Business Plan Group 9 [PDF]

Zitiervorschau

Table of Contents I. Executive Summary: 1. Current status: 2. Background: 3. Key Points of review: II.

Industrial Analysis:

1. Market analysis: Market for recycled decor products is more widespread in Vietnam. Despite of presence of different manufacturers that provide a large variety of decor items, demand for recycled decor products is substantial. People prefer recycled decor products for decorating because they provide a sense of individuality and uniqueness. This tendency of people indicates towards potential and depth to invest in this business.Currently, t here are no big players in the market of this industry. About 70% of players in Market are online business. Due to advancement in technology and rapid adaptability of the internet, this industry is being promoted online. Major players in Market use internet based promotional tools. They have published their products online to attract potential customers. This trend in the industry caused “Company” to be a manufacturing business, which can fulfill all the orders of the customers quickly and continuously. 2. Key success factors: Designs and artistic techniques of production are the basic and primary assets of Evergreen. With These two resources we will be able to develop the most unique products in the marketplace. Firm’s creative management is also a strategic resource for Evergreen. Management team is required to be innovative and has a passion to pursue opportunities related to recycling decor products. As the business grows we will carry on developing new designs and will strive to hire people who also possess the drive to continue Evergreen's goal to develop the new designs and bring innovation. 3. The Five Forces Model ●

Threat of new entrants(HIGH)

Threat of new entrants for Creative is high.This is because the trend for use of handmade items is evergreen. Start up cost is also low which shows that there are low entry barriers. This attracts new entrants to enter this business.This threat can be lowered by maintaining a sustainable competitive advantage by providing quality products and innovative designs. ●

Rivalry among competitors(LOW)

Rivalry among competitors is low for company as there are a few competitors in whole industry. In target market no direct competitor exists so Company has a golden opportunity to capture maximum market share. ●

Threat of substitutes(MEDIUM)

Threat of substitutes for Company is medium. There are a lot of substitutes available in market for products of Company.prices of products in market are more than company's products. So,switching cost for Company’s products is medium. ●

Bargaining power of the buyer(HIGH)

Bargaining power of the buyer with Company is high because of the availability of so many substitutes in the market. ●

Bargaining power of the supplier (LOW)

Bargaining power of the supplier is low. Because of availability of large number of suppliers in the market, Company is in better position to defend its interest. III. ●

Company Description: Description:

The name of our company is “Evergreen”. ''Evergreen" is a new SME investing in an existing sector but full of growth potential in vietnam. In vietnam,there are lots of people who are looking for different kinds of recycle decor products for decor home. But one might not find all the recycle decor products from one place. Idea of “Evergreen” is to provide a large variety of unique and creative recycled decor products for decor homes. It is basically a manufacturing as well as merchandising business in which we are going to present a wide assortment of recycled decor products.We have started our business as partnership business. We are 3 partners who share equally in startup capital and hence are entitled to share equally in profits. Any other need for capital will be entertained by respective bank. On the other we are having both online and normal Product selling system. Besides, we are creating jobs for the urban people who are currently unemployed because of not having any proper guideline to reach their products to the customer. ●

Mission Statement:

Changing the mindset of decorations, bringing a whole new type of decorations. IV. 1.

Marketing Plan: Market analysis

The customers of Evergreen decoration will be divided into two types: individuals and store owners (coffee shops, clothing stores, etc.). For individuals, they are customers who want to

buy the products to decorate their rooms, houses, etc.…, they may just buy one or few products to change their own atmosphere at home. For store owners (coffee shops and clothing stores, etc.), they are customers who want to buy the products to decorate their stores, mostly they will buy mass products for their stores, synchronization of all the decorations to make a vibe for their stores. By dividing by geography, Evergreen has two market segmentations, Ha Noi and other provinces because we locate our only showroom and our only factory in Ha Noi capital so the customers from Ha Noi and other provinces will be distinctive. It is related to warehousing and shipping as well as customer service. For customers living in Ha Noi, they can go to the showroom to choose as well as the shipping cost will be low or free. For customers living in other provinces, they have to choose the products from our website and e-commerce platforms (Shopee, Lazada, etc.) and waiting for the shipping with higher shipping fee. By dividing by income, our business offers a wide range of prices for the customers from uniquely customized and personalized products for customers who want their decorations are the only no matter the price (the customers with high income, can be more than 6 million dongs focusing on the products only) to more affordable available decorations for customers who want to experience new type of decorations with better price (the customers with lower income, lower than 6 million dongs focusing on the price more than the products, they won’t buy too expensive products).

The statistics from Statista by Minh-Nguyen-Ngoc, Monthly average income per capita in five urban cities in Vietnam 2021 By dividing by psychographic variables, we focus on the customers who have the green lifestyle supporting recycled products and environment protecting activities and the customers who have vintage, old-time lifestyle and they like recycled products with old-time style looks.

2.

Consumer behavior

For the consumer behavior, we will focus on how to access each segmentation. Firstly, for the individuals who want the products to decorate their homes and rooms. For this segmentation, we will focus on selling attractive and easy to carry and fit decorations like sleeping lamps, carpets, crystal balls, pictures, etc. These products have to be easy to fit with most of the rooms about the style and space. The designs can be outstanding and attractive for most of the customers who want for their own space at home. Secondly, for the store owners who want the products to decorate their stores. We will have some talks with these customers and ask them everything about what they want and give them some advices for choosing the most proper decorations. For people who don’t know how to start we will have free decorating service for them from choosing to setting up everything. Each store owners will have different tastes and want to set different vibes for their stores so the service following the products is necessary. Thirdly, for the customers in different locations. We guarantee the safest and fastest service in Vietnam to ship the products, all the products will be delivered to the customers fastest with 100% protecting policy, everything will be protected, if the products have any flaws and cracks, etc. we will return 100% money if the customers want or give them a new exact products, the shipping fee and price of the products, delivery insurance will be listed 100% for the customers before shipping. For customers who go directly to the store, we will give them advice about choosing the products and answer all the questions about the store and all the decorations. Fourthly, for customers with different income, we will give the advice and treat them 100% politely the same. We will give them information about all the products we have based on basic information of the types of product they want. After that, we will be based on the price range they want to offer the products suited to the that range. If they can afford high price products, we will offer customized unique one, if they can afford lower price products, we will offer other available types of decorations. Finally, for the customers with different lifestyle, for whom have green lifestyle, we will ask them questions to segment them into above types of customer to give them the best advice. For the customers who have like vintage, old-time lifestyle, we also need to define like above plus offer them some unique decorations suited to the vintage decoration vibe. 3.

Competitor analysis

For the competitor analysis, in this industry, there are very few competitors, mostly they are very small and have no market power, they may be just individuals who love to make recycled products and they can’t afford mass production. Our target market is also very niche, the customers are people who have different taste of decoration and who have environmental awareness. In Vietnam, not all people have those two attributes so the number of sellers who can satisfy the people who have those are really small and there is no big one who can do mass production with guaranteed quality to bring the products to the customers.

The substitutes can be varied but they can’t be as good as ours and if the customers want to have many decorations, those small seller can’t afford so we can satisfy a wide range of customers so the competitors comparing to our business are weaker. For example, one star-up about plastic recycled in Vietnam, it is PLASTIC people, this company focuses on recycle plastic into reusable materials and they are used to make interiors and decorations for coffee shops, restaurants, etc. The main products of them are mirror frames, wall lights, planters, garden trellis, sachets, chip bags, etc. This competitor is a big company but its main purpose is not selling, it aims at a bigger target which is enhancing the environment awareness of Vietnamese, their products are mostly to advertise and spreading this mentality. The most important thing is this company just focusing on recycled plastic products while we focus on all types of recycled product. Their customers are usually very big chains in Vietnam (Highlands Coffee, Pizza 4’Ps, etc.) while we focus on individuals and smaller store owners. 4.

Marketing strategy

For the marketing strategy of our business, we focus on the marketing mix 4P to make the decision. ●

Place:

We choose to locate the showroom at Hoan Kiem district, Ha Noi. It is the central district of the capital Ha Noi so number of people are very large, the road and sidewalk are always crowded so the number of potential customers can be more than any other district of Ha Noi. There are both visitors and people living here walking through this district every day so we can reach more segmentations and more types of customer in this place. ●

Price:

The prices of our products are varied, from low price to higher, middle, high price. The available products with our designs and mass production are very affordable for the customers who want to try new decorations or just want to spend less money. The customized and personalized products are hand-made from the orders of the customers. We will receive every information of the products first and then make for the customers unique decorations from their demands. This type of product is more expensive and for the customers who really want to have something just only for them no matter the price. The price range can be varied from 50 thousand VND to 2 or 3 million VND based on the decoration types. ●

Product:

The products are varied from a host of types of materials. They can be Recycled decorations (drinking tables with discarded wooden doors, flower vases made from cans, lamps made from buckets and napkins, water cups, dishes, paper, pens, flowerpots, notebooks, etc.) which are unique and attractive. They can be made from recycled plastic, wood, paper, etc.

There are two main types of product which are hand-made customized decorations and mas production products available in our warehouse and store. ●

Promotion:

Word-of-mouth: We will do our best everything from the product to service with special experience for the customers to get the promotion from our old customers, word-of-mouth. Running ads on Facebook and Instagram: We will open two pages, one from Facebook and one from Instagram to run the advertisements. Those pages will be developed and upgraded every time to get the best visual to attract the customers. The budget can be varied, few 300-400 thousand VND for one post and ad. Running ads on e-commerce platforms (Shopee, Lazada): Those e-commerce platforms always have the suggestions for hot and best-seller products or we can spend money for those to get more suggestions. Each product has different price and kept time on the main page of the platform, for our products, it can be 1 to 2 million for all the online store and all the products. Making an attractive look for the store: We will build a store with the vibe and style of old-time look with our decorations to attract the customers around the store and who are far from the store still can recognize if they can see it. The look will be suited to our decorations used to decorate the store and they will be also suited together. The vibe will be attractive enough to get more customers to go to our store.

V.

Operation Plan: ●

Geographic location of business:

We've decided to set up our business at Hoan Kiem, Ha Noi, which is the only showroom. Because here the place is crowded & here is a huge market for handmade goods. We have stowage at Gia Lam, Ha Noi & supply all products from there to all retailers and sales associates. Here the transportation and all other resources are available. The surrounding environment is quite good. We can transport our manufactured items to HoanKiem district easily. ●

Firm’s facilities and equipment:

Manufacturing: Our factory is located in Gia Lam Hanoi with an area of ​about 200m2 Shop: In the first phase, we focused on investing in a main store in Hoan Kiem district, near where many people live, and convenient transportation. The store is spacious and airy with an area of ​about 20m2, 1 floor to display and sell products., after the main store comes into operation with stable income from 1 to 2 years, will proceed to expand more branches in other areas. Equipment: Our equipment is protective products, scissors, saws, ... Raw materials:

The source of materials such as old newspapers, plastic bottles, cans, glass jars ... of the store are the shops. Selling end-of-use materials on Hanoi streets and scrap trading establishments in Hanoi. In particular, through campaigns to collect waste paper and plastic at universities, colleges and high schools in the area to get cheap raw materials. In addition, to make handmade products we Also need other supporting materials such as glue, ribbon, zipper … ●

Structure of the company:

Personnel organization: At the factory, we will arrange 1 production manager,1 operation manager, 5 employees with handmade skills and 1 financing manager. Stay at the store: We will arrange 1 store manager, 1 offline salesperson,1 online sales staff,1 marketing manager and 1 accountant. In addition to the main salary, the employees are entitled to monthly allowances for lunch, fuel, and bonus for diligence. ● Production organization: the company's production process is carried out through 3 stages:

●

Organization of the consumption system:

Products will be sold directly at stores and sold online on e-commerce platforms such as facebook, shopee, tiktok. For products supplied to stores and sales associates, they will be labeled with the company's logo and delivered on time. ●

Management team:

Evergreen will be run by the current team, composed of three members. Each of team members has developed skills in specific areas that will help the firm to reach its goals. There will not be the involvement of tremendous financial resources in the human resource field because the firm intends to remain closely supervised for the first year. -

Cuong - Finance manager

The manager alone looks after all jobs of accounts and approves all investment decisions on the basis of their logical and analytical analysis. He alone is responsible for recording all revenues and making all expenses accordingly. He has to maintain all financial statements of the firm, which are required for auditing. -

Cuong - Operation Manager

Operational manager is mainly responsible for all operations that are performed on daily basis.He is responsible to deal with Customers and the courier company for distribution of products that are ordered by the customers in other cities. He is supposed to keep a deep eye on production process by staff and all daily happenings in outlet. -

Duc - Marketing Manager

Manager of marketing department is mainly responsible for all advertisements and promotions of business and to take feedback from the customers. Market surveys will be made by him and changes according to the demand of customers will be made. The manager will be the final authority to take decisions of all the matters of that department. The complaints of customers will be discussed in monthly meetings and the manager is answerable for that. -

Hieu - Production Manager

Manager of production department is responsible to supervise all the activities of production process. He has the authority to evaluate the performance and quality of products being produced. He is also responsible to approve new designs of products to be produced.

VI. ●

Financial Plan: Source of fund:

Company has three active partners, who are fulfilling the whole capital requirements to meet its startup cost. Capital Structure of Company includes only Equity. No debt is included to raise funds because it has an extra burden of expenses as interest, which results in lower profits. ●

Equity structure:

NAME

CAPITAL INVESTED

LE CHI CUONG

150.000.000 VND

VAN PHAM HONG DUC

150.000.000 VND

NGUYEN TAT HIEU

150.000.000 VND

●

General assumption sheet: in 1 month:

General assumption Receipts:

Amount(VND)

Sales

200.000.000

Disbursements : Raw Materials

15.000.000

Labor cost

48.000.000

Rent (factory and store)

35.000.000

Fixed manufacturing costs

20.000.000

Fixed admin and selling expenses

16.000.000

Variable admin and selling expenses

30.000.000

Equipment

10.000.000

Advertising

10.000.000

Logistic (outsource)

5.000.000

Sales amount = Average sale prices x Estimated number of units sold= 100000*2000

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PRO-FORMA INCOME STATEMENT

Following is Evergreen’s projected income statement based on estimated operating expenses. Projected net profit is calculated from projected revenues less projected costs and expenses. Pro-Forma Income Statement in 2023-2024:

Revenue

2.400.000.000

Less: Cost of goods sold Raw Materials

180.000.000

Labor cost

576.000.000

Fixed manufacturing costs

240.000.000

Depreciation

10.000.000

Rent (factory)

180.000.000

Gross profit

1.214.000.000

Less admin and selling expenses Rent (store)

240.000.000

Salaries

192.000.000

Advertising

120.000.000

Logistic (outsource)

60.000.000

Variable admin and selling expenses

360.000.000

Operating profit before tax

242.000.000

Less tax

48.400.000

Net profit

193.600.000

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PRO-FORMA BALANCE SHEET

A summary of Evergreen's financial position at the end of year 2023 shows projected assets, liabilities, and net worth of it. Pro-Forma Balance Sheet of Evergreen is as follow:

particulars

amount(VND)

Assets 693.600.000 Cash 273.600.000

Equipment 100.000.000 Inventory 100.000.000 Account receivable 210.000.000 Less depreciation 10.000.000 Liabilities 50.000.000 Account payable 50.000.000 Owner's equity 450.000.000 Net profit 193.600.000 PRO-FORMA CASH FLOW STATEMENT of Evergreen in 2023-2024: Particulars

Amount(VND)

Operating Profit 242.000.000 Inventory 100.000.000 Depreciation 10.000.000 Account payable 50.000.000 Less Cash flow from capital Expenditure Equipment 100.000.000 Account receivable 210.000.000 Net cash flow from operating activities

292.000.000

ROA= Net profit / Asset = 193.600.000 / 693.600.000 = 28% ROE= Net profit / Owner’s equity = 193.600.000 / 450.000.000= 43%

It is expected that revenue will increase by 10% per year,the pay back time period will be estimated: Pay back time= Investment / Annual cash flow = (100.000.000+210.000.000) / 193.600.000= 1.6 years 292.000.000