The Secrets of Creating Successful Business Plans - Assignment Example

? Comparison of Business Plans Comparison of Business Plans Purpose of the Report This report aims to compare two business plans used by New Look, Inc and Bluespa. The report compares different aspects of the two business plans. This means that the report will provide a description of the weaknesses and strengths of the two business plans. The report will target the market and operational strategies outlined in the two business plans. Additionally, the report will highlight the differences between the financial layouts of the two firms, and provide recommendations that seek to improve the approaches used by the two companies. The recommendations seek to prevent the encroachment of weaknesses in the business plans. Finally, the report will have a section for personal opinions and lessons learned from the business plans. Importance of a Business Plan Business plans are documentations that facilitate planning. An ideal business plan should cover three crucial business aspects, which are financial, marketplace and business concept. A business plan is important because it clarifies a company’s direction (DeThomas & Derammelaere, 2008). A business plan defines a business and its operations. Additionally, the plan outlines the business’s intention. This means that the plan clarifies the directions and purpose of the business. A business plan also outlines a business’s future direction because businesses adapt and evolve over time. The business plan factors the business’s direction and growth plan (Abrams, 2003). Additionally, the plan highlights strategies that the plan will use in case of market change and slow growth trends. A business plan attracts financing by showing the company’s potential to make profits. What a Business Plan Should Cover Differences in business environments provide challenges in the formulation of one business plan for all businesses. An ideal business plan should have a business concept, market and financial strategies (DeThomas & Derammelaere, 2008). Besides these three business sections, the business plan should have other sections that provide a comprehensive business description (Finch, 2013). These sections are business design and development, market strategy, financial information, competition analysis and operations and administration. Description of the Business Plans Bluespa Structure of the Company Bluespa is a family based company owned by Ray and Barbara Brunner. The two also double up as the founders of the company. Bluespa has an idea board that comprises of seven members. Mr. Ray Brunner is an additional member of the board. Additionally, the board will have three outside directors and two representatives chosen by Mr. Brunner and the firm’s major investors (Bplans, 2013). Mr. and Mrs. Brunner have a combined experience of 65 years in the retail industry. The two investors have senior management qualifications, and they held various management positions in their previous employment. The two founded the firm, which has its office in Portland, Oregon. From the first year to the fifth year of operations, the firm seeks to grow its head count from 10 to 65 (Bplans, 2013). The majority of this growth in head count is expected to come from store personnel. The rest of the staff will come from support staff. Products Provided Bluespa deals with body and skin care products that are developed by the company’s contact facilities based in California and France. The company also deals with apparel products produced through outsourcing with a sport-related apparel manufacturer. The production of accessories is managed by contract with the manufacturer of sports-related accessories such as totes, bags and socks. The company’s product line includes fitness and skin care apparel. Within the skin care line, the firm offers different products such as eye makeup removers, facial scrubs, cleansing creams, body lotions and masks (Bplans, 2013). Within the fitness apparel line, the firm offers Lycra products such as shorts and tights. New Look, Inc Company Structure New Look, Inc has a broad company structure compared to the structure of Bluespa. The firm also has a strong management team characterized by high-level management. The firm has a chief executive officer who is also the firm’s president. The business plan of New Look, Inc does not provide the names of the firm’s top management. The company’s management structure has seven participants. The firm develops clothing line, in addition to providing support through promotion and advertising campaigns (Bplans, 2013). The management of the firm plans to strengthen its partnership with retailers through the provision of brand awareness. Products Provided The products section of the business plan does not provide a list of products made by the firm. The products section only states that the firm will deal with clothing line. Additionally, the product section outlines the pricing strategy and manufacturing process. The business plan states that the firm will price its products for the high-end customers. This pricing aims to reflect the exclusiveness and quality of the products by the firm. The plan also states that the firm intends to use high-end materials such as wool blend, cashmere and high gauge denim during manufacturing (Bplans, 2013). This contrasts the product section of Bluespa, which clearly outlines company’s products. Strongest and Weakest Components of Each Plan Layout of Financial Report Bluespa Effective and comprehensive business plans have sections that outline the business’s financial plan and strategy (DeThomas & Derammelaere, 2008). The financial layout section is vital because it shows the potentials of the business in making profits. The financial layout also shows financial information and data, which is vital during the calculation and analysis of the firm’s income, expenses and cash flow. Bluespa does not have a clear financial section. The financial elements of the firm are spread out in the business plan. Despite the lack of a comprehensive financial section, the business pan has included close to all vital elements of the section for financials (Bplans, 2013). These include aspects such as cash flow, projected losses and profits, projected sales growth, break-even analysis and start-up funding and requirements. The financial information is presented using effective tools such as graphs, tables and charts. The presentation of data and information using these presentation tools simplifies the analysis and evaluation of the firm’s financial position and statement (Bplans, 2013). It is essential to note that it is easy to comprehend financial data and information presented using these tools compared to information presented using literature and figures. According to the financial information provided by Bluespa, the firm seems to have a strong financial position and plan. The firm has a total backing of $420,000 against total liabilities and capital of $249,500. This shows that the firm has a stable cash flow. The firm also aims to have an increase in net cash flow from the first to the third years. From the first month of operations to the 12th month, the firm projects an increase in sales volume by $130,000. The firm also projects the sales volume to increase yearly from the first to the third year (Bplans, 2013). The profit and loss account of the firm shows that Bluespa will have increased profits by 2.5 percent. Increased net worth of the company is vital for attracting investors and financing. The financial layout of Bluespa has several weaknesses. For instance, the report does not provide a summary of the firm’s cash needs. This is vital for attracting financiers. Most importantly, the financial reports provided by the firm do not have textual descriptions. This challenges the comprehension of information. This also challenges the description of variables in the charts and graphs (Bplans, 2013). Bluespa does not provide a section for assumptions, which is vital during risk analysis. New Look, Inc New Look, Inc has a clear and comprehensive financial section that outlines all vital financial elements of the firm. The financial reports are presented using presentation tools such as tables, charts and graphs. Unlike, Bluespa, New Look, Inc has incorporated vital textual information for each data presentation. This helps in the comprehension of the financial information. New Look, Inc has identified crucial features of its financial data by differentiating graphical elements. For instance, the graph titled highlights has blue bars that show sales, brown bars that show gross margin and green bars that show net profit. The business plan has also highlighted the firm’s financial needs. Despite the in depth outline of the financial aspects of the business plan, New Look, Inc business plan had one weakness. The cash flow of the firm increased slowly from the first to the third year (Bplans, 2013). This is different from Bluespa’s cash flow that increases rapidly during the same period. Because of the slow increase in cash flow, the firm faces challenges in attracting investors. Research about Target Market Bluespa The market analysis section of Bluespa’s business plan presents a summary of market outcome and market analysis. The marketing section has several strengths especially in outlining consumer strength and brand recognition. The firm has clearly outlined expected market outcomes and consumer capabilities to buy the firm’s products. The business plan identifies the high average income of its customers as a leading factor in consumer capabilities to purchase the company’s products (Bplans, 2013). However, Bluespa has failed to provide a description of the market trend. It is vital to note that strong business plans provide sections of trend analysis. New Look, Inc The firm’s market section is strong because it describes the company’s potential market. The firm has described its potential clients who include high-end customers. The marketing section is detailed and it provides regulatory and market trends, unlike Bluespa (Bplans, 2013). The weakness of this section is the tendency of the firm to focus on competitors instead of the products it offers. Uniqueness That Differentiate the Company from Its Competitors Bluespa Bluespa is ideally located in an up market region, which provides accessibility to the market. The firm does not have to perform manufacturing activities because it contracts these activities. This confers advantages because it helps in cutting operational costs (Truitt, 2001). The firm has been able to offer products at a low price than the competitors. The firm has weaknesses in resourcing (Bplans, 2013). The firm does not have adequate employees for operational activities. The firm also has a weak pricing strategy that targets a broad market instead of a specific market segment. New Look, Inc The firm is strategically located to benefit from the high-end customers. Additionally, the location of the firm is vital for market accessibility. The firm uses quality materials in the manufacture of its products. Additionally, the firm uses innovative strategies during the manufacture of its products. The main weakness of the firm is the high prices of its products (Bplans, 2013). The firm targets only the high-end customers, which means that the firm pursues exclusivity. Improvements and Innovation The two firms need to present detailed and comprehensive financial reports. This will enable financiers and members to understand the business and financial position of the companies (Hisrich & Kearney, 2012). Bluespa needs to differentiate its pricing strategy into different market segments. This is vital for creating a brand image that focuses on the price-quality aspect. The formation of a brand image is also vital for brand positioning. The firms should also integrate marketing strategies in their market section (Bplans, 2013). Innovativeness is vital for conferring advantages in the operations activities of the two firms. Statement of Learned Aspects about Business Planning I have learned that a business plan is vital for outlining a company’s business activities from this analysis. A business plan also provides clarity of the business intentions, future and operations. I have also learned that a business plan is a vital tool for attracting investors and that an effective business plan requires realistic financial information (Bplans, 2013). Investors and financiers look for realistic financial data when they seek to support an enterprise. Conclusion Business plans are vital business documents that play a major role in attracting financers by outlining the business activities of a firm and clarifying the direction of the business. A comparison of the business plans of Bluespa and New Look, Inc shows different aspects of a business plan. In this case, New Look, Inc has a strong business plan because of its description of the financial and market sections. Bluespa has numerous and diversified products unlike New Look, Inc. References Abrams, R. M. (2003). The successful business plan: Secrets & strategies. Palo Alto, Calif: The Bplans. (2013). Clothing manufacturer business plan. New Look, Inc. Bplans. Retrieved from < http://www.bplans.com/clothing_manufacturer_business_plan/executive_summary_fc.php#.UhiXBn8ixRI> Bplans. (2013). Cosmetics manufacturer business plan. Bluespa. Bplans. Retrieved from http://www.bplans.com/cosmetics_manufacturing_business_plan/company_summary_fc.php#.UhijM38ixRI> DeThomas, A., & Derammelaere, S. A. (2008). Writing a convincing business plan. Hauppauge, N.Y: Barron's Educational Series. Finch, B. (2013). How to Write a Business Plan. London: Kogan Page. Hisrich, R. D., & Kearney, C. (2012). Corporate entrepreneurship: How to create a thriving entrepreneurial spirit throughout your company. New York: McGraw-Hill. Planning Shop. Truitt, W. B. (2001). Business planning: A comprehensive framework and process. Westport, CT: Quorum Books. Read More