Example Business Plan - Manufactured Product

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2. Employability and Entrepreneurship B - Team Voyager Ohio LLPContents PageContents Page. 1Executive Summary... 2Mission Statement.. 3Product Overview... 3Objectives... 3Legal Structure....... 3Target Market. 3Competition, Clients and Product Positioning... 4Marketing and Public Relations. 4Operations... 5Intellectual Property5Financial Information..6 Break Even Analysis..6 Comprehensive Income. 6 Financial Position.. 6 Cash Flow and Funding Requirements.. 6References...7Bibliography....... 8Appendix........ 9 Confidentiality Agreement.... 10 Partnership Agreement.. 13 CVs... 18 Market Research Questionnaire.....26 Market Research Results.... 28 Product Schematics....29 Financial Statements.. 32 Financial Graphs... 432 3. Employability and Entrepreneurship B - Team VoyagerOhio LLPExecutive SummaryOhio LLP has designed and developed portable food and beverage containers able to reheattheir contents utilising microwave technology. The aim of this business plan is to set out a partnershipagreement between Ohio LLP and Sanyo Electric Co Ltd to manufacture and distribute thesereheating container units.Ohios management currently consists of four Hertfordshire undergraduates currently in theirsophomore year (second). Three of these undergraduates are currently specialising in accounting andfinance and the fourth is specialising in human resource management. The University of Hertfordshirewas also recently awarded the entrepreneurial university of the year award by Times HigherEducation. This back drop will provide a sound basis for a business start up such as Ohio LLP. A partnership agreement between Sanyo and Ohio will see Sanyo manufacture Ohios twokey products. These two products consist of a food container and a drinks flask, both of which areable to reheat their contents at a push of a button. This reheating process utilises the microwavetechnology used in traditional microwaves, but placed in portable containers and flasks. We intend to acquire approximately 79 units of each product from Sanyo in the financial yearending March 2012. This will be set to increase to over 5000 units of each product in the financialyear ending March 2017. Although initial product procurement will be relatively low, these numbersare expected to grow exponentially over the short to medium term. It is hoped that an agreement overthis time frame will lead to a long term partnership that will see both Ohio and Sanyo maintain longterm mutual growth in the UK market.Sales will initially be developed through online commerce sites such as Amazon. In thelong term, it is our intention to extend these sales into physical environments such as local shops andsupermarkets. There is also the long term possibility of selling our products on television auctionchannels such as Bid TV. Based on this sales strategy, initial product marketing will focus on onlinemedia such as Google Adsense and effective product placement on sites such as Amazon. This partnership agreement will initially see Sanyo provide Ohio with its product inventorywhich will be stored in Ohios storage facility for later sale to the UK market at a RRP of 39.99. Inthe financial year ending March 2015, we wish to develop this partnership so that our products aredistributed directly to Ohios customers from Sanyos production line. This would be over the initialsystem where inventory would be sitting in storage for extended periods of time. This new systemwill see reduced inventory days and a faster cash conversion cycle for both, Ohio and Sanyo. Sanyo currently manufactures similar products to those we are proposing, namely traditionalmicrowaves and other electrical components. It is estimated that our products will be at a similar costto produce as these other Sanyo products. A Sanyo microwave currently costs 19.49. (Compare StorePrices, 2011) Using this figure as a basis; this partnership could potentially be worth over 200,000annually to Sanyo by April 2017 with this figure expected to grow continually long after this date.Based upon the experiences of companies such as H.J. Heinz Company in introducing thesetypes of products in the US market, products such as ours are proven to work as well as be profitable.Using Heinzs Beanzawave (a similar product to our own) as an example, this product generatedover 22million in revenue for Heinz between 2007 and 2009. (Daily Mail, 2009) HeinzsBeanzawave, although similar to our products, is also slightly different in the respect that it needs tobe plugged into a power source in order to operate. This is compared to our products which are selfsustaining and therefore, are not required to be plugged in order to operate. This gives our products acompetitive advantage over products such as Heinzs Beanzawave, helping to ensure our productslong term viability.3 4. Employability and Entrepreneurship B - Team VoyagerOhio LLP Mission Statement We utilise technological innovation to make peoples lives better. Product Overview In the short term, it is Ohios intention to focus on two key products. These products willconsist of a food container and of a liquid flask. Both of these products will incorporate technologythat will allow them to reheat their contents at a push of a button. Our products will incorporate the heating technology utilised in microwaves as their mainmethod of operation. Our products will also incorporate the thermal insulation technology oftraditional thermal flasks as well as the water proof rechargeable battery technology utilised in electrictoothbrushes. Due to this utilisation of technology, our products are both portable and have the abilityto reheat their inner contents, therefore providing our products with a distinct USP within the UKmarket. Our products will have a similar cost to produce as traditional microwaves. As a result, wewill be able to purchase our products from Sanyo Electric Co Ltd at an approximate cost of 19.49.Ohio will then sell these units at a RRP of 39.99 per unit. Objectives To generate in excess of 1000 in revenue per month by April 2012. Be in a position to start paying director remuneration from April 2012 onwards. To generate a net profit in our second year of trading. Carry out research and development into ways of reducing costs, allowing us to provide morecompetitive prices. To work closely with our suppliers to ensure a strong business relationship based upon qualityand timely service. Begin to distribute products direct from the Sanyo production line to customers within 4years.Legal Structure Initially, Ohio will be set up as a Limited Liability Partnership. As a result, Ohio will be aseparate legal entity of its members. This will allow for the operations within Ohio to be more clearlydefined and structured. This formal structure will result in more effective and efficient management ofthe firm and will provide a basis for securing the continued operations of Ohio. This will help createcertainty for Ohio and its related stakeholders. The partnership will be governed in accordance withthe partnership agreement which sets out the rights and responsibilities of Ohio and its designatedmembers. (Companies House, 2011) A copy of this partnership agreement is shown in the appendix.The designated members of Ohio LLP are listed below with their associated roles within the firm: CEO and Strategic Officer Name A Chief Financial and Risk Officer Name B Chief Commercial and Operations Officer Name C Chief Legal Officer and Director of Communications Name D Target Market Initially, our products will be aimed at two key markets. These markets will include people infull time employment and families that regularly go on day outings.According to the Office for National Statistics, in 2010, the total number of people in full-time employment in the UK was 21.24million. (ONS, 2011a) It can be viewed that the majority ofthese workers take time out from work to have a break or have lunch. It is during this time that ourproducts are likely to be utilised. The ONS has also found that in 2009, domestic holiday tourism4 5. Employability and Entrepreneurship B - Team VoyagerOhio LLPgrew by 12% to 84million total holiday breaks. (ONS, 2011b) This information shows that there is astrong potential market for both our food container and our reheating flask products.It is our intention to initially focus on selling our products through online commerce sitessuch as Amazon. This gives Ohio the opportunity to prove the viability and demand for its products.Forecasts have been carried on the assumption of this being the main form of operation for theforeseeable future. This is to ensure Ohios future operations do not rely on large bulk orders beingmade that are not guaranteed to happen and are unlikely to occur in the near future. Competition, Clients and Product Positioning As shown in the price comparison below, in terms of price, our product will not be able tocompete with tradition food containers and flasks. In relation to these competitor products, ourproducts will compete in relation to the services they provide the user. In this case, our productsreheat their contents rather than simply retain heat which is currently the technique utilised by thesetraditional products. In this case, our products will compete on the qua