2011. Specifically, fruit juice and smoothies sector has experienced significant growth from 1040 million liters consumed in 2004 to 1160 million liters consumed in 2010. The sector was negatively affected by global financial meltdown experienced because some consumers substituted the product with cheaper alternatives. However, it has begun to grow in 2010 as more and more consumers in the UK began to undertake preventive health measures, through increased consumption. of natural products. A shift towards preventive health initiatives by the UK consumers provides significant opportunity of growth in this sector. In general, pure fruit juice is a popular choice for health-conscious consumers The industry has experienced it share of challenges. For example, the UK government has heightened its regulatory pressures on the industry, especially in the control of food and drink brands. In addition, the government has loosened its grip on trademarks leading to significant declining level of drinks and food related trademarks in the industry, which lead to fiercer competition. Fiercer competition has led to substantial outlay of resources in advertising and product development by manufacturing companies. Furthermore, the industry has also experienced intense media and public scrutiny because of health issues associated with it. In the industry, retail outlets, especially supermarkets form the main mode of distribution to consumers. As a result, supermarkets have amassed substantial buying power, which enables them to squeeze profits of manufacturing companies. To protect themselves from fierce competition, most drinks are supplied under supply contracts. To acquire and retain significant market share, drinks industry demand constant improvements to update and introduce new products (Ardagh, 2011 p. 16). In fact, in United Kingdom alone, more than 1500 new products are introduced to the market quarterly. Creation and innovation of new exciting products, with new flavors as well as new combinations and evolving product concepts, require sizable investment in design and technology. This enables manufacturers to innovate beyond simple repacking and rebranding. The industry also faces the challenge of input price increases as well as limit on consumer intake capacity. 4.0 Market Plan Soft drink industry experiences good growth prospects as well as high level of competition. In fact, in the UK, based on overall sales, there is no definite single market leader with more than 10% market share. There are over 200 market players in the UK. However, Coca Cola Company and Princes Limited are number one and two in market share in the soft drink market respectively. Excellent Fruit Juice Co as a startup company intends to enter the market and developed a sizeable market share of 0.08% with an annual turnover of about ?12 million in 2015. 4.1 Market Objectives Specific objectives To acquire 0.02% market share valued at ? 3.5 million in Northern England by 31st December 2013. To acquire 0.04% market share valued at ? 6 million in Northern England by 31st December 2014. To acquire 0.08% market share valued at ? 12 million in Northern England by 31st December 2015. Assumption The price of a liter of fresh fruit juice would remain constant at ?1.3 per liter in year 2013 The market would continue to grow as more and more consumers become health conscious in the UK. Raw materials would be available all year round. 4.2 Justification of the marketing objectives Since 2000 to 2012, soft drink industry has grown in leaps and bounds, by over 40% to reach a market value of ?14.5 billion by end of 2012 (Ardagh 2012). Specifically, fruit juice and smoothies market grew in retail value from ?1.778 billion in 2010 to ?1.8 billion in 2011 (by ?24.3 million). In Western Europe, United Kingdom will lead the growth for fruit juices that are 100% natural. The growth is driven by consumer focus hinged on preventive healthcare. Fruit juice market is resilient. This is evidenced by dismal decline during the economic recession of 2009. In fact, there was significant growth in fruit juice market in 2011 even in the midst of rising prices and reducing disposable income in the households. 4.3 Target Market There are over 62 million consumers in the United Kingdom. Consumers are concentrated in restaurants, schools, colleges and universities; cafes, hotels, hospital, catering companies and sports stadia. Specifically, Excellent Fruit Juice Co. products are meant for consumers in Newcastle and it environs. Newcastle and its surrounding have population of more than 880,000. Most people in Newcastle cannot afford quality fruit juices because of associated high prices given that the region is among the poor in the UK. The company’s value position is 100% natural and safety as well as great and wide variety of flavors. 4.3 Competitors Analysis There are over two hundred players in the industry. However, significant competitors for the company are twenty eight, who command over 70% of the market share. Fifteen competitors provided in table 3 in the appendices command 36.5% market share. Large number of players implies fierce rivalry. It also indicate strategic importance of the industry in UK’s economy. The first four competitors are Coca cola commanding 7.9% market share. They are then followed by Princes Limited, Refresco Limited and Britvic Soft Drinks Limited at 7.4%, 6.6% and 5.4% market share respectively. The above competitors have invested heavily on plant and equipment, research and development and the marketing endeavors. However, they are mass producers and cannot work well with niches in specific areas in the UK. Significant substitutes in the industry include; carbonates, dilutables, sports and energy drinks, bottled water, still and juice drinks. Carbonates, dilutables and drinking water are significant substitutes of which both command 79% of the market in the industry. 4.5 Marketing strategy Company’s marketing strategies sole purpose is to arouse interests of the company’s product, which will lead to delivering the products to them. Lower pricing is a good strategy to enter the market Kumar (2009,p 226) points out that natural fruit juice is for specific markets (niche). Therefore, the markets would be segmented geographically (Ferrell and Hartline, 2010).The company intends to acquire a niche for its products in the North East of England, especially Newcastle, specifically in North Shields, South Shields, Gateshead, Whitley Bay and Jarrow. The company wishes to narrow its marketing efforts on five major towns in Newcastle because the fresh fruit market is loose, with no definite player. In addition, the company would develop unique fruit juices to meet specific needs of consumers in that region (Ferrell and Hartline, 2010 p. 170). Most customers in these regions are very sensitive to pricing owing to their economic conditions as compared to other parts of UK. However, they are keen to intrinsic benefits and naturally occurring ingredients in the products. Friedmann (2007) confirms that some consumers would love to have fresh fruit juice and the company would identify and offer the product to specific persons on demand. 4.6 Product Excellent Fruit Juice Co. would produce two distinct products. The first product is fruit juice and the second product is fresh fruit juice. Fresh fruit juice is squeezed on the premises upon demand and may be added sugar on customer’s demand. Main flavors would include orange, lemon, mango, grapefruit, apple, melon and carrot juices (Flynn 2012). 4.7 Prices Cost of production, overhead expenses and cost of assets determine the price of the company’s product. On average, total production cost is 80% of turnover and net income has been calculated to be 8% of the overall turnover. In real terms, average production cost is ?1.12 per liter of juice produced and overhead cost is ? 0.14. However, the objective of a public company is not to maximize profits but rather to benefit members of the society they serve. Therefore, prices would be set to cover cost of production and operation costs (Farazmand, 1996). However, the company would set an average price of ? 1.30 in the first year as introduction price to enable the company to repay loans obtained from the bank. and prices would be lowered in accordance with available funds. The key benefits of the products to be highlighted include but not limited to pure and 100% natural; wide variety of flavors and product safety. The company would employ fourteen marketing personal whose main work is to market and sell the products. They would also be involved in market research and development as well as product advertising. The company would engage an advertising agency in the first and second year of its operations. Furthermore, the company would seek services of distributor and retail agents who would be paid on commission. Since Excellent Fruit Juice Co is a startup company, its products would be promoted through bill board advertising, brochures, websites, as well as exhibitions and word of mouth within its area of operations. 5.0 Operations Excellent Fruit Juice Co. has laid down an ambitious plan to produce substantial quantities of fresh fruit juice and fruit juices. While keeping in mind the need for sophistication and high level of technology required to produce its fruit products, the company has decided to purchase a machine that would have an annual production capacity 10 million liters. The machine would be sourced from Sifter International tentatively in four months time and shall be availed in the premises before end of March 2013. 5.1 Sourcing Fresh fruits will be sourced from New Covent Garden Market and other major close markets (Hortex, 2012). New Covent Garden Market is one of the largest wholesale flowers, vegetable and fruit market in United Kingdom, located in South West London. The company would enter into supply contracts with carefully selected suppliers who would supply the product to the company’s manufacturing plant. 5.2 Production Production objective To produce 2.5 million liters of assorted fresh fruit juice in 2013. To produce 4.5 million liters of assorted fresh fruit juice in 2014 To produce 9 million liters of assorted fresh fruit juice in 2015 To ensure that the company does not purchase another product of plant, it is important to purchase a plant capable of producing at least 10 million liters of juices annually. 5.2.1 Production process Production process of the company is pretty simple, especially given that the plant and machinery to be used would be automated and would perform all tasks from washing to packaging. The company would employ three machine operators Figure 6: Simplified Production process Once the fruit juice has been produced, it would be preserved through heating at 820C-850C as permitted by health regulation (Sinha et al, 2012, p. 227). 5.3 Research and development There would be no distinct research and development function, due to financial constraints. However, each person in each area of operations shall furnish information to the chief operating officer for analysis and further action. The industry is extremely competitive. There is need for constant improvement of products and creations of new recipes. Therefore, Research and development would be inbuilt. The company expects to increase its sells for new products and product improvements that would be experienced. All major product inventions shall be patented and trademarks would be registered. The company would employ two qualified and experienced chefs to help in creation of new product flavors as well as improving the existing ones. A quality control specialist would also be hired to ensure that products produced meet industry standards and needs of the customers. 6.0 Organization Management The company would have a lean management structure, with no more than three levels of reporting. In total, the company would have 23 employees Figure 7: Company’s management structure The company intends to allocate first priority in training the production team in the first year. Therefore, chefs and other employees in the production would be trained regularly to sharpen their skills. 7.0 Financial Plan Excellent Fruit Juice Co intends to undertake an ambitious plan to enter and acquire significant market share in the soft drink industry. Cost implication in the first year is enormous. 7.1 Objectives To develop it assets base by the end of 3 years from ?1,225,000 to excess of ?2,000,000 Break- even in the second year of operations Repay plant and equipment acquisition loan by the 5th year in operation Table 2: Pre-operation Expense /cost Pre-operational costs Amount Salaries ?98,500 Production Costs ?645,625 Office and administration ?44,850 Marketing and distribution ?141,900 Assets and Infrastructure ?1,225,000 ?2,155,875 Excellent Fruit Juice Co. requires a total of ?2,155,875 to start and run its operations for the next three months. Thereafter, it is expected that the company would have started generating enough cash to run day to day operation from sales. The company intends to raise its capital from two main sources. Personal contributions in form of equity and venture capital loan. Company intends to raise ? 1,030,975 from venture capitalists and ?1,850,000 from its donors. Total production cost of the company in the first year of operation would be ?2,582,500. This cost would cover cost of fresh fruits, direct labour and overheads such as electricity and water as well as plant maintenance costs and plant insurance premiums. The company’s marketing and distribution costs would be ?781,600. Dutta (2003, p. 5.5) indicates that sales and distributions costs are expenses incurred to stimulate and secure demand for company’s product as well as execute customer orders. The distribution is important in servicing and maintaining product demand. Office and administration cost of the company in the first year would be ?157,450. This would sufficiently support production, research activities, distributions and selling function of the company. Income Incomes would be majorly from sale of company’s products and is expected to be in excess of ?2,500,000 in the first year. In the first year of operation, it is expected that the company would generate a loss of ?146,550. However, in the second year, the company is expected to generate profits in excess of ?500,000. Profits in the first three would be used to meet loan obligations. Pinson (2007, p. 5) indicates income can be from sales products or services, interest earned, renting out or disposal of company’s assets. The company would install ERP (KPMG, 2011) for better management of financial resources and other company undertakings. 8.0 Conclusion Excellent Fruit Juice Co. is a public company that would be established in April 2013. It core business would be to produce 100% natural fresh fruit Juice and fruit juice, which would be sold to people living in Newcastle, North of England. LIAS (2010) asserts that social enterprises are owned by the public and are not profit oriented. The company’s products are meant to improve health of customers and would be priced at ?1.30 per liter in the first year, a price not intend to maximize profits and would be lower as compared to its competitors. The company would have to purchase an automated fruit processing plant, which would speed up production process. The initial startup cost of the company would be ?2,155,875. However, for the first year ?2,880,975 would be needed to operate the company, of which ?1,030,975 would be sourced from venture capitalists and ?1,850,000 from donors. The company intends to grow its production capacity from 2.5 million liters in the first year to increased capacity of about 9 million liters in the third year. The company would initially employ twenty three people. Food and drink industry has a strategic importance in the UK and has recorded significant growth from the year 2000. However, the industry faces challenges among them, high government and public scrutiny as well as fierce competition. The most popular drink in the sector is carbonates, with a market share of about 42%. On the other hand, the fruit juice industry commands about 8% of the market share but it is expected to grow in the future as more and more people become health conscious. Traditionally, fruit juice market is a niche market. Therefore, the company would tailor it products to meet the needs of people of Newcastle to be able to persuade them buy. The company has developed a plan to guide its endeavors. Planning for public enterprise is important to ensure that resources are applied appropriately to areas where they are needed most (Bryson and Roering, 1987). 9.0 References 1. Ahmed, J. Lobo, M. G. & Ferhan Ozadali, F., 2012. Tropical and Subtropical Fruits: Postharvest Physiology, Processing and Packaging. London: John Wiley & Sons. 2. Ardagh, J., 2011. The 2011 UK Soft Drinks Report demand: By popular demand British soft drinks, London: BSDA 3. Ardagh, J., 2012. The 2011 UK Soft Drinks Report demand: By popular demand British soft drinks. London: BSDA 4. Bryson, J. M., & Roering, W. D. 1987. “Applying Private-Sector Strategic Planning in the Public Sector”, Journal of the American Planning Association, 53(1), 9-10 5. Dutta, 2003. Cost Accounting: Principles and Practice. New Delhi: Pearson Education India. 6. Ebers, M. & Wied, S. E. M., 2007. Swot Analysis Robert Mondavi and the Wine Industry. Germany: GRIN Verlag, 7. Farazmand, A., 1996. Public Enterprise Management: International Case Studies. London: Greenwood Publishing Group. 8. Ferrell, C. O. & Hartline, D. M., 2010. Marketing Strategy. 5th ed. New York: Cengage Learning. 9. Ferrell, O. C. & Hartline, D. M 2010. Marketing Strategy. 5th ed. New York: Cengage Learning. 10. Flynn, M., Ritchie, C. & Roberts, A., 2012. Public House and Beverage Management: Key Principles and Issues. Oxford: CRC Press. 11. Friedmann, A. S. 2007.Riches in Niches: How to Make It Big in a Small Market. New Jersey: Career Press. 12. Gulledge, R. T., & Sommer, A. R., 2003. "Public sector enterprise resource planning", Industrial Management & Data Systems, 103 (7), 471 – 483 13. Hortex, 2012. Wholesale market prices. Fresh Produce Journal, 11 May, [online]. Available at: http://www.hortex.org/2012-05-11%20Market%20Prices%20in%20UK_Hortex.pdf [Accessed 23 November 2012]. 14. KPMG 2011. ERP and the Public Sector: Useful Implementation Insights from Peers That Have Been There, Done That [online]. KPMG LLP. Available at: http://www.nasact.org/conferences_training/nasc/conferences/AnnualConferences/2011AnnualConference/PresentationsHandouts/KPMG.pdf [Accessed 24 November 2012]. 15. Kumar, R. S. 2009. Consumer Behaviour and Branding: Concepts, Readings and Cases-The Indian Context. New Delhi: Pearson Education India. 16. LIAS 2010. Making the transition workshop, 4 August 2010 [online]. Available at: http://www.localinnovation.idea.gov.uk/idk/core/page.do?pageId=22580780 [Accessed 24 November 2012]. 17. McDonald, S. & Hawkins, D. eds. 2012. Enterprise and Entrepreneurial Management. Harlow: Pearsons 18. Phadtare, T. M., 2011. Strategic Management Concepts and Cases. New Delhi: PHI Learning Pvt. Ltd 19. Pinson, L., 2007. Keeping the Books: Basic Recordkeeping and Accounting for the Successful Small Business. 7th ed. London: Kaplan Publishing. 20. Ricart, J. R., 2005. The Sustainable Enterprise: Learning from DJSI Leaders. Bilbao Fundacion BBVA. 21. Sinha, N. Sidhu, Barta, J. Wu, J. & Cano, M. P. ed., 2012. Handbook of Fruits and Fruit Processing. 2nd ed. West Sussex: John Wiley & Sons. 10.0 Appendices Table 3: Direct Competitors of the Company Companies Market share Coca-Cola Enterprises Ltd 7.9% Princes Ltd 7.4% Refresco Limited 6.6% Britvic Soft Drinks Limited 5.4% Gerber Juice Company Ltd 2.1% Tropicana UK Ltd 2.0% A G Barr plc 1.6% Tata Global Beverages GB Limited 1.1% Danone Waters (UK & Ireland) Ltd 0.8% Nichols plc 0.7% Shloer 0.3% GlaxoSmithKline Nutritional Healthcare 0.2% Boost Drinks Ltd 0.2% Purity Soft Drinks 0.1% Radnor Hills Mineral Water Company 0.1% Others 63.5% Table 4a: Cash flow Statement for the company 2013/2014 Amounts are in pounds March April May June July August September October November December January February March Balance b/f - 396,483 273,841 645,412 464,394 283,382 123,936 319,460 186,737 91,483 36,634 265,746 234,108 Income Donor Fund 1,350,000 - 500,000 - - - - - - - - - Loan 400,975 - - - - - 350,000 - - - 280,000 - - Sales 57,500 67,850 80,063 94,474 111,480 131,546 155,224 183,165 216,134 255,039 260,000 280,000 315,000 Other Income Total 1,808,475 464,333 853,904 739,886 575,874 414,928 629,160 502,625 402,871 346,522 576,634 545,746 549,108 Assets Premises Equipments and vending machines 90,000 - - - - - - - - - - - 90,000 Production Plant 1,000,000 - - - - - - - - - - - - Furniture and Fixtures 20,000 - - - - - - - - - - - 20,000 Communication facilities 15,000 - - - - - - - - - - - 10,000 Vehicles 100,000 - - - - - - - - - - - 100,000 Production Costs Fresh fruits and transport 50,000 82,000 100,000 150,000 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 Direct Personnel Salaries 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 Overheads 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 Training costs Office Salaries 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 Licenses and certificates 1,500 - - - - - - - - - - - - Data analysis 2,000 - - - 1,500 - - - 1,500 - - - - Insurance premiums 290 290 290 290 290 290 290 290 290 290 290 290 290 Bank charges 50 50 50 50 50 50 50 50 50 50 50 50 50 Repairs and maintenance 270 270 270 270 270 270 270 270 270 270 270 270 270 Communications 125 125 125 125 125 125 125 125 125 125 125 125 125 Office Rent 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Legal expenses 3,000 - - - - - 2,000 - - - 1,000 - - lighting and heating 200 200 200 200 200 200 200 200 200 200 200 200 200 Salaries 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 Print advertising 200 200 200 200 200 200 200 200 200 200 200 200 200 Online advertising 5,000 - - 7,000 - - - 3,000 - - - - - Bill boards 17,000 - - 10,000 - - - 3,000 - - - - - Display suites 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 Price discounts 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Marketing communication 330 330 330 330 330 330 330 330 330 330 330 330 330 Market Rent 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Carriage outwards (fuel) 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 bad debts 210 210 210 210 210 210 210 210 210 210 210 210 210 wastage of finished goods 500 500 500 500 500 500 500 500 500 500 500 500 500 Commissions – retailers 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 Commissions –distributors 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 Loan repayment - - - - - 16,708 16,708 16,708 16,708 16,708 16,708 31,292 Interest on loan 2,507 2,507 2,507 2,507 2,507 2,507 2,507 4,695 4,695 4,695 4,695 6,445 6,445 Total Cost 1,411,992 190,492 208,492 275,492 292,492 290,992 309,700 315,888 311,388 309,888 310,888 311,638 546,222 Balance b/d 396,483 273,841 645,412 464,394 283,382 123,936 319,460 186,737 91,483 36,634 265,746 234,108 2,886 Table 4b: Cash flow Statement for the company 2014/2015 Amounts are in pounds April May June July August September October November December January February March Balance b/f 2,886 1,664 16,692 48,783 87,122 144,273 221,176 318,818 438,237 580,521 746,814 938,316 Income Donor Fund - - - - - - - - - - - - Loan - - - - - - - - - - - - Sales 325,000 341,250 358,313 376,228 395,040 414,792 435,531 457,308 480,173 504,182 529,391 555,860 Other Income Total 327,886 342,914 375,005 425,011 482,162 559,065 656,707 776,126 918,410 1,084,703 1,276,205 1,494,176 Assets Premises Equipments and vending machines - - - - - - - - - - - - Production Plant - - - - - - - - - - - - Furniture and Fixtures - - - - - - - - - - - - Communication facilities - - - - - - - - - - - - Vehicles - - - - - - - - - - - - Production Costs Fresh fruits and transport 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 182,500 Direct Personnel Salaries 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 11,900 Overheads 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 21,000 Training costs Office Salaries 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 Licenses and certificates - - - - - - - - - - - - Data analysis - - - - - - - - - - - - Insurance premiums 290 290 290 290 290 290 290 290 290 290 290 290 Bank charges 50 50 50 50 50 50 50 50 50 50 50 50 Repairs and maintenance 270 270 270 270 270 270 270 270 270 270 270 270 Communications 125 125 125 125 125 125 125 125 125 125 125 125 Office Rent 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Legal expenses - - - - - - - - - - - - lighting and heating 200 200 200 200 200 200 200 200 200 200 200 200 Salaries 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 15,800 Print advertising 200 200 200 200 200 200 200 200 200 200 200 200 Online advertising - - - - - - - - - - - - Bill boards - - - - - - - - - - - - Display suites 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 1,550 Price discounts 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Marketing communication 330 330 330 330 330 330 330 330 330 330 330 330 Market Rent 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Carriage outwards (fuel) 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 3,300 bad debts 210 210 210 210 210 210 210 210 210 210 210 210 wastage of finished goods 500 500 500 500 500 500 500 500 500 500 500 500 Commissions – retailers 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 Commissions –distributors 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 7,030 Loan repayment 31,292 31,292 31,292 42,959 42,959 42,959 42,959 42,959 42,959 42,959 42,959 42,959 Interest on loan 6,445 6,445 6,445 6,445 6,445 6,445 6,445 6,445 6,445 6,445 6,445 6,445 Total Cost 326,222 326,222 326,222 337,889 337,889 337,889 337,889 337,889 337,889 337,889 337,889 337,889 Balance b/d 1,664 16,692 48,783 87,122 144,273 221,176 318,818 438,237 580,521 746,814 938,316 1,156,287 Read More