Business Proposal Paper - Essay Example

?Business Proposal Executive Summary The paper aims at structuring a detailed business proposal plan for the reason of starting a fresh business. Theintended nature of business that has been considered is starting a gift shop in the name of ‘Customise your Gift’. The business is intended to be established in Riyadh, Saudi Arabia. The business proposal will provide an evident idea regarding the steps that needs to be pursued for the establishment of the business. The business plan will encompass all the necessary and vital aspects related to a business that is the marketing, financial along with the operational facets. The business proposal will tend to serve as a full-proof guideline which will provide an appropriate direction to the activities related to the commencement of the intended business. Table of Contents Business Proposal 1 1 Executive Summary 2 Table of Contents 3 Introduction 4 Business Idea 4 The Market 6 Competitors 8 Financial Issues 9 Pro Forma Cash Flow 10 Operational Issues 12 Conclusion 12 Bibliography 14 Introduction The paper will intend to provide a detailed business proposal for the reason of starting up a fresh business that is of a gift shop. A comprehensive structure of the business along with the required procedures for starting a fresh business will be explained in the business proposal. The business proposal will provide a lucid comprehension of the entire process of setting up a fresh business. Business Idea The sector of gift shop is learnt to be growing presently in Saudi Arabia but it has also been observed in this respect that the existing gift shops fail to cater to the overall requirements of the customers owing to dearth of innovative competence. Taking this aspect into consideration the business plan to establish a gift shop in Riyadh, Saudi Arabia was developed. The gift shop has been decided to be known to people by the name of ‘Customise your Gift’ and is planned to be situated in one of the renowned shopping malls of Riyadh. The gift shop is expected to cater to the requirements of its respective customers with the help of its unique products as well as services. The gift shop has been planned to offer gift products with a certain unique edge which is believed to prove to be quite appealing for the customers. The shop will offer gift items which will include sketching or portrayal on t-shirts by the customers and even making sculptures or carvings on silver, bronze and silver metal forms. The carvings or the made sculptures will be turned into exclusive pieces of jewelleries by the expert artisans of the shop. The customers will be given the preference of creating customised t-shirts or jewellery with their own respective designs or they will be also provided with the option of selecting designs from the catalogues offered by the shop itself. This exceptional idea of customising gifts particularly in the form of jewellery will provide an innovative edge to the products which will help the gift shop attain competitive advantage over its other competitors. Customise your gift will also aim towards offering certain special services to its respective customers which will include credit card service, gift card, home delivery and even membership cards which can be used for special discounts. The facility of online shopping and ordering of products has also been planned which is supposed to be executed in due course of time. The various existing gift shops have been usually observed to offer the similar kind of products which has turned to be relatively monotonous. The concept of the innovative products that has been developed for this particular business plan is expected to fill this mentioned gap or boredom as a result of which the customers are believed to get lured towards these innovative products to a great degree. Modern and advanced technology has been planned to be implemented for the purpose of developing the customised products that will be offered by the gift shop. Few artisans has also been planned to be included in the workforce who would possess great proficiencies and skills in developing or giving shape to the customised pieces of jewelleries from the sculptures or carvings made by the customers. The services and the unique products that are intended to be offered by the gift shop will not entail the requirement of any patented or copyright ownership which will make the work increasingly hassle-free. This particular business concept and plan is believed to entail increased potential in terms of future growth. The common idea relating to gifts is the aspect of emotional attachment. The pioneering concept of customised gifts that has been planned for this business is believed to augment the degree of emotional attachment with the advantage of personal touch which will be offered by the gift shop. The tailor-made products will facilitate to offer the respective customers a personal association with regard to the product which will be purchased. Additional service of printing products will also be offered by the gift shop which will further add to the uniqueness of the business. This will facilitate the customers to bring along their personal pictures as well as mementos or even e-mail the digital form of images for the reason of creating customised products such as t-shirts, greeting cards, coffee mugs and other sort of decorative pieces. Therefore, it can be well inferred from the uniquely developed product ideas of the business that it will prove to be quite appealing to the customers, which will trigger popularity of the products as well as the offered services within the existing along with prospective customers. The unique concept of products will also aid in luring fresh customers with ease. It can be well comprehended that the prospect of future growth for this business can be considered to be quite bright which will further facilitate the expansion of the business in other parts of Riyadh as well as in other countries in the future. The Market A wise and appropriate marketing plan needs to be structured for the gift shop which will help to successfully penetrate the fresh market and lure the prospective customers towards the offered products as well as services. This implies that the strategy for marketing should be meticulously developed. The gift shop or rather the business will aim to target and cater to the requirements of the young age group from 18 to 35 years chiefly along with gradually expanding its focus on the middle-age groups that is above 35 years. The young age group has been ascertained to be the chief target market as they are believed to be increasingly demanding and tend to look for excitement as well as innovation in the products as well as the services. The young buyers are learnt and observed to explore fresh products and show a preference for tailor-made or customised products. The desire and requirement for fresh and innovative products of the young buyers is expected to be fulfilled with the unique products that will be offered by the gift shop. It needs to be stated in this regard that the old aged customers will not be ignored as they are considered to be wealthy as well as innovative with more disposable income compared to the young buyers. There are stated to be few other aspects other than the target market that are closely and strongly associated with the business. The surrounding environment is believed to create a strong influence while starting a fresh business. To comprehend the scenario effectively, it is needed to explore the environment with the help of a PEST analysis. The PEST analysis reveals that the political environment of Riyadh is considered to be quite steady which implies that the steadiness of the business environment as well. The country is believed to promote business for the reason of economic development which signifies a positive growth for the business. The economic condition of the country is stated to be flourishing which implies that there will be policies which will favour or encourage the establishment of fresh businesses along with strong investment prospects. The people of Riyadh has been learnt to indulge in shopping activities during their leisure time and even display an affinity towards exploring fresh and innovative products which will certainly prove to be beneficial for the business. The country is observed to be growing in terms of technology which means that superior technology can be availed along with cheap proficient labour. This will result in lesser production expenses accompanied with superior standards in quality. Competitors The gift shop industry has been stated to be quite large in Riyadh with the presence of numerous gift shops. However, it needs to be mentioned in this context that the planned business idea or the offered products will be quite different than the ones which are usually offered by the other gift shops. The existing gift shops have been learnt to offer their products from their respective outlets without providing the facility of home delivery. This implies that the products as well services offered will stand apart in comparison to the others implying that the degree of competition faced in the initial period will be quite less. The strengths of the planned business that is of the gift shop will be the unique gift products as well as services like the service of home delivery and membership cards. The products offered will be reasonably cheaper than the other gift shops. The technology that is supposed to be used for the making of the gift products will be latest and up to the industry standards. Skilled craftsmen along with efficient staffs and superior quality of customer service will be the strong aspects of the business. The location of the shop in the mall will also be an advantage as it will help significantly to lure customers easily. The people of Riyadh will be introduced to this fresh concept of gifts which implies that not much information will be available to them. This will further mean that significant investments need to be made for the reason of informative advertising. There will be immense opportunities in terms of the fresh concept and unique products that is intended to be offered. The new and special kind of services will also prove advantageous. The combination of the special services and the unique products will help to lure majority of the customers. There is expected to be less competition during the initial period of the business but the competition is expected to intensify with time. There will be threats in the future from the competitors in terms of imitating and offering the similar products along with the services. Financial Issues The initial expenses will include rent of the shop, stock, wages, bills and tools. The breakup of the individual expenses is provided below: Rent ?15,000 Stock ?30,000 Wages 35% commission of the expected revenue (?35,000) i.e. ?12,250. Bills ?6,000 Tools ?2,500 Total ?65,750 An estimation of the start up and the running expenses has been provided above and the expected sales or turnover for the month has been estimated to be ?35,000. The cash flow considerations have also been depicted in the table below: Pro Forma Cash Flow Year 1 Cash Received Cash from operations Cash Sales ?560,000 Subtotal Cash from Operations ?560,000 Additional cash received Sales tax, VAT, HST/GST received ?45,750 New current borrowing ?0 New other liabilities (interest-free) ?0 New long term liabilities ?0 Sales of other current assets ?0 Sales of long term assets ?0 New investment received ?0 Subtotal Cash Received ?605750 Expenditures Expenditures from operations Cash spending ?457000 Bill payments ?30,000 Subtotal Spent on Operations ?487000 Additional cash spent Sales tax, VAT, HST/GST paid out ?45,750 Principal repayment of current borrowing ?21600 Other liabilities principal repayment ?0 Long term liabilities principal repayment ?0 Purchase other current assets ?0 Purchase long term assets ?0 Dividends ?0 Subtotal Cash Spent ?554350 Net Cash Flow ?51400 The profit margin on the products as well as services has been planned to be kept around 50% on the material cost owing to the advantage of the location and the target customers. Bank loans have been considered to be the possible funding source for the business. There will be risks involved with such loans as, the interest for such loans are learnt to be high and irrespective of the financial health of the business the interest needs to be paid regularly. Failure of payment will involve the risk of taking possession of the business by the bank. Operational Issues The shop will be located in a popular shopping mall which will help to lure the intended target customers for the shop. The location of the shop will provide vast accessibility to a large number of individuals. The increased footfalls of the mall are expected to bring in revenue for the shop and also cover the rent expense. The supply of labour is also expected to be high owing to the huge workforce employed in the mall. The present number of employees considered for the shop will be five at present. Three employees will be in charge of handling and supervising the regular activities and attending the customers and two skilled craftsmen will be employed for developing the gift products. The shop will call for the requirement of a trade license initially along with the necessary clearances from the concerned authorities for the commencement of the business. A legal contract of rent will also be required to be entered into with the authorities of the shopping mall. Conclusion The above provided business plan is intended to entail the complete procedures, guidelines and details of starting a business in Saudi Arabia. The compliance with the above business proposal will ensure the successful commencement of the intended business with a detailed structured marketing, financial as well as operational approach which will further make the establishment process simpler. Bibliography Sant, T., 2004. Persuasive Business Proposals: Writing To Win More Customers, Clients, and Contracts. 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