Point Chocolate Business - Example

POINT CHOCOLATE BUSINESS PLAN Table of Contents INTRODUCTION 4 Objectives of the point chocolate 4 Point Chocolate Mission 4 Organizational Summary 5 The point chocolate business ownership structure 6 THE PRODUCT AND SERVICE 6 The products offered by Point Chocolate 6 Benefits of our products 7 The unique selling position (USP) 8 Protection from competition 8 INDUSTRY ANALYSIS 10 Company and industry 10 MARKETING RESEARCH 12 MARKET STRATEGY 13 Pricing Strategy 13 Market segmentation 14 Target Market 15 Sales tactics (increasing sale tactics) 17 Product improvement strategy 17 PROCESSES 18 Information flow 18 Equipment 18 Quality Control 18 PERSONELL 19 Organizational Chart 20 Functions and Responsibilities of the departments 21 21 Training Needs 22 ACTION PLAN 23 FINANCIAL PLAN 24 Bibliography 25 Appendix 28 EXECUTIVE SUMMARY Point chocolate is a business that is in its conception state as outlined in this proposal. The business concept is based on a firm research base provided by hours of research concerning the chocolate market and chocolate consumption industry. As indicated by the Curriculum Vitae enclosed in the plan highlights, as the sole proprietor I hold formal educations qualification in the field area of business management and entrepreneurship, have researched a lot on the basic viability factors that influence this nature of business across different geographical localities. Based on this rationale, my familiarity with the industry concept ideas is outstanding giving me an upper hand with the foundational information required at this initial platform to launch a successful chocolate business venture. The major reason for my establishing the business is grounded on the outcome of the results of the survey of potential market niches that exists within the Fuxin market. During the survey research it was evident that china’s chocolate market has not been optimally exploited by the few importers of western based chocolate brands, this indicated a potential demand opportunity that was sustainable. I have financed the business idea from my personal savings, plus an additional loan from the family savings. The intention is to service the family extended loan within the first two years of operations. I am confident that Point Chocolate will be established and built on a firm foundation, inspired by the drive to succeed in an unexploited market. The Business proposal Plan has been accomplished on the basis of thorough research and consultation from Entrepreneurship Research and Development Agency, and the Agency’s input is shaped to supplement my business concept and facilitate the a realization of the feasibility of the proposal overview of the viability of the proposal. Special consideration has been focused on developing an assortment of chocolate flavors that will stress the unique selling position that the business’s products and services as it seeks to launch and penetrate a new market. Financial analysis outlined shows that the point chocolate seeks to achieve both profits margins and positive cash flow within the first year. The company seeks to attain a significant net profit of 20 percent in the second year of operation. INTRODUCTION Objectives of the point chocolate Attaining a net profit of 20 percent within the second year of launch Gross margin of a value higher than 70 percent Net income of 10 percent of sales within the first year of operations Point Chocolate Mission Point chocolate company offers high quality flavored chocolate, various flavored chocolate for general all age group consumption provides high-quality alternate chocolate experience to all chocolate enthusiasts who are unable to enjoy their international brands. Consumers will be informed that consumption of point chocolate products is enriched with vigorously tested food products that not only satisfies their urge for chocolates but instills an experience enriched with nutritional substances recommended by nutritionist. Point chocolate must be able to sustain a financial balance, charging favorable valued prices for its products and services, and delivering of an even exceptional quality value standards that matches and surpasses the international standards of established chocolate producers (Oliver 2014). Keys to success 1. Excellence in fulfillment of the promise of client satisfaction- complete and utmost hospitable treatment of customer, reliable, trustworthy products and guaranteed satisfaction of value for money. 2. Developing market visibility to foresee emerging trends in the chocolate industry ensuring a competitive advantage in the market. 3. Leveraging from a specialized perspective of a single brand offer to multiple brands after a total conceptualization of each brand and how the market reacts towards it. Organizational Summary Point chocolate is a new company providing high quality chocolate flavors in the local Fuxin market, a chocolate bar- where family and friends can converge to share memories while enjoying tastes of diverse chocolate flavors sampled from recipes across the world. The business will focus primarily on two areas for its growth and expansion in the Fuxin market. Providing residents of Fuxin with a constant reliable supply of chocolate to meet the local demand. Providing the city environs and local, domestic tourist customer base with brands of locally flavored spiced chocolate compositions. As the organization expands with growth, it will focus on venturing into the neighboring towns market and institutional facilities which offer a wide customer base (Oliver 2014). The business will also seek to create additional supply outlets at various institutions that cover the target market segments. The point chocolate business ownership structure Point chocolate business will be a sole proprietorship business entity. The daily running activities will be conducted by me as the sole owner. With the expansion, contracting additional staff to help facilitate management process and service delivery will be necessary. As the owner, all management and control element decisions will be vested with me. Legal accountability and finances of the business including debts, losses and profits will be my responsibility as the owner. THE PRODUCT AND SERVICE The products offered by Point Chocolate To channel point chocolate concept into a thriving business venture, it is essential to stay acquainted with all emerging trends in the local and international chocolate market. For instance, awareness of new consumer chocolate flavor preferences is very essential. In addition, creative packaging designs and tie-ins with other complimentary products will help enhance point chocolate appearance and brand image in the local market. This factor prompts for vigilance in monitoring other industries associated with the chocolate industry to identify such trends that influence significantly the chocolate market and the industry in general. The chocolate sweeties in our collections are cut and shaped to suit different needs. The unique flavors chocolates used in our collection take a focal stage and will be enhanced by supplementing ingredients. Small, elegant, there are roughly 50 pieces per pound. Varieties will be offered in our signature packaging box, stamped with our logo seal and knotted with a ribbon, our everyday collection assortment will be packaged in a golden paper box as small hampers for celebratory events. The products recommendation is that it should be stored in a cool and dry place. But to appreciate the full experience of various flavors, using other allocated lobby to enjoy your flavors is recommended. The shop will be in three compartments where customers can freely enjoy their favorite flavors: the fresh chocolate zone with fountain mounted at the center, the bar section where customers are served on request and a private box with fixed chairs where customers can enjoy their flavors with exclusive privacy. Some of the few flavors to be offered include Chamomile tea chocolate infused with a ganache top with a partial almond and enrobed in dark chocolate (contains no alcohol), Dark and milk interior Caribbean spiced flavor, rum and cocoa nibs coated with dark chocolate and dotted with nibs (contains no nut products), Dark chocolate containing fresh ginger root coating with an insinuation of crystallized ginger (contains no alcohol and nuts). Benefits of our products The Fuxin local market is marred by a shortage of chocolate stores apart from the few supermarkets that retail chocolates at extremely high prices. Our product seeks to address the potential high demand for chocolate in Fuxin town and its environs with its unique assortment dark chocolates (Bayne 1999). Our chocolate products are a rich in sources of catechins that are polyphenols categorized under the flavanol group. The flavanol group polyphenol products protect the body from cancer, heart disease, and various other medical conditions (Marketing China. 2012). The secret behind our chocolate punch is cacao, which offers a sweet distinctive taste. Packed with an assortment of healthy chemicals such as flavonoids and theobromine. The unique selling position (USP) The Point Chocolate enjoys three main unique feature in its selling position. Firstly, the products offered has unique, authentic taste and is of high quality derived from the western culture chocolate production techniques. The store will provide an elegant and considerate cool environment complimented by a professional service waiting services to customers. The stores division into compartments also provides choice to customers to choose their favorite spot to enjoy their chocolate whether in the private lobby or chocolate bar compartment. Amongst its unique features lies the fresh-made chocolate section that has a chocolate fountain that customers are offered samples to taste before making orders. According to the research, so far, Fuxin town does not have a company producing freshly made chocolate, the city relies on imported chocolate from the western countries (Marketing China. 2012). This concept makes point chocolate a unique, innovative business concept that is viable to prosper in Fuxin because of its local orientation. The idea seeks to attract local youths and other age groups to a culture of chocolate consumption. Moreover, the Point Chocolate will develop other outlet stores with time (this is in a bid to have a total domination of the china chocolate market). The unique selling position is geared towards countering the Chinese culture of appreciating local tea consumption. In this line, the bar will be an outstanding feature of the serene environment providing a unique atmosphere for a luxury meeting place. Protection from competition The rate of change in the Fuxin chocolate market means that point chocolate must continuously monitor competition threats to the business and prepare to adjust and counter new threats emerge. Point Chocolate will involve the use of the Internet to monitor the actions of emerging and existing competitors (Marketing China. 2012). Price assessment sites that help us gauge competitor prices with our prices. The strategy for countering competition from competitors is based on three areas of focus: price competition, new products, and new competition. Price Competition strategy: To protect point chocolate market share from competitors offering low prices compared to our competitors, developing a strategy based on product strengths or cost. Whenever we have cost advantages greater than our competitors, we will utilize this ability to lower our own prices with minimal differences in profit levels. Alternatively, point chocolate will consider outsourcing production chocolate factory that enjoys low production cost. Point chocolate will overcome price challenges of competitor products by offering consumer’s products that signify value addition. Including free and ample space and seats to enjoy chocolate representing a good value addition (Marketing China. 2012). New Products: whenever threats of new superior chocolate flavors compared to our products emerge in the market, point chocolate will incorporate new chocolate product development strategies in our long-term strategy schedule to anticipate and counter such threats. We will overcome the short term through a strategy of liaising with European based producers of chocolate to source from them. New Competitors: whenever new competitors with a solid market offering threaten to diminish our market share. Point chocolate will protect its customer base by initiating a customer loyalty approach which will enhance the barrier factors to entry for competition. Introduction of customer loyalty packages that reward customers for continuing their consumption of our products. The increase in barriers to entry will also be implemented through formation of strategic alliances with raw material suppliers of vital components of chocolate production to constrain access for potential new competitors. Because of already established market base by existing supermarket suppliers of chocolate, point chocolate will need to employ in defensive tactics to overcome the various challenges posed by this competitors. The principal purpose of this defensive strategies will be to make a potential competition opportunities unattractive and help discourage potential competitors from attacking our products in the market. The goal being to try and shape the expectations of the industry’s profitability and convince the competition that the possible returns on investing in the chocolate market will not warrant investing in or adding investments in for already investing competition. INDUSTRY ANALYSIS Company and industry The Fuxin city economy suffers from the over-exploitation of coal as the major economic activity, which is falling low in supply. To avoid this over-exploitation Fuxin city is trying to diversify its industries to alternate environmental friendly economic activities to sustain the economy. Measures have been implemented including declaration of some parts of the city as special economic zones to help attract international investment. This concept idea implemented by the city will play a key role in attracting people to the region hence guaranteeing a market for chocolate producers and suppliers in Fuxin market (Hollensen 2015). The chocolate industry in the china specifically the Fuxin chocolate market is fairly competitive, and Point Chocolate Venture must be creative and innovative if they are to launch dominant competitive position in the market. The key players in the market are foreign-based chocolate producers that account for almost more than 70 percent of the total market share. Their domination position in the market is backed by many outlet supermarkets that supply their brands to the local market. Their monopolistic position is characterized by high prices of their products hence making it barely affordable to local consumers (Hollensen 2015). The Market niche evidently present, hence, an opportunity that Point Chocolate Venture can optimally exploit with its unique designed chocolate packages to make profits from the chocolate industry. There exist three basic competition segments in China’s chocolate industry. The first segment is based on the Dove and Ferroro, and other foreign brands dominate the major market share because of their products of high-grade chocolate. The joint-stock brands majorly dominate the middle-grade chocolate market. Producers in this sector include Le Conte and Kaisa Vuitton. The final segment of players in the market compose local brand products, they include Jin Sihou and the Shenfeng. The local brand products take up the low-end market of the chocolate industry. Competition is less stiff though exit and entry into the industry is not prohibited because of the free nature of the market. Because of potential for revenue and profits generation, entry into the Fuxin market is certain with well-planned strategic launch plan. Chocolate producers and suppliers adopt different ways of maintaining competitive advantage and sustaining their market share of the industry (Hollensen 2015). Point Chocolate Venture plans to offer quality service delivery and chocolate products by involving the use of modern technological infrastructure that ensures efficiency and quality of the products. The focus on technology application in production will be directed towards ensuring cost effectiveness to ensure profit maximization and cost reduction. These processes will ensure a sustained competitive edge over the competing chocolate suppliers and producers. The proximity of Point Chocolate Venture location to central business district of Fuxin will act as advantage to attracting local residents and tourist to the business venture. An initiative that aims at the total market domination of Fuxin market. MARKETING RESEARCH The challenge for point chocolate to gain a satisfactorily detailed conceptualization of the fundamentals of Fuxin chocolate market depends on the thorough research of the market trends and consumer behavior patterns. Without the insight, it is highly unlikely that the proposed marketing strategies will be effective in meeting the marketing objectives (Wenquan 2001). The Fuxin chocolate consumption has demonstrated steady growth, with varied assortment packages chocolate experiencing the strongest growth. Chocolate consumers in the city and international tourists are among the top segment exhibiting high demand characteristics. The segment favors well-spiced gourmet chocolate flavors and demands excellently packaged pieces. Fuxin with its artistic, liberal populace and extensive rainy winter seasons has traditionally presented an environment great for leisure activities associated with tourism. This activities combination with the economic diversification program supported by the government provides a good market potential for luxury chocolate. The population’s behavior shift from traditional tea assortments to modern western culture food products elevates the demand for chocolate in Fuxin market. A clear indication of potential growth opportunity for chocolate market. It is anticipatable that the demand will continue to grow with the consumer awareness and exposure to western civilization. The firm will involve extensive use of information technology that is the internet to track consumer emerging trends and competitors’ products. Monitoring will be complimented with survey practice using questionnaires (to customers) to establish the firm’s penetration level in the market. Point chocolate will strive to establish a loyal customer foundation through offering an excellent assortment of tasty chocolate in a relaxing environment created by its chocolate bar. MARKET STRATEGY In accordance with the Market research and proposed strategies to counter competition, Point Chocolate venture will employ diverse marketing schemes to acquire new consumers and intensify customer awareness of point chocolate product assortment. In food industry and its related products marketing, Public Relations and media based marketing prove to be more effective in terms of customer reach than all the contemporary strategies of marketing. Fuxin city is highly artistic and social society, and the best approach to capture the market segment will have to be a socially focused approach. With the aggressive growth of technology in the IT sector, Social internet platforms that are to be considered comprise awareness campaigns, word of mouth, billboards, fliers, social community gatherings and social media. The strategies are cheap will prove to be cost effective, in the long run, when implementing the marketing plan projected by this proposal (Hollensen 2015). Pricing Strategy The point chocolate will employ three different tactics when pricing its products to be able to address all the needs and capabilities of all the market segments. The strategies will involve decoy pricing, high-low pricing, and freemium pricing strategy. These strategy tactics will be employed at different stages of the products life cycle. The launch stage pricing strategy: The decoy pricing strategy will involve offering of two chocolate products pieces, where one piece can supplement the cost of producing the other product. This will be aimed at the youth market segment who are cautious of price attracting them with the low priced package while at the same time compensating for the cost of the other product piece. Market penetration stage: The high-low pricing method will involve pricing of some chocolate products will be higher than the chocolate products offered by other competitors in Fuxin chocolate market and through promotional practices, advertisements, and free coupon packages lower prices will be offered on crucial attractive chocolate items. The lowered promotional pricing is designed to attract customers to point chocolate where they will be offered the high priced items, as well as the promotional product. Product maturity stage: Freemium pricing strategy will be employed in allowing customers free sitting spaces and a social meeting area, but premium prices will be charged for chocolate services and other amenities in the business premise (Casadesus and Ricart 2011). Market segmentation Students or the youth population There are many learning institutions based in Fuxin city locality. These institutions account for a significant population of Fuxin’s populace. This market section contains customers of the early adulthood and youth age (15-30) age bracket. Their spending habits are significantly influenced by social practices that they undertake and peer factors surrounding their lifestyles like romance, valentines occasions, and other special events. Therefore, the ideal promotional strategy platform for the segment section is the social media platform. Holiday tourists The businesses strategies to attract the holidaying foreign tourists visiting the Fuxin locality. The strategy will be more productive through high tourist seasons of spring and autumn. Families and holiday shoppers spend flexibly during holiday seasons. The inflow of the group in Fuxin benefits the economy considerably elevating its number of consumers. The tourist group does not demonstrate any loyalty behavior patterns to any specific brand of a product rather are open to exploring. The group consists all gender affiliations with a family set up being its definitive look. Fuxin residents and corporate workforce The population of Fuxin is approximately 1.8 million and the business strives to capture as many local consumers as possible. Point chocolate’s success of any is entirely dependent on attracting this segment. The block comprises of local resident and foreign corporate workers based in Fuxin. The income level of the segment is high supported by the prosperous local economy. Target Market Point chocolate venture will focus its marketing strategies to capture the mentioned market segments using aggressive advertisement and other promotional activities. The three categories youth population, cooperate workers and tourist, and local residents represent the major dominant block of point chocolate products. A clinical implementation of the marketing plan on these market segments will ensure total dominancy of the Fuxin chocolate market by point chocolate venture. Product The point chocolate products will pursue satisfaction of the vibrant demand for chocolate products in the local market. The products will come in diverse packages of chocolate bars, chocolate drinks and fountain chocolate lobby. The diversification is aimed at creating an assortment where customers have the ability to exercise choice (Casadesus and Ricart 2011). Promotion The firm will participate in promotional and advertisements events that span three years of the pre-launching of the bubble tea, launching and post-launching phases of expanding our product. Owing to a market segment that largely depend on social platforms to get information, a lot of promotion activities will be focused on social platforms such as the internet Facebook, Twitter and social gatherings such as football matches billboards. The concept will be efficient in targeting a wide reach of potential consumers of soft drinks (Hollensen 2015). Pricing Point chocolate will differentiate the pricing tactics from other chocolate firms to start a price defensive strategy as means of attracting loyal customers of other brands. The pricing strategy will be flexible to regulate and control market trends and minimizing cost of production. Each package chocolate will have a distinctive price corresponding to the chocolate flavor additives used to make the package. No extra charges will be enforced on the customer for after sale services (Casadesus and Ricart 2011). Place Point chocolate venture will be positioned at the central business district because of the suitability of selling directly to customers. The target market groups are widely spread in the center of the city, location of point chocolate at city center is ideal because it facilitates maximization of the advantages allied to market proximity. Sales tactics (increasing sale tactics) Point chocolate will employ direct selling tactics to customers at the cholate bar. The concept will be effective because of the direct interaction with customers allowing our team to explain to customers the directly the benefits associated with the use of our products. The strategy will be complemented by following up every sale with another immediate offer. Customers usually act receptively to more offers instantly after making first purchases. Offering them another chocolate product related to the first buy can prove to be advantageous to sales volume. If you dont already have additional products or services, find or create some (Casadesus and Ricart 2011). Product improvement strategy Point chocolate will always monitor competitors, prevailing market trends, and consumer behavior to be able to develop and improve on existing products (Baidu 2008). This is in a attempt to produce superior quality products that match the market competition and satisfies consumer needs. Methods of product improvement will include: Market research on competitor products Consultation with food nutritionist experts Innovation of new ways of packaging to improve brand quality appearance Innovation of new chocolate flavors and design to add value Copying and borrowing from the western based chocolate manufacturers of chocolate PROCESSES Information flow Information flow in the organization will be in the two basic formats of vertical information communication and horizontal information communication. Vertical flow between different level hierarchies that is management to junior staff waiters of point chocolate and feedback from junior staff to management team. Horizontal flow will involve departmental communication that is finance manager communication with human resource manager. External communication between the organization and other institution will be handled by the top management team (Piercy 1994). Equipment The equipment for chocolate production that will be used to ensure efficiency in production include: Artisan Quick melter- handling 50kg/h of chocolate, Cholate molder- the machine is for shaping and ensuring different design production, cooler- producing low temperatures for chocolate storage and preservation and the industrial spice mixer blender. Chocolate fountain display machine (Baidu 2012). Quality Control Quality control technique used will involve failure testing at every departmental level to ensure that each unit meets the set standards by point cholate venture. During production, random samples will be drawn at different levels and tested. The testing will involve taste evaluation, quantity evaluation, and quality evaluation (Casadesus and Ricart 2011). The concept will ensure that all units that do not meet the set standards are identified and do not reach the customer PERSONELL CURRICULUM VITAE (FOUNDER POINT CHOCOLATE) NAME: LIU ZIYU ADDRESS: 101-503, Kangda Huayuan, Haizhou Street, Fuxin (city), Liaoning Province, China PHONE: 0418-2886886 MOBILE: 15841866886 EMAIL: 738206482@qq.com WORK EXPERIENCE Internship ICBC bank in Fuxin - June 2013 to September 2014 Marketing Director Jinyu Jade Co. Ltd 2014- present QUALIFICATIONS: Masters Business Management University of Liverpool University. TRAINING: Seminar in Chocolate production and Marketing (Paris, France) BUSINESS ADVISORS Liu Jiayu Director Winslow Business Advisor. REFEREES: Lu Xinyue, ICBC Bank managing Director. Phone: 4054352736765 INTERESTS: Chocolate enthusiast, cultural exploration, fashion blogging and marketing. Organizational Chart Functions and Responsibilities of the departments Management: the top management held by the founder is in charge of coordinating of all functioning of all other departments. Final decision making of the organization lies with the department. External communication responsibilities are done through the general manager’s office. Human Resource department: the human resource manager handles the recruitment of all new employees for the business. The department also oversees the efficiency levels of the employees. Employee appraisal practices are conducted by the human resource manager (Baidu 2008). The human resource manager is answerable to the general manager and is in charge of the management of all the junior staff workforce. Finance department: the finance manager is in charge of managing all funds of the organization. Management of funds includes employee salaries, receipt of cash, balancing of all organizational finance books, Departmental auditing. The finance manager advises the general manager on all financial decisions to be taken by point chocolate. Production department: the production team is in charge of production of chocolate that is the main product of the organization. The department also handles the sourcing of raw material for the production of chocolate. The department coordinates with the human resource department in carrying out employee appraisal and during quality control exercises (Baidu 2012). The department forms the largest group in the organization. Public Relations Department: Public relations manager works with top management in the point chocolate to build an overview image of how the organization is to be perceived, and this entails all efforts focus on giving a positive image of the organization. The point chocolate public relations department also handles external marketing decisions of the organization. In building the organizations brand the department covers the following responsibilities: developing strategies for public image projection, handling of public outreach events coordination like cooperate social responsibilities, media communication exercise through advising the general manager, social media peer campaign exercises to influence brand image and providing short-term solutions to dissatisfied customers when complaints are raised concerning product quality. General staff team: the general staff team consists of most of the workforce. The general staff team members handle various responsibilities as stipulated in their employment contracts. They are sub-divide into security personnel, cleaners, and waiters. Training Needs The organization will recruit members with relevant qualifications according to the departments positions that they are meant to fill. Training seminars will be conducted by various departments’ employees to enhance the skills and improve service delivery qualities (Baidu 2012). The waiters will be exposed to regular monthly training drills to enhance their hospitality skills in handling customers. ACTION PLAN Management Time scale responsibility progress Acquisition of the business premises 4 June 2015 manager Registration of the business name and logo 15 June 2015 manager Application of all the necessary license requirements to operate 20 June 2015 manager Enlist and recruit qualified personnel managers for various positions 20 June 2015 manager First meeting and role designation of department managers 30 June 2015 manager Production department Time scale responsibility progress Identification of potential suppliers of raw material 14 July 2015 Production manager acquisition of all necessary equipment 18 July 2015 Production manager recruitment of assisting staff with through the Human Resource department 20 July 2015 Production manager Sourcing of raw materials for first production phase 25 July 2015 Production manager Finance department Time scale responsibility progress Recruitment of all assisting personnel in finance department 1 August 2015 Finance manager Management departmental communication Time scale responsibility progress Introduction of the management to senior management departmental heads 15 August 2015 manager Formal orientation of all employees to the management and organization launch 1 September 2015 manager FINANCIAL PLAN SINGLE YEAR FINANCIAL FORCAST Opening SEPT 10 DEC 10 MAR 10 JUNE 11 SEPT 11 £ £ £ £ £ £ FIXED ASSETS Premises décor 25,000 25000 25000 25000 25000 25000 Production equipment 20,000 20,000 20,000 20,000 20,000 20,000 Furniture 10000 10000 10000 10000 10000 10000 Accumulated Depreciation - 1,000 2,000 3,000 4,000 5,000 55000 54000 53,000 52,000 51,000 50,000 CURRENT ASSETS Bank Deposit 45,000 45000 45000 45000 45000 45000 45,000 45000 45000 45000 45000 45000 CREDITORS DUE WITHIN ONE YEAR Family Loan 4000 4000 4000 4000 4000 Rent 20000 Suppliers - 1000 1000 2000 2000 2000 25000 5000 6000 6000 6000 NET CURRENT ASSETS 45,000 20000 40000 39000 39000 39000 - - - - - - TOTAL NET ASSETS 100,000 74,000 93,000 91000 90,000 89,000 CAPITAL & RESERVES Founder 100,000 100,000 100,000 100,000 100,000 100,000 Retained Earnings - 2000 5000 7000 7000 7000 100,000 98000 95000 93000 93000 93000 A YEAR CASH FLOW FORECAST SEPT 10 - DEC 10 - MAR 10 - JUNE 10 - SEPT 11- -SEPT 10 - DEC 10 - MAR 10 - JUNE 11 - SEPT 11 £ £ £ £ £ RECEIPTS Invoiced Sales 5,000 8,000 12,000 20,000 30,000 5,000 8,000 12,000 20,000 30,000 PAYMENTS Invoiced Costs 1,000 1,000 2,000 5,000 6,000 VAT 500 530 607 750 804 1500 1530 2607 5750 6804 NET CASH FLOW 3500 6470 9393 14250 23192 OPENING BANK 45,000 48,500 54,970 64,363 78,613 CLOSING BANK 48,500 54,970 64,363 78,613 101,805 How to Finance short falls Financial short falls that may occur during the operations of the business either from losses or unforeseen factors are to be financed using the point venture initial bank deposit of £ 45,000. Break even position (Assumed values from the financial forecast) TR = Total revenue (3500) P = Selling price (5) Q = Number of units sold (700) TC = Total costs (1500) F = Fixed costs (1) V = Variable costs (1.8) FC = Total fixed costs (700) VC = Total variable costs (1260) Calculation of break-even= FC/ (P-VC) = 700/ (5-1260) 0.6 Bibliography Baidu Wenku. 2012. Chocolate industry in China. [Online]. Available at: http://wenku.baidu.com/link?url=ADCG9DQ8LVgjNyiHzRAdp22v5pRosHCBgu-hmpVYCt1Iyp9b0ag0Q8L62SmO3T6o-oWsMMdRO-H6QeeD7acYM5LDjBk3PCGZVgtIJ9uqJca. [Accessed 10th March 2015]. Baidu Zhidao. 2008. Chocolate market analysis. [Online]. Available at: http://zhidao.baidu.com/link?url=NsRXLNBe-2oog2XNLDa7jWYaw_1tzRIPsTcCBtLJs9AfEtGJU-GHOZ_gKWVg6uueZFqUTPjwoMJ6JJFEYQP6f. [Accessed 12th March 2015]. Baidu Zhidao. 2013. Dove chocolate in China. [Online]. 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Appendix Chart 1: shows organizational structure Table 1: shows action plan Table 2: shows projected 1 year balance sheet Table 2: shows cash flow projections Read More