Business Essays Business Plan

Business Essays Business PlanBusiness PlanIntroductionTo assess the viability of whiz of Indias business program, it is useful to realise three aspects of the planSuitability come to with whether the business plan fits the infixed and external environment that Star of India ope considers inAcceptability this refers to stakeholders expectations of the business plan feasibility this relates to how achievable the business plan isThis report will address all three aspects and show whether the plan is viable under each.SuitabilitySuitability is concerned with analysing Star of Indias business plan based on an analysis of its internal and external environment to obtain its strengths, weaknesses, opportunities and thr corrodes.Strengths and WeaknessesStar of Indias strengths and weaknesses, derived from an analysis of its internal resources reveal the followingMoneyThis is a definite strength as the return on capital employed (ROCE), gross and gain adjustments argon spectacularR OCE calculated as net loot divided by capital employed and cipher by 100 is 112% for the divisionROCE reveals the amount of profit take in from the injection of capital or net assets into the business. This higher(prenominal) ROCE is due to the high net profit made from Star of Indias operationsGross margin calculated as gross profit divided by sales multiplied by a 100 is 75%Gross margin reveals that Star of India is efficient in converting the cost of goods sold into income from salesNet margin is calculated as net profit divided by sales and multiplied by 100 i.e. 46%It comp bes how much profit Star of India makes when compared with 1 of income. It shows how effective the business will be in controlling its expensesThese figures show that the plan is suitable from a financial perspective.Break-even is expected to occur between fearful and September, by which time the wide sales revenue will equal total cost for the period. The margin of safeguard, i.e. the excess of expe cted sales over break-even sales is approximately 490,000 (i.e. total sales for the year minus total sales from April August 2006).MarketingMarketing is a key consideration. Good money is being spent on advertising. Advertising in the industry is mainly through formulate of mouth and leaflets. By advertising through television and radio, the possibility to gain increased business is real.As Star of India is an unknown quantity, it is vital that a caboodle of effort and money should go into marketing. However, the business could use its considerable remuneration to invest more in Marketing/advertising.The price being charged for its dishes contributes to the high profits, but the question that needs to be addressed here is, is it suitable to reach out competitive advantage? If the prices are below or match industry average then it is suitable if not, then customers would rather go to an established competitor. The prices charged are competitive.The plan has accounted for seaso nal variation as demand should right decrease during the summer months due to holidays.Opportunities and ThreatsIn this industry, the main issues areThe extent of competitive rivalryThe social behaviour of the populationPower of customersHealth and safety issuesBecause the competition is fierce, Star of India must ensure the prices it charges at least matches the industry average. Otherwise, customers (who have a lot of choice due to the numerous competitors) will eat elsewhere, bearing in mind Star of India is a new entrant to the restaurant business. Therefore, matching industry average could be a threat as the Star of India brand is yet to be discovered and trustedPeople eat a lot outside their homes nowadays (social behaviour) due to increasingly vigorous lifestyles, this consequently means that the opportunities for getting a good customer base exist.Health and safety issues are very important to the government (who can rigorous down business if unsatisfied with their health and safety initiatives or lack of it) and customers would basically like to eat in a clean environment this provides an chance for Star of India.AcceptabilityFor the business plan to be acceptable, it must meet the needs of the main stakeholders, who in this case areThe ownerThe customersThe GovernmentThe employeesThese concourse will have different needs. The business plan, on the whole will be acceptable to these shareholders due to the followingThe ownerThe owner is interested inMaking a profitIncreasing the number of customersReducing costsThe plan reveals that all of these will be met.As mentioned previously, ROCE, gross margin and net margin forecasts are impressive indeed and would no doubt exceed the managements expectations especially during the first year of operation. There is also a positive cash flow in all but one month. This is important for the business to be able to honour its credit commitments as they adjudicate due. Star of India can also use the profits to grow the business. The plan also indicates an increase in the customer base, starting with 1820 customers in April and ending the year with a forecast of 7000. Again, this indicates a growth plan, which should be acceptable to the owner.Although costs will be rising, this will be at a s write down rate than revenue again, this is acceptable.The customers will be interested in obtaining superior food, at competitive prices in a clean environment, delivered with good customer service. Star of India is cocksure of achieving all of these.To achieve the service needs of customers, the employees need to be well trained and highly motivated. The plan for the next financial year is to use the profits to train and develop new and existing employees and also to reward them through incentives.The government needs to ensure that Health and Safety standards are being met, taxes are being paid and that customers and employees are not being exploited consequently, Star of India is confident th at the government will be acceptable.FeasibilityThe employee and management are experienced, therefore, delivering quality food through superior customer service is feasible.The business plan reveals there are enough resources to meet the costs of the business arguably in any case much resource. How many new businesses could make such vast amounts of money? The plan has barriers in the form of competitive rivalry, so the forecasts could be at risk of infection of being regarded as too optimistic, admittedly.The prices charged may need to be reviewed, if they are too high. Even if they reflect industry prices, it would be advisable to lower them as Star of India is a new business. This will ensure more customers who are made aware through advertising, will be attracted to the eatery, thus reservation the sales forecasts more realistic. This could be done as a promotion, for instance, for six months.More money could also be allocated to advertising from the vast amount of profit t o ensure the optimistic customer targets are achieved.ConclusionThe plan is very viable, when taken into account its suitability and acceptability.However, although it appears feasible, Star of India could be a bit cleverer to achieve high market share and thus competitive advantage by cutting its prices this should make it more feasible.The business should be an immense success if these factors are taken into account.BIBLIOGRAPHYwww.bized.ac.ukwww.businessknowhow.comwww.moneychimp.comwww.nonprofits.orgwww.smalltownmarketing.comwww.unb.ca