Big 4 Snacks Business Plan
The year 2014 marks the birth of a small, promising company which was founded by four members aiming to be the leader in providing biscuits to other retailers as well as final consumers. At present, the company buy its stock form One up Wholesaler which is located in the central suburbs of Cape Town. The company would like to register its business with the respective authorities and achieve a legal business status. The company aims to grow in the near future to the extent of becoming the manufacturer of its own products and supplying to retail shops as to the customers. This will be achieved by the company through taking a loan for the bank to purchase industrial biscuit making ovens hence the ability to produce the products in bulk. Having been started by four members, the members have equal shares in the business.
The Big 4 Snacks is a small company that was started by four members namely Cumani Nako, Rhandzeka Mawuku, Rampai Mokomatsilili and Tinashe Munyuki. The company’s main core business entails selling Snack (biscuits and sweets) in the Western Cape Province. Mission We aim to provide the best Snacks to our valued customers at moderate prices. We view ourselves as partners with our customers, employees as well as the society at large. Values: We have our own unique values which defines our business. These include: Integrity- we believe that the value of being honest in business operations; be it with customers, suppliers, employees, among other business stakeholders, overrides the need for profit making as creating good reputation in the market can lead to endless sales volumes. Professionalism- we take all our transactions with our key stakeholders in a professional manner, creating a strong bond with them hence enhancing the growth of our business in the market. Goals- the Big 4 Snacks aims to achieve the following objectives:
The market for Big 4 Snacks focuses on a segment with the following characteristics:
The current size of the target market is approximately 500 individuals which is likely to be 37% of the target market
The Big 4 Snacks operates in a market environment where there is massive competition. Some of the competitors are listed below.
The company provides the following products: Biscuits Sweets
The most common strategy in place at present is the word of mouth. This has been effective as it allows us to engage with customers in terms of promoting our products and our brand. We also use social networks including facebook, twitter as well as sending emails to most of our customers.
The following prices apply:
|Snacks||Price in Rands|
|Biscuits (3 packets)||R5.00|
|Sweets (10 sweets)||R3.00|
The company obtains its products from a reliable supplier called One Up Wholesalers at a relatively low price. The supplier is close to the business premises hence less transport costs.
The Big 4 Snacks is located in Cape Town at Tsiba Education, Pinelands. The pale is close to the Railway Station (Mutual Station) hence easy transport of employees to the workplace. It is close to our supplier, namely One Up Wholesalers. From the feasibility study conducted by the marketing team, we noted that the pale is accessible to customers, most importantly students as they for the biggest proportion of our market share.
The management team consist of the founders of the business. However, each and every member among the members will be focusing on a certain component of the business.
The following diagram shows the organisational structure of the Big 4 Snacks at present. Duties and Responsibilities of each member Tinashe Munyuki- Managing Director
Cumani Nako- Chief Finance Officer
Rampai Mokomatsilili- Marketing Director
Rhandzeka Mawuku- Chief Operating Officer
|PROJECTED STATEMENT OF FINANCIAL POSITION FOR BIG 4 SNACKS|
|Non current assets|
|Equity and Liabilities|
|Non Current Liabilities|
|Long term loan||750||29800||130800|
|Total Equity and Liabilities||2350||64000||160000|
|Projected Statement of Financial Position of Big 4 Snacks|
|Cost of Sales||1100||9000||34000|
|Water and Electricity||1000||1000||2300|
|Net Profit Before Interest and Tax||850||6500||211500|
|Net Profit After Interest and Tax||360||3500||207400|
As it is the best thing to find the likely causes of the business failure, the Big 4 Snacks identified the following challenges/risks which might hinder success of the business.
This entails the contraction of the market size due to availability of other businesses offering the same products as ours. Fighting for the same market share, competition will lead to reduced sales of our business thereby lowering the profit margins. Despite the government’s efforts to support small businesses, massive competition from big companies such as Shoprite and Pick n Pay remains a difficulty in the growth of small businesses. This factor might affect the performance of our business even though some measures have been put in place to ensure building a good brand image as well as creating a positive goodwill.
The performance of the South African economy has been fluctuating, being characterised by continuous trade cycles. Taking this into consideration, our business might be affected negatively by the high rates of inflation, leading to costly supplies from our suppliers. This will in turn affect the returns to the company.
As a business which might need to borrow money in order to boost the operation of the business in the near future, the cost of borrowing remains a challenge Depending on how our cash flows will be in the near future, the need to borrow some funds might lead to an increase in the expenses of the business, thereby reducing profits.
In regard to the standards of living of an average South African, especially considering our target market, poor standards of living will lead to a decrease in our sales volumes.
Combining all the information compiled in this business plan, the Big 4 Snacks is a vibrant, promising business which sells snacks (biscuits and sweets) currently at TSiBA education. The company aims to expand in the whole Western Cape Province, becoming the leading provider of snacks to retailers as well as to the final consumers. Despite the challenges that might be encountered in the business operations, the company aims to increase its market share, creating a positive goodwill in the market. 1
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