Crunchy Biscuits

Crunchy biscuits is a small biscuit manufacturing company which aims to expand its market in different parts of the world. The company has been operational for the past 6 weeks, and is currently in the process of coming up with new strategies, in order create awareness of its products, and also increase its market share.

Financial Plan for the Business

Projected Net Income: the revenue forecasts for the 4 year plan comprise increases of 3% annually, with an exception of this year, since we have already estimated an increase of 2%, and this was based on the supplies that we made in the first 5 weeks of the start of the business (Levinson, & Horowitz, 2010). Within this period, we have been able to get three supermarkets, where we supply our products.

Our cost of sales in one month is 46% of gross revenue, the market cost for advertisements, and promotions constitutes 5%, of the average sales. However, due to the new techniques and strategies which the company seeks to employ, the estimated net income will increase by 60% each and every year. In the first week of operation, the gross revenue collected was $1100, $1500 in the second week, $1470 in the third week, $1770 in the fourth week and $2550 in the fifth week.

Cash Flow Projection: we assume that we will need to increase the capital in order to hire more employees, advertise and promote our goods, in order to improve our sales growth and to create the awareness of our products (Longenecker et al, 2017). In order to finance our company, we will have to get a loan from the bank. In addition, the company’s shareholders can also offer the company loans, thus improving the performance of the company. In the first year of operations, the company will be able to create the awareness of its products, hence increasing its market share. In addition, the cost of loan repayment will not be felt on the first year, hence it is not significant to project the revenue of the company in its first year of operation (Levinson, & Horowitz, 2010).

After acquiring the loans, net income is supposed to increase by 60%, since we will have created the awareness of the product through advertisements and promotions. Moreover, the monthly gross income is supposed to increase 8%, due to the product awareness and the increase in the number of employees in the company (Needle, 2010). This will consequently enable the company’s revenue to be able to increase gradually, due to the huge number of employees, and proper strategies.

Guerrilla Marketing Strategy

Guerrilla marketing strategy is very effective and it will consequently enable the company to be able to reach its goals. In order for this strategy to be effective for the company, the company will determine the appropriate person to market the business daily (Needle, 2010). This person will be supposed to be among the company’s employees. The person should understand the performance of the company, thus understanding the best marketing approaches according to the products which Crunchy biscuit sales (Levinson, & Horowitz, 2010).

The business will then move forward to set its marketing budget, based on its projected net revenue over a period of two years. Budgeting is very important, as it allows the company to understand the amount of money which it will be required to pump into the strategy at the beginning, and how much it will also be able to spend as time goes by. Budgeting for marketing strategies is very important, as it allows the business to be able to gain huge profits, rather than gaining less profits (Longenecker et al, 2017).

Thirdly, the company should choose the best marketing tool, which will be used in order to boost the strategy (Knowles & Castillo, 2011). A research should be conducted prior to choosing the tools, as this would allow the company to be able to understand the best ways of reaching the customers. Viral marketing and ambient forms of marketing will be very essential for the business, since it is still new in the market. Viral market will not only create the awareness of the product, but it will also allow the company to market its products using other traditional forms of advertisements but in electronic form (Needle, 2010).

Crunchy biscuits should then record its spending and results on a marketing calendar. The chart should not be very complex, but it should be a simple record by week, month and year of the marketing efforts gained by the company (Levinson, & Horowitz, 2010). These results increase gradually, and the company should be able to track its performance, hence understanding the strengths and weaknesses of the strategy (Longenecker et al, 2017).

The company should then invest in the strategy, in order to boost its performance hence being successful. Most companies do not end up making it due to the lack of a follow up which makes the strategy less successful (Knowles & Castillo, 2011). The marketer should be provided with the necessary resources, thus allowing the person to effectively use the strategy effectively.

The company should then foster the execution of the strategy, since poor execution may not lead to success. Most companies tend to suffer, due to having proper plans and strategies, but the execution of the plans becomes a problem hence leading to failure. Crunch biscuits should foster the executions of its strategies, in order to increase its market share (Needle, 2010).

In order to understand the plan’s effectiveness, the company will track the effectiveness of its plans. This will enable the company to answer questions such as, what seems to be working over a certain period of months, what is most effective, How much is the company spending for every sale (Levinson, & Horowitz, 2010). In so doing, the company will understand it’s the weaknesses and strengths of its plans. Tracking where the customers are coming from is significant, as it allows the business to understand how it can boost the sale of its products (Longenecker et al, 2017).

Finally, after every three months, the company should assess its plans, whereby the plans which are not working should be refined while those which are working should be improved. This will consequently enable the company to be able to reach a wider market, due to the effectiveness of its strategies.

The most appropriate location for the new shop is in Manhattan, New York. This is consequently because New York is a good place for start-ups (Knowles & Castillo, 2011). In the past years most companies did set up their businesses in Silicon Valley, this has however changed, due to the performance of New York. New York has always been a merchant city, where people from all over the world moved and settled. Moreover, the city provides employment opportunities to most people due to the availability of companies in the city. This has consequently forced most people to move from other states into New York, in order to secure new jobs (Needle, 2010).

The population of New York City grows gradually, creating market for different products in the city. This is the reason as to why most start-ups tend to invest in New York City, since it is a promising market with people from all walks (Levinson, & Horowitz, 2010). The city has a ready market for different products, due to the huge number of immigrants which it receives each and every year (Longenecker et al, 2017). This allows most companies to be able to perform better while in New York City as compared to those in other cities in the US. In as much as the cost of living is very high in New York, setting up a business in such an area means attracting more customers, hence increasing the company’s revenue.

Setting up a biscuit store in New York will be very advantageous, since the store will be able to easily supply biscuits in different towns in the state of New York (Knowles & Castillo, 2011). This will therefore save the shipping costs, since the company will not have to spend a lot of finances on the transportation of its products in New York. Furthermore, due to the huge number of small businesses in New York, the company can be able to easily partner with other small businesses in the city, hence increasing its performance (Longenecker et al, 2017). For instance, since New York City has a lot of small online businesses, it makes it easy for the company to be able to partner with such companies, hence making it easy for it to be able to gain huge profits due to partnering with other companies.

Plan for Securing Sources of Debt Financing

Establishing a debt financing is very significant when starting a small business. Bank debt is usually the main source of finance to any company (Needle, 2010). Taking a short term loan is therefore necessary for the company, in order to maintain and keep its inventory. A long-term debt which will be paid within a period of five years will therefore be made. In order to acquire a bank loan, the bank will require some security, this consequently means that one of the shareholders in the company will have to offer his or her property as security for the loan (Levinson, & Horowitz, 2010).

Secondly, a shareholder may also give the company a loan, whereby his or her shares will increase based on the percentage of loan given to the company. This will be a second source of debt financing, whereby the company’s shareholders will discuss the terms of giving the loan to the company. Under these terms, the company will be able to come up with proper ways of paying the debts (Knowles & Castillo, 2011).

Finally, the company should plan how it is going to undertake its expenditure, thus being able to operate effectively (Longenecker et al, 2017). All the finances should be allocated tasks whereby, they can either be used for advertisement, supplying and transportation and for production (Maeda, 2011). This will ensure the company performs better, hence being able to meet its goals. After operating under a very strategic plan, the company will be able to gain profits, whereby it can be able to easily pay the loans acquired from either the bank or from the shareholders. The company should then acquire a different form of investment, after becoming stable, in order to allow it to be able to easily pay the bank loan and the interest without having to drain its finances (Levinson, & Horowitz, 2010).

Reference

Levinson, J. C., & Horowitz, S. (2010). Guerrilla marketing goes green: Winning strategies to improve your profits and your planet. Hoboken, NJ: Wiley.

Knowles, R. A., & Castillo, C. (2011). Small business: An entrepreneur's plan. Toronto: Nelson Education.

Longenecker, J. G., Petty, J. W., Palich, L. E., & Hoy, F. (2017). Small business management: Launching & growing entrepreneurial ventures.

Needle, D. (2010). Business in context: An introduction to business and its environment. Andover: South-Western Cengage Learning.

Maeda, M. (2011). The encyclopedia of small business forms and agreements: A complete kit of ready-to-use business checklists, worksheets, forms, contracts, and human resource documents with companion CD-ROM. Ocala, Fla: Atlantic Pub. Group.