Mobile Bagala Business Description - Coursework Example

Mobile Baqala Business Plan Executive summary Mobile Baqala is a convenient retail store that provides merchandising business to retailers within their proximity without having to travel long distances or attend physical markets to gain access to goods and services. The business will operate as the first mobile store within the United Arab Emirates and some parts of Abu Dhabi as a grocery revolutionary store with mobile units in different locations around Abu Dhabi. The planned business is unique in nature with effective and efficient design serving both local population and visitors. The targeted customers for Mobile Baqala mainly come from the United Arab Emirates and the Abu Dhabi region. However, due to its projected expansive nature, the business will cover regions such as Al Falah, Al Shamkha and Yas. The business will be expected to expand outside Abu Dhabi Emirate in future catering to embrace domestic customers. Introduction Mobile Baqala is a convenient retail store that provides merchandising business to retailers at convenience location without been required to go for long distances to find physical markets for goods and services that they need. The business is mainly designed to stock a variety of consumable items such as soft drinks eggs and milk amongst other products that are used by customers on a daily basis. It has been pointed out that most families experience difficulties in accessing basic commodities especially in areas such as Al shamka thus the need for such kind of a business. Apparently, majority of societal members have had problems in making their daily purchases of consumable items especially around Al Falah, Al Shamkha and Yas. As such, the population has agreed that such areas are of high suitability for the store and more perfect to stock a variety of both local and imported produce. Business Description Mobile Bagala is meant to operate as mobile store within the United Arab Emirates and some parts of Abu Dhabi as a grocery revolutionary storey that moves like a mobile unit in different locations. The business is planned to be unique in nature with effective and efficient design serving both local population and visitors. Having embraced a strategy to serve customers around the clock, the business is projected to achieve its objective as the future leading grocer in the United Arab Emirates serving the Arab population with a consistent supply of daily consumables. Besides, the business is designed with an initiative that would ensure consistency in supply of products to customers while creating job openings around its trading zones. Having engaged the government and external stakeholders, the business would operate under safety and legal policies that are deemed critical for consumers. Marketing analysis The targeted customers for Mobile Baqala would mainly come from areas around Abu Dhabi. However, due to its projected expansive nature, the business will cover regions such as Al Falah, Al Shamkha and Yas that are deemed relevant for potential customers. Since the business is situated within the heartland of United Arab Emirates, population from that region is perceived to compose the largest population of customer margin. Alternative targeted customers are non-residence and visitors who are not members of this areas community, which may require supply of consumable products. However, as the number of potential customers continues to grow within the region, the business is expected to receive the support of loyal customers outside the initial trading zone. Market size Mobile Baqala market niche is concentrated heavily around Shamkha Area of Abu Dhabi Emirates mainly inhabited by Al-Falah community. The community occupies almost 12.5 million square meters around Abu Dhabi international airport that is approximately 140% of the potential customers. The community amounts to approximately 60,000 citizens statistically thus show a sense of potentiality for the business to reap sufficient return. In addition, other potential customers such as Al Shamkha and Yas amount to 20% and 10% respectively. Competitive analysis Dealing in products that have already been in existence within the same trading zone, Mobile Baqala expects two major competitors within its proximity of the trade. One of its closest competitors is Carrefour that is said to have been dealing in grocery for the past fifteen years in the same region. Carrefour has a total 4 outlets that sell consumable products to both domestic and corporate clients. However, their customer outreach is a bit limited because they do not have mobile store that can reach a good number of customers as compared to Mobile Baqala. The second competitor Lulu Hypermarket found within a distance of 1000 kilometers. Lulu Hypermarket is dominant within Abu Dhabi thus offering prime shopping for domestic and foreign visitors. Nevertheless, Mobile Baqala perceives to build its fame by offering high-quality products, advertising and market promotions that would see the organization achieving its competitive edge. Besides, the organization is set up mobile vans at major streets hence taking the advantage of walk by traffic. Mobile Baqala has also been designed to offer convenience strategy to customers who would then find it easier to locate tack shops. Such vans would be located within reach such that customers may not need to travel long distances to other vendors to purchase grocery products. Moreover, Mobile Baqala’s goal is to provide underserved market in the United Arab Emirates, the organizational outlets are meant to provide variety of products at discounted prices. The imminent intention of the firm is to occupy 20% of the market by concentrating in areas where there are potential customers. In conclusion, the organization has laid policies to engaged only 5% of its total returns to incur promotion costs. Operation The business will operate within Abu Dhabi Emirate catering for both residents and visitors customers. Besides, it is perceived that Mobile Baqala would reap more advantage because of its potentiality to reach to reach customers’ base. Moreover, the business will be carried on a mobile van thus making it more convenient and within reach. operations and dissemination of organizational products will be done as illustrate in the diagram below Management summary It is proposed that employees of the Mobile Baqala will be encouraged to make good use of their skills and physical energy without any limits. However, every employee’s responsibility will be assigned based on the potentiality, knowledge and experience. The organization is expected to deliver as per the customers’ requirements thus experience strengths; skills and personality are considered critical. Moreover, the organization is expected to do physical assessment of the management after duration of six months and determine their level of effectiveness through customers then advice on a positive course of action. Organizational management • Business Manager • Quality Assurance Manager • Financial Controller Designation / TYPE No. Owner 3 Shift Supervisor(s) 2 Seller(s) 6 (12 hr Shift according to MOL Laws) 2 (Back-up – emergency sellers cover other employees were on leave(s)- sick, annual, compassionate) Driver(s) 6 (12 hr Shift according to MOL Laws) 2 (Back-up – emergency sellers cover other employees were on leave(s)- sick, annual, compassionate) (act as a guard and Sales role) Cleaner(s) 3 Total 27 The above number of employees are planned to accommodate the business need of three Mobile Baqalas as a start-up. Note that job descriptions on the above job titles will follow the generic rule of thumb. For instance, supervisors will be responsible for monitoring the performance of the employees; while cleaners are expect to handle hygiene in vehicles and bathrooms among other activities. Management structure Financial plan The development of Mobile Baqala will be based on a positive cash balance and documents drafted to certify physical transactions. However, the organization will not be engaged on retail credit transactions because of its mobility in nature and dealing in consumable products. Moreover, the organizations expect to plough back some of its profits to enhance its expansion. Financial controller will be responsible for audit reports of the organization to enable smooth operation of the business. Since the business is not fully operational, no financial statements have been made yet, but the following statements are expected. Balance Sheet Balance sheet will shows a list of forecasted business’ assets, liabilities and equity. Lenders and financial personnel will also use the above to provide them with information concerning asset expansion. Such information will help them make a projected balance sheet. However, the business would engage various assumptions on how individual balance sheet items change over time. The proposed balanced sheet as at the start of the business will be as shown below Balance sheet for Mobile Baqala as at start of the business ASSETS Current Assets Cash $ 20,000 Accounts receivable $ 15,000 Inventory $ 150,000 Total Current Assets $ 185,000 Non-Current Assets equipment $ 50,000 Business premises $ 650,000 vans $ 70,000 Total Non-Current Assets $ 770,000 TOTAL ASSETS 955,000   Current Liabilities Accounts payable $ 25,000 Bank overdraft $ 10,000 Credit card debt $ 5,000 Tax liability $ 30,000 Total Current Liabilities $ 70,000 Non-Current Liabilities Bank loans 1 $ 450,000 Items bought on credit 2 $ 50,000 Total Non-Current Liabilities $ 500,000 TOTAL LIABILITIES 570,000   NET ASSETS 385,000   OWNERS EQUITY 385,000   Cash flow statement Mobile Baqala Cash Flow Statement For the first year Trading Period   Cash Flows from Operating Activities: Operating Income (EBIT) $489,000 Depreciation Expense 112,400 Loss on Sale of Equipment 7,300 Gain on Sale of Land −51,000 Increase in Accounts Receivable −84,664 Decrease in Prepaid Expenses 8,000 Decrease in Accounts Payable −97,370 Decrease in Accrued Expenses −113,860 Net Cash Flow from Operating Activities $269,806 Cash Flows from Investing Activities: Sale of Equipment $89,000 Purchase of Equipment −100,000 Net Cash Flow from Investing Activities 136,000   Cash Flows from Financing Activities: Payment of Dividends −$90,000 Payment of Bond Payable −200,000 Net Cash Flow from Financing Activities −290,000 Net Change in Cash $115,806 Beginning Cash Balance 319,730 Ending Cash Balance $435,536 Proposed cash flow statement for the business Mobile Baqala income statement during the first financial trading period Income     Gross Sales 346,400    Less returns and allowances 1,000     Net Sales   345,400   Cost of Goods    Merchandise Inventory, January 1 160,000    Purchases 90,000    Freight Charges   2,000    Total Merchandise Handled 252,000      Less Inventory, December 31 100,000     Cost of Goods Sold   152,000   Gross Profit   193,400   Interest Income  500   Total Income 193,900   Expenses     Salaries 68,250   Utilities 5,800   Rent 23,000   Office Supplies 2,250   Insurance 3,900   Advertising 8,650   Telephone 2,700   Travel and Entertainment 2,550   Dues & Subscriptions 1,100   Interest Paid 2,140   Repairs & Maintenance 1,250   Taxes & Licenses 11,700   Total Expenses 133,290   Net Income $60,110 Break-Even Break-even point is essential in covering fixed and variable costs. At the break-even, the profit equals zero. Break-even will only apply when the expenses of the firm shall be high, and the variable cost per unit will be low. Moreover, it will also be applicable where the business encounters neither gains nor losses. Critical risk analysis Strengths- The business is unique in nature, expected to be carried on mobile vans thus able to reach a wider customers margin. Weakness- The organization does not have a good financial support and is expected incurs a lot of expenses to deliver products to customer’s proximities. Opportunities – The business is expected to have an expansive network thus a projection in economic returns is expected. Threats- The business is experiencing rivalry from other competitors such opening a grocery stores within surrounded areas. Deployment plan The business is projected to be deployed for eight months then evaluation will be carried to determine if it is substantial enough to continue. During that period, the business will operate according to the legal policies of Abu Dhabi and the United Arab emirates. Read More