There are a lot of customers who want to install films by themselves without special expensive tools, so our lessons could help them.
The project will be funded by the owner of “Shadow” firm from own resources of 150 000 pounds, so we think we will not need any additional sources of sponsorship.
2.3. Primary Points
It is necessary to put a lot of endeavours to research market, plan economical and financial activities and predict profit and sales. Also must be formulated primary points and the system to implement it.
It is important to go up to projected points according to plans. Sometimes it is necessary to correct it because of variable market – let circumstances. Employees have to know their duties, rights and range of responsibility. It is important to ensure that correct information would circulate in firm permanently helping to administrate and improve work. Employees have to understand that owner is grateful for theirs accomplishments and try to appreciate it properly. However if employees irresponsibly do their duties or depart from requests, director has the right to criticize and punish them.
Our firm has set following points for the near future:
- To make a lodgement in the bigger part of market.
- To reach at least 90 percent of power circulation per this annum.
- To make steady workplace and subsistence level for employees.
- To contact long-lasting reliable relations with future providers.
- To interest more customers.
Further points if the firm:
- To outrival competitors using better quality of attendance and lower prices.
- To reduce outlays as much as possible.
- To increase the quality of services.
- To reach maximum profit from which we could store capital for business development.
3. Marketing Plan
3.1. Environment Analysis
3.1.1. SWOT Analysis
Strengths, Weaknesses, Opportunities, Threats (SWOT) Analysis and product markets setting must be done at the same time. It is impossible to select exact product markets without considering skills which can impact the activity of the firm.
It is not an easy task to set strengths. However the firm has to do it by itself, using internal information sources. Opportunities and threats are outside the firm, so we usually need consultants for assessing it. Threats may have different forms. Opportunities can come up in many ranges of activities, so sometimes it is hard to notice it.
3.1.2. PESTLE Analysis
Since threats and opportunities are outside the firm, we can call it external factors. The firm is affected by lot of various forces. The environment is changing constantly, so it is important to assess not only tendencies and variation, but also upcoming predicts of changes. The environment must be analysed constantly and this analysis has to be continuous and repeating process. Firm can take odds against its competitors if further changes are predicted properly.
External environment consists of following components:
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Legal Environment. Political, economical, social, technological are elements of legal environment.
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Political factors define the range of firm’s activities regulation and juridical foundation. Anyway the firm must act according to regulated laws, juridical base and other regulations directly impacting activities of the firm.
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Economical factors, in general, have a great influence for all companies, firms and organisations dealing with money. Economical situation in the country may have an impact on a small firm. Anyway, “Shadow” is not taking a loan from a bank to start and develop its business, so economical factor such as interest rate, should not be very topical. However our firm, like all other firms will have to pay taxes.
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Social factors have not strong impact for demand as economical factors. Of course it depends how our company will manage to present themselves to the society.
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Technological factors have also great influence for development of the firm and activities. The process of technological revolution is constant, because technical innovations upstart very quickly. However sometimes these innovations may not have direct influence. Usually innovations touch activities of the firms positively.
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Economical Branch Environment. Economical branch joins the whole of organisations, which provide similar services or sell similar goods. At the moment there are a lot of firms managing on such activities, which are different by its size and kind of production. As we know, competition is critical economic factor of market. Therefore we have constantly to gather and analyse information about competitors activities, plans, coming new competitors and their efforts to take bigger part of market. Accordingly to results we have to correct the direction of firm’s activities.
3.2. Marketing Set
3.2.1. Product
We are planning to offer such stock of films at the beginning of the business:
- 12 types of protective films;
- 30 types of films for cars;
- 24 types of decorative films, which are designed for the buildings.
After equipping parlour of samples, “Shadow” could expand the stock of films three times, because manufacturer produces special films, which keep warmth in accommodation, helps to protect artwork from discolouration and other films.
3.2.2. Determination of Price
It seems that it is easy to choose the best price for the good or services. Actually it is also hard task. There are two cases of price determination:
- when the product or service is not new;
- when the product or service is brand new (never been before in the market).
Our service is new, so it belongs to the second group. The firm follows particular criterions. There are three main criterions:
- Prime cost of the product;
- Demand of the product;
- Prices of the competitors.
When the firm determine the prices, it follows all these three criterions.
Price determination according to prime cost. To put the case that desirable price is P, prime cost – C and desirable profit rate (in percents) – R. Then the price will be counted using the following formula:
P = C * ( 1 + R / 100 )
Trader understands prime cost as the price of buying product directly from manufacturer. Forthcoming percent of the profit has to cover the prime cost and amount collection for development. The profit rate of “Shadow” firm will be 30 percent. It is not too difficult to determine price by this way.
Price determination according to demand. In our case demand should be high and I think there will not be big danger that people will not be using our services. If we raised the price, customers would buy less or would buy at our competitors for lower price.
Price determinations according to competitors. Competitors provide the same services so will have to pay attention to their prices in the market. The prices of analogical services should be a little bit lower than competitors. Since our firm will get the products directly from manufacturers for lower prime cost than competitors, we will be able to adjust prices in the market by ourselves. However, it is not purposeful to decrease prices very much, because profit rate will decrease as well.
3.2.3. Distribution
There are various possible ways of distribution of our products:
- We buy films from manufacturers and then we advertise it, form wide stock, help our customers to choose.
- The customer chooses the product from manufacturer catalogue and then we order it taking some money in advance.
3.2.4. Sponsorship
Sponsorship helps to contract relation between firm and its customers. The purpose of such relation is to achieve customers to buy our products and use our services. The relation must be such that customers could find necessary information about products and services any time. There are four types of sponsorship:
- Advertising;
- Sales incentive;
- Personal sale;
- Popularity.
In order to let people know more about us, we will be using advertising on TV. We will also advertise our firm on TV if we expand the stock of products. However this type of sponsorship is quite expensive, so it is not affordable to advertise the firm constantly.
Sales incentives are prompted with discounts. Bigger discounts will be given to constant customers. Discounts reduce the profit rate, but it might be effective as well.
Personal sale is when the customer and seller can negotiate about the price with permit of the owner.
Popularity is the cheapest type of sponsorship. In order to attract more customers we will distribute free pens, posters, leaflets.
4. Organisational Plan
4.1. Organisational Structure
Managing and organising has a great influence for successful development of the firm. The biggest responsibility and liberty of decision-making in our case will be for the owners of the “Shadow”. The leader thinks that good managing is when all planned works are done; all the points are scored in the most effective way.
Anyway, in the individual firm the owner/boss is responsible, because it is his property. In our firm is linear structure of management. If there are not too many employees, it is easy to liaise with them in order to make control more effective and to get better information about the activities.
All employees will directly under control of the owner/boss and they will be responsible for their duties. They will share the information with the boss about any faults at work, for example broken tool. Employees reports to the boss about the fault, so that he could transfer some money for repairing or buying a new one. After that employee takes care where the tool will be repaired or bought and how long it will take.
Also accountant is subordinated by the boss. He is responsible for all financial actions in the firm, prepares reports, so that the boss could settle up with tax institutions. Reports of the firm are very useful for the owner, because he can see exact financial situation every month. Thereby he sees incomings, outgoings and profit, so he can compare reports of few months and see where the firm spent most, which month was financially better and analyse information.
Clerk of the works is responsible to the owner as well. He has to prepare information about the number and format of orders. To notify the owner if there are any customers who want to negotiate with him. Furthermore clerk has to provide information about any complaints. After assessing the information, the owner has to make decisions and coordinate the activities.
Therefore it is useful to use such management system, when the owner can get different information from his employees. Furthermore employees can communicate with their boss to ensure successful development of the firm.
Organisational structure
4.2. Personnel Selection
The success of every firm depends on firm’s personnel. So it is important to have a specialist who could assess and select good employees. Then there are fewer chances to slip up. On the hand if the owner decides to select the personnel himself, he must be very careful and to think of many details like:
- Which employees could be the best?
- What requirements will be for employees?
- What are the rights, duties and responsibilities of employees?
- What salary will be paid for them?
So the owner has to pay a lot of attention by choosing proper employees and giving them exact jobs, because the owner himself will not be able to do everything, even though business idea is perfect and is planned very well.
Fore a permanent job “Shadow” firm needs at least 7 employees. Administrative activities are constant, so a bigger demand of employees should not appear. Accountant has a lot of work, so the salary is accordingly higher for this position.
Employees’ salaries for one month are:
Accountant – £ 2000
Clerk of works – £ 1700
Labours (4) – £ 1000 x 4 = £ 4000
Shop-assistant – £ 1500
Total: £ 9200
5. Findings
The behaviour and results of the firm in economical market depends on comprehensive and reliable information. Only then participant of the market can make well-balanced and reasonable decisions. Every businessman or investor has to analyse tendency of financial rates of the firm, predict dynamics and perspective in the future. It is not enough to have general financial information for the owners and then just to make decisions. They must know how to assess their own and their competitors’ financial situation and opportunities.
After financial analysis, it is possible to display internal reserves, allow strategy of the firm and to make necessary decisions.
When the business is organised not for one year, but to the effect that the firm will be working permanently, it is very important to analyse current circumstances of the market, to predict upcoming changes as exact as possible and to create the plan of the firm’s proceeding.
In contemporary market we can not forget the meaning of quality. If the firm wants to be preponderant it has to pay attention to it. Only if 100 percents of the quality will be trying to reach, the firm can become the leader in the market.
After analysis in Table 3 in appendixes, we can see that after investing 150 000 pounds from own capital and 431 396 pounds of cash sales, we get 581 396 pounds. Then after we minus outgoings, we are planning to have the profit of 379 115 pounds per year.
6. Appendixes
Table 1: Break-even
Graph 1: Break-even
“Shadow” firm
Balance Sheet as at 31 December 2008
Table 2: Balance Sheet
