business plan assignment A level

FINANCING PROPOSAL FOR B.BROTHERS COMPANY COMPANY

Business Plan To be submitted to

The Royal Bank of Scotland

Brock Johnson Ben Johnson B. Brothers Company 17 Queens Road Bournemouth BH2 6BA Plan prepared March, 2010

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Table of Contents

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1.0 Executive Executive Summary ------------------------------------------------------------------------------------------------ 1 2.0 Company Summary ----------------------------------------------------------------------------------------------- 2 2.1 Vision ------------------------------------------------------------------------------------------------------------------- 2 2.3 Mission ---------------------------------------------------------------------------------------------------------------- 2 3.0 Products Products & Services ------------------------------------------------------------------------------------------------ 3 4.0 Market Segmentation & Competitors Competitors ----------------------------------------------------- 4 5.0 Sales & Marketing Marketing Strategy ------------------------------------------------------------------------------ 5 6.0 Management Management Summary ---------------------------------------------------------------------------------------- 7 6.1 Personnel Personnel ----------------------------------------------------------------------------------------------------------- 7 7.0 Financial Planning ---------------------------------------------------- 8 7.1 Summary of Financial Needs ------------------------------- 8 7.2 Cash Flow Projection -------------------------------------------------------------------------------- 8 7.3 Profit & Loss Projection ------------------------------------- 8 8.0 Risks & Conclusions Conclusions --------------------------------------------------------------------------------------------- 9 Appendix I ------------------------------------------------------------------------------------------------------------------------------ 10 Appendix II --------------------------------------------------------------------------------------------------------------------------11 -----11 Appendix III -------------------------------------------------------------------------------------------------------------------------12 ----12







and operated by two owners, Brock and Ben Johnson, located at 17 Queens Road, Dorset, and Bournemouth with 10,000 square foot warehousing space. In the last five years the company has developed the strong brand and strong market position in different segments. Due to its quality and innovative cleaning products the company has developed the close working relationship with the distributors, retailers and consumers. And it's newly launched product the oven-bomb is beating any other product in the market today. The company currently serves 30% of the total market with gross revenues of £2,650,000 in Bournemouth. We are expecting to grow our customer base and market by 50% based on the previous years records, our unique offering, and planned marketing activities. The company is seeking growth capital in the amount of £5,000,000 over the next three years for the purpose to relocate its factory in order to cut costs purchase new equipment expand its business all over the UK so that our business can operate at a higher level of profitability train the employees on the new equipment increase the marketing activities to modernize and renovate the machines & to invent and launch the new product • • •

• • • •

Based on the financial projections presented in this plan, it indicates that with the investment of £5million, the company will maintain good cash flow, increase profitability and provide a timely and healthy repayment of loan with interest. Projection shows the turnover of £2 million per annum with high sales growth and net profit of £1.5 million year over the next three years. As owners, our commitment is to take personal responsibility for all financial debt. So we have taken necessary precautions and steps to ensure that the investment is fully implemented. Repayment of 3-year loan, plus interest, can begin promptly in July. Early retirement of loan is anticipated, anticipated , possibly by the end of tax year 2013. The company aims to become one of the top manufacturing company in UK. And we can do it. It is not our ego; it is our self confidence to be in the top.

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cleaning the schools, big offices and pubs and make money out of it. At that time, there were lots of manufacturer of cleaning products but they had mind blowing ideas to build exciting cleaning products. It is their concepts and hard work how this company is in this position now. It employs 90 people on a single site at Queens road in Bournemouth, which accommodates both administrative and manufacturing functions. It has earned a reputation within these three years for making innovative line of biodegradable, environmentally safe cleaning products, which are sold in supermarkets household stores and DIY/hardware outlets. Its turnover is £2M per annum and the company has some extremely successful products which are household names. The company is ranked as the top manufacturing company for its creative cleaning products in Bournemouth by industry regulator, Ross Stone. Aside from manufacturing, the company also offer residential house cleaning, school cleaning and pubs cleaning services. Roger Harrington has been appointed as the managing director who is responsible for operations and management of cleaning services. 2.1 V ision ision Its new revolutionary product 'Oven Bomb' makes B. Brothers one of the most comprehensive manufacturing company in Bournemouth. Our expertise lies in high quality manufacturing research, service, technology, quality and efficiency in all our areas of activity. This forms the basis for our success and safeguards the future. However, our focus is firmly on optimising the available funding and delivering the best product and cleaning services.

2.2

Mission

B. Brothers company is dedicated first and foremost to the production of highest quality and exciting products to meet the needs and demands of our customers while achieving an acceptable return on investment. The launch new product is an innovative self-cleaning oven cleaner and our lead market all over the UK, following the successful testing and launch of product in Bournemouth. The immediate goals are to gain funding, to expand the business all over the UK, relocate the factory, provide an excellent product at good value for money for customers within budget and deliver the outstanding outstanding cleaning services. -2-

3.0

Products

&

Services

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B. Brothers produce wide range of environmentally friendly safe to use cleaning products. All products are designed to be effective at cleaning, yet easy and strong but harmless. The cleaning products







• • • • • • • •

Industrial cleaners Degreasers Automotive cleaners Oven cleaners Concrete cleaners Tar Tar remover remove r Vehicle wash products Hand cleaners

B. Brothers products will be used by house wives, hospitals, hotels, car washes, schools and cleaning specialist. Next to the cleaning products, the newly launched revolutionary product is the oven bomb which is self oven-cleaning product with a difference. The oven bomb is a time saving small sized product which can fit into any conventional oven. This product can be used for both domestic and commercial uses. It is safe and very easy to use. This is an exceptional product superior to any other oven cleaning product in the market today. A number of B. Brothers products will be available from supermarkets and household stores. Also the products can be purchased from the company's secure website: www.brothersinvention.com

The B. Brothers company also offers professional cleaning services in Bournemouth which also support in advertising the product of the company. It provides the cleaning services to residential houses, pubs and schools. The company offer wide range of services to the clients from general room cleaning to bathroom, kitchen, bedroom as well as others usual jobs.

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4.0

Market Segmentation & Competitors

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The company will be focusing on wholesale distributors, cleaning specialists and also the consumers who want to buy it online from company website. The wholesale distributors play the important role for company to achieve its goal and success because they are







business we plan to switch to retail consumers more than wholesalers. The wholesale demand is constant and increasing. We feel that the latter can be improved by more direct selling efforts. Retail business should grow over the next few years, but the greatest growth will be in wholesale accounts.

Market segmentation for B.Brothers products 10% 10%

20% 20%

Wholesale Distributors Cleaning specialist Online consumers

70% 70%

Also with the revolutionary new product the oven bomb will be targeted at: Housewives, commercial market such as restaurant and hotels and the smaller segment would be cleaning professionals. Although there are lots of competitors who are also manufacturing the cleaning products but we believe we are only the company who delivers the high quality and innovative product to the consumers at good value. And the oven bomb is one of the exceptionally invented self oven cleaning machine for which the company is really proud of. -4Page 6

Market segementation for new product:oven bomb 10% 10%

20% 20%

Housewives Cleaning specialist Hotels and restaurants Others









Also B. Brothers cleaning business, they offer both residential as well as commercial cleaning service. The company service will be focusing on residential homes, school and pubs. There are many competitors in the local market. Although each of them provide a good cleaning service but we feel they provide to fail the level of professionalism, trustworthiness , attention to detail and use of quality cleaning products.

5.0

Sales

&

Marketing Strategy

The B. Brothers products are very popular among the market nowadays with its logo and its slogan “Cleaning matters: Nothing advanced than B. Brothers Brothers product”. The company will use a different marketing and sales strategies on three different market segments that it seeks to reach. The company will have different marketing and sales approaches which is detailed below:

For individual and online consumers: Marketing for these segments will be done generally over the internet. The company will give more focus on building the good quality website promoting the website through different popular search engines like Google and yahoo. But unless our website is optimised to get a listing at the top of search results, there’s a chance the consumers will buy from competitors instead. So the company will be using pay-per-click advertising. It is an effective marketing scheme for the internet. Pay per click assures that we are reaching our target market. People who are searching for

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some specific information on the subject will only come to our website. Also the company will produce adds on the popular magazines like Housekeeping, C& M: Cleaning and Maintenance







of the distributor, that production can be scaled quickly if necessary,

For cleaning specialist: Our cleaning service company will market our products to specialist firms. The advertising channel like magazines, newspaper, yellow pages, flyers, posters, bus boards, radio broadcasting will be used to create market awareness. As a pricing strategy we will offer them the whole sale prices for the first five months of operation. Although it is not on the top of our plan, but we will be using BOGOF pricing strategy to get rid of old stock. And for the promotion of newly launch oven bomb we will have stand in front of the superstores giving samples as testers with a video demonstration showing how the product work. To get free publicity and media attention, samples would be given to journalist to test the product and write review based on the product performance. We also have contacted “Kim and Aggie” from how clean is your house from channel4. They have agreed to endorse the product via internet, blogs, twitter, cleaning tips websites and also new series of “how clean is your house”. For pricing strategies we will be using market penetration and price skimming strategies as above.

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jointly. Both men are inventive and energetic. They believe their energies complement each other and will help them make B. Brothers company a great success to the top of the Mount Everest.

6.1

Personnel

Management believes that the strength of the Company's personnel is a key to success. As such, plans include filing staff positions with professionals who have proven success and records in manufacturing world and have an understanding of the industry. The company plans to hire one office manager with salary of £22,00 per year, two production and administrative assistants with salary of £15,000 per year and all the other production staff ; 8 hours employees at a minimum wage rate. The table shows the salary for the whole company. (See Appendix I)

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7.0

Financial Summary

7.1

Summary of Financial Needs

B. Brothers Company, a limited partnership of two brothers, is







allowed for interest on the full amount for the whole period. We expect to grow sufficient cash flows over the next three years with healthy repayment of loan with interest. This loan will be repaid quarterly over three years. Our cash flow forecasting for the three years is shown in the table: (See Appendix II.)

7.3

Profit

& Loss

Forecasting

B. Brothers expect a significant increase in profitability to the next three years and in the future also based on our experiences and market research. We anticipate that sales will grow quickly within 4 month of operation. But certain expenses are assumed like marketing, advertising, training & development, salaries and wages to bring our products to prominence. We assume in increasing 20 distributor clients within a first year and so on, which give us an estimated turnover of £2 million every year. We expect to see very strong net profit every year. We anticipate our annual gross profit will be £1.5 million over the next three years and expected more profit in future. Our projected profit and loss for the three years is shown in the table: (See Appendix III) -8-

8.0

Risks

&

Page 10

Conclusions

We have taken into consideration that equipment from the previous location could present a risk of costly repair and replacement fees. So, we have an insurance of £24,000 per year to reduce this risk. Also if in case we have the latest equipment on







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A ppendix I Employer & employee

Salaries

Brock Johnson (owner)

£32,000.00 per year

Yearly increase depending upon profitability









Part Time workers(15)

@6 per hour

More added as production increases.

Full time workers(20)

@7 per hour

40 hours a week

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A ppendix II

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business plan assignment A level

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