Analysis of Premiere Electric and Airex - Example

Business Plans Name Class Unit Executive summary The report gives analysis of two business plans which are Premiere Electric and Airex. Premiere eclectic deals with electrical contracting while Airex deals with waste management. The report has given brief information about each company describing their formation and other characteristics. The strength demonstrated by Premiere electric lies on well defined mission, financial planning and listing of the services. The strong points on Airex are management and organisation, marketing plan and marketing strategy. Weakness on Premiere Electric report are on marketing plan, competitor analysis and poor staffing while in Airex, the weak point lies on competitor analysis, unrealistic financial plan and lack of salary figures. According to the views on this report, both business plans should give more information on assumptions made and risk management. The report have also listed challenges faced in coming up with it as financial analysis and terminologies. Lessons learnt about business planning are; need for a business plan before starting a business, need to analyze business plan, importance of good competitor analysis, need to have good market analysis and need to look at all assumptions. In coming up with the report, I have shown competency in critical analysis and creativity. Outline Brief description Premiere Electric- An electrical contracting company. Airex-Waste Management Company. The three strongest components of each plan and justification Premiere Electric well defined mission financial planning listing of the services Airex Management and organisation. Marketing plan. Marketing strategy. Identification of the three weakest components of each plan and their justification Premiere Electric Marketing plan. competitor analysis Poor staffing Airex Competitor analysis. Unrealistic financial plan. Lack of salary figures. Suggestions on how the business plans could have been improved. List of challenges faced and how they were overcome. A statement of lessons learnt about business planning. The competencies that were demonstrated and to what extent. Contents Executive summary 2 Outline 3 Contents 5 Introduction 6 Brief overview 7 Electrical contractor business plan (Premiere Electric) 7 Airex 8 Strong points 9 Premiere Electric 9 Well defined mission 9 Financial planning 9 Well listed services 9 Airex 10 Management and organisation 10 Marketing plan 10 Good marketing strategy 10 Weak points 11 Premiere Electric 11 Marketing strategy 11 Competitors’ analysis 12 Poor staffing 12 Airex 12 Competitors’ analysis 12 Unrealistic financial plan 12 Lack of salary figures in the financial plan 13 Suggestions on how the business plans could have been improved. 13 Challenges faced and how I overcame them 14 Five lessons learnt about business plans 14 Competencies I have demonstrated 15 Conclusion 15 References 17 Introduction Business plan involves turning a business idea into a reality. In any business, a business plan is a necessary tool. It is through a business plan that an entrepreneur knows how much they need, what to borrow and the wage to pay. Coming up with the right business plan involves taking time and doing appropriate research (Capezio, 2000). This report have analysed two business plans obtained from http://www.bplans.com and http://www.businessplans.org. The businesses selected from these websites are Premiere Electric consulting and Airex. Premiere electric deals with electrical consulting while Airex deals with waste management. The report have looked at the business plans weakness and strengths. There are also recommendations on how to improve the business plans. As the report was written, challenges faced by the writer have also been outlined. The competency demonstrated by the writer has been written down together with the lessons learnt. Brief overview Electrical contractor business plan (Premiere Electric) Premiere Electric is an electrical contracting firm that is owned by Robin Sullivan. She is an experienced electrical contractor being the first female holding a Richmond City Master Electrician license. She has a vast job experience having worked in many projects in the tri county area. She has been able to gain customer acceptance due to her skills. Her main ability lies on electrical installations, communication and maintenance. Premiere Electrical have been established with an aim of serving her former customers and also expand her services to new clients in Tri-county area. The business worth from her former customers is estimated to be at $100,000 which she believes she will be able to gain a large share. She will start her business alone before hiring new employees (Premiere Electric, 2014). The business mission is to offer customers high quality services. This is through offering of personalised services and giving convenient and fast services. The company will utilise the owner savings for start up. Total assets the company will require amount to $51,700 leading to total funding of $62,000 for the business. The business will offer services which range from consulting, designing, field services and construction services. The economic growth has made her services more marketable. There is an increase in new opportunities which ranges from installations of electrical security systems, communication systems and data transfer. Premiere Electric has been established with an aim of being able to offer these services and capture the largest market share (Premiere Electric, 2014). Airex Airex is a waste management company that is meant to offer the best solution to the consumer waste problems. The opportunity lies on the fact that most of the consumers do not have proper waste management systems in place. The business is in partnership with five management partners who have experience in engineering and business administration. Other areas of expertise are IT, energy and cost accounting, process engineering, production banking and telecommunications. The company management is by two directors who are on full time basis for two years. The other three directors are expected to support the company operations on a part-time basis. The arrangements are due to financial constraints. The management will become actively involved as the business gains more revenue (Airex, 2014). The business will ensure that their clients are able to enjoy total solution by making sure they manage their residual waste from start to end. The company needs a capital investment of US$300,000 which will be invested by the founders. The company have a goal to attain 10 clients by the end of the first year in operation. The company have projected that their clients will increase from in ranges of 20, 30 45 and 80 starting from the second year. The revenues at the second year of the company operation are expected to reflect an 11% increase. The company have conducted several interviews with multinational companies which have shown prospects of the business. The business growth depends on the managers’ background and knowledge. The company values are also fundamental in their business operations (Airex, 2014). Strong points Premiere Electric Well defined mission Premiere electric have a well defined mission. The mission gives what the company intends to do and how to achieve it. Having a good mission is vital as it gives the business a clear vision. The company intends to offer highest quality electrical services to the clients. The mission is dependent on the owners’ expertise and strong vendor relationship (Premiere Electric, 2014). Financial planning The company financial planning is excellent. The company outlines all the required revenue which will be sourced from the owner’s savings. The financial breakdown is well planned outlining all the requirements and the available capital. The company have a total funding of $62,000 while the funding of $ 51,700. The financial plan shows that the initial start up for the company will be easily covered by the funding by the owner (Premiere Electric, 2014). Well listed services The business pan has listed all the services it will be offering in a clear way. By listing the services offered clearly, it makes it easy for a reader to understand what the business is all about. The business describes each of the service components separately making it easy to understand. The company services listed are consulting, design, and field and construction services (Premiere Electric, 2014). Airex Management and organisation The business plan has given a good management and organisation breakdown. The plan gives competencies of the five partners and how they will help the business with their expertise. The analysis of the partners serves as a major insight into the company competence. The names of the directors are also listed with their tasks. There is also mention of the allocated time for each director with explanation being given for the different operation modes. The listing of the tasks for each director have been outlined which have been done through their merits (Airex, 2014). Marketing plan The business plan has a well outlined marketing plan. The marketing plan looks at all the players in the industry and outlines their residual collection annually. The marketing plan also looks at the available residue and classifies it into groups. Having the data on the competitors and the available residual helps a lot in establishing where the business venture will rely to make profits. The marketing plan also looks at the opportunities and the relevant targets. All the factors that will reinforce the business growth have been listed. This shows that the business plan have looked at all the factors that will enable the business to market itself easily (Airex, 2014). Good marketing strategy The company have given a comprehensive marketing strategy. The company have based their market offer on total solution. This is an offer which deals with the waste from collection to the final disposal point. The company have outlined that convenience and quality services will be the main strengths in the company. The company have also based their marketing on ethics; this means that they will work to gain the consumers trust. ISO standard is another strategy put forward; the company will work to be compliance within the shortest time possible. Other strategies that will be use to attract clients are sales, pricing strategy and profitability, waste management and technical consultation. The profits expected from the strategies have also been written down. The plan also gives the means in which the business will use in marketing. This involves advertising, public relations and promotions. The marketing strategies are thus clear and elaborate (Airex, 2014). Weak points Premiere Electric Marketing strategy The company relies on the old Miller and Gardener clients in order to build the firm. This makes the business to have unpredictable customer base. It cannot be verified beyond doubt that the entire old customer base will shift to her business. She also has high hopes in marketing to women since she is the only woman in the male dominated profession. Though the marketing tactic may work, she needs to look for other marketing strategies that will enable her increase the market share. Her market share using the strategy is limited and unpredictable (Premiere Electric, 2014). Competitors’ analysis The business still relies on the strong relationship with customers from former employers. This is not enough to give the business a competitive edge. She also plans to capture new customers who are in small projects and whom the competitors are not serving. Commercial electric contracting is more competitive and hence there is need to look for more distinct competitive advantages. The competitive advantage in which the firm is relying on may not be able to help it outdo the competitors (Premiere Electric, 2014). Poor staffing Premiere eclectic does not have staff apart from the owner. This implies that she will be the person responsible for running the business through offering services and maintaining the management aspects. The electrical contracting service is a demanding job and may lead to the owner being overwhelmed in case the contracts increase (Premiere Electric, 2014). Airex Competitors’ analysis The business plan downplays other competitors in the industry. The competitor analysis does not capture the main competitive advantage of other firms in the industry. It’s evident there are other firms dealing with waste management hence they cannot be overlooked. The market plan has thus overlooked the competitors in the industry (Airex, 2014). Unrealistic financial plan The business financial plan is unrealistic. Despite starting with a negative net income of -$40,313, the company net income rises to 219,016 in a period of one year where the increase in clients is only 10. The revenue projections seem in some cases exaggerated. The growth in revenue should be gradual since the growth in clients is also slow. Return on investment also increases from -15.5% to 51% in a period of one year. These projections are thus inaccurate and need to be revisited (Airex, 2014). Lack of salary figures in the financial plan Despite the business plan outlining the directors and their roles, there are no salary figures. There are no other employees’ salaries as well in the financial plan. The salary to be paid to the employees should appear in the business plan so that all the expenditure is calculated in financial plan (Airex, 2014). Suggestions on how the business plans could have been improved. Both the business plans have failed in identifying core assumptions. This involves the number of the customers that are expected during the start up or the consumer preferences. The business plans should identify and test the assumptions that they use. By addressing the assumptions, the business plan is able to look at the reasons which might lead to failure. There is also need to look more on the risk mitigation plans that are available. This is a section that looks at the possible risks and the strategies that will be used in overcoming them. Risks that have been overlooked in the reports include currency devaluation and regulatory risks. The business plans should have looked into those two aspects (Shane, 2000). Challenges faced and how I overcame them When coming up with the report, I faced challenges such as analysing the financial plans and understanding some of the vocabularies. To analyse the financial plans appropriately, I had to recalculate and relate the figures to real life examples. This was meant to justify whether they were realistic. I had to make sure that I follow the given guideline to come up with the right structure. Research had to be done on all the unfamiliar terms so that it was possible to gain clear meaning in the reports. Five lessons learnt about business plans I have learnt several lessons about business planning as I wrote this report. The lessons are; Need to have a business plan As I wrote the report, I realised that there is need to have a business plan before engaging in a venture. I realised that business plan gives all the required knowledge about a business before one ventures into it. Making sure that the business plan is well analysed After writing a business plan, there is need to recheck it and make sure it have analysed all the areas of the business. A business plan should look at all aspects of business. Need to have a good competitor analysis I have realised that if the business plan is to be successful, there is need to address all the competitors. Poor competitor analysis may lead to the business underestimating other players in the industry. Competitor analysis makes it possible for the business to determine their competitive advantage. A business plan should have a comprehensive market analysis Market analysis is another aspect of business plan that I have learnt need to be comprehensive. Poor market analysis may lead to the business failure. A business plan should analyse the market appropriately. Need to identify all the assumptions made in a venture Another lesson learnt is identification of assumptions made in a business plan. A business plan should identify the assumptions made and test them. Competencies I have demonstrated In coming up with this report, I have demonstrated competency in analysis. I have analysed the reports critically looking at all aspects. Through critical analysis, I have been able to identify the report weakness and strengths. I have also utilised creative thinking in coming up with suggestions on how the reports can be improved. Conclusion When writing business plan, the writer is supposed to organise thoughts into a business venture. Business plan helps the entrepreneur in determining how to do the business. The analysis of the two business plans has identifying the weakness and strengths in each plan. Premiere electric have a well defined mission, financial planning and listing of the services. The strong points on Airex are management and organisation, marketing plan and marketing strategy. Weakness of premiere electric report are on marketing plan, competitor analysis and lack of staff while for Airex, the weak point lies on competitor analysis, unrealistic financial plan and lack of salary figures. There is need to include more on assumptions made and risk analysis in both plans. In coming up with report, challenges faced were analysing the financial plans, vocabularies and structure which were overcome. There are also several lessons which I learnt in coming up with the report. As I wrote the report, I believe is have expressed competency in analysis and creative thinking. References Airex. (2014). ‘Airex’. Retrieved (25August 2014), from ‘Center for Business Planning’, http://www.businessplans.org/Airex/Airex00.html. Capezio, P. (2000). Powerful planning skills: Envisioning the future and making it happen. Franklin Lakes, N.J: Career Press. Premiere Electric. (2014). ‘Premiere Electric’. Retrieved (25 August 2014) from ‘Bplans’, http://www.bplans.com/electrical_contractor_business_plan/executive_summary_fc.php. Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science.11(4): 448-469. Read More