your business background

MADE FOR MIZZI

BUSINESS PLANPrepared by; Sam Messmer, Andrea Mizzi and Chan Richardson

2010

Copyright 2010

August 2010 The Small Business Plan for Made for Mizzi

TABLE OF CONTENTS FOR WRITTEN REPORT

1. INTRODUCTION...................................................................................................................3

2. BUSINESS SUMMARY AN OVERVIEW OF THE WHOLE CONCEPT..............................4

MARKETING PLAN:...................................................................................................................4

OPERATIONAL PLAN:...............................................................................................................5

FINAN CIAL PLAN:....................................................................................................................6

3. BUSINESS PROFILE - THE BUSINESS OF YOUR BUSINESS........................................6

SWOT ANALYSIS (IDENTIFY STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS FOR YOUR BUSINESS AND KEY PERSONNEL):...................................................................9

4. MARKET ANALYSIS - THE MARKET & YOUR POSITION IN IT.....................................11

MARKET RESEARCH..............................................................................................................13

MARKET SEGMENTS..............................................................................................................16

5. COMPETITIVE ANALYSIS.................................................................................................17

6. MARKETING PLAN - SELLING YOUR PRODUCT/SERVICE..........................................18

7. OPERATIONAL PLAN - HOW THE BUSINESS WILL WORK.........................................25

8. FINANCIAL PLAN -YOUR INVESTMENT & EXPECTED TURNOVER & PROFIT..............31

10. ATTACHMENT 1 - OPERATIONS PLANNING CHECKLIST............................................39

11. ATTACHMENT 2 OPERATIONS PLANNING CHECKLIST 2...........................................41

12. ATTACHMENT 3 REFERENCES.......................................................................................42

13. ATTACHMENT 4 ACTION LOG.........................................................................................43


1. Introduction

This business report will cover the Marketing, Operational and financial planning’s of ‘Made for

Mizzi’ as well as Market research and Competitive analysis. Based on the following findings and

data analysis, an accurate future out look for the organisation can be made. Made for Mizzi has a

business ownership that consists of an equal relationship between Andrea Mizzi, Sam Messmer

and Chan Richardson.

The product/service we will be offering are hand made caricature plush key rings, visually

appealing Japanese erasers and unique imported IPod cases (all at a reasonable price).

Our goals are to have a positive and popular reputation within the community for selling quality

products. We also aim to continual increase the bottom line of our organisation, whilst maintaining

a strong relationship with our consumer base.

Eventually ‘Made for Mizzi’ plans to expand the business to the global community through an

online market (E-business).


BUSINESS SUMMARY

2.1 Background and Description of Business:

Made for Mizzi, is a new, exciting retail business located in the Cairns CBD. The owners of this

business are 3 young its main products are IPod cases however the business is also selling

Japanese erasers and key rings. The business would like to focus on selling iPod cases

therefore our vision would be to make a name for selling good quality iPod cases and increase

our range of cases. Our mission statement provides our business with a direction in regards to

goals and aims. (Wikipedia, 2010)

‘We aim to provide products to consumers that are unique and different, something that

stands out and is visually appealing, whilst maintaining an affordable price.’

- Made for Mizzi mission statement

A mission statement is important for a business as it formally sums up the overall objectives of a

business to consumers and also employees.

2.2 Current business/economic position and future outlook:

During the trial at business enterprise week, Made for Mizzi resulted in the highest percentage of

profit (refer to marketing plan). The main customers our business attracts are people who own

iPods (for the moment nano, iPhone, or iTouch). Through research we have discovered that we

are going to have a large customer sector as half a million teenage own a portable music device,

with iPods being the most popular. Because of our instant success we are able to plan for our

businesses future which includes expanding into the global market. Our other products are also

appealing to the older market of consumers who wish to purchase something different and

‘unique’ (putting a personal statement at office/school/work). The customer profile analysis can be

found in the marketing plan of this business report (page??).

2.3 Marketing Plan:

2.3.1 An assessment of the market potential, market share and competition including marketing

strategies for next year:

A marketing plans function is to identify the needs of consumers and to classify stakeholders and

external factors which could impact on the business’s operation. It highlights the aims and

objectives of the business’s marketing ideas for either their service, brand or product line. It also

assesses the business’s market potential, market share, competition and marketing strategies for

the next year. (Mylonas, A. 2006)


Andrea Mizzi, 08/09/10,

http://en.wikipedia.org/wiki/Mission_statement

IMS, 08/09/10,

http://macdailynews.com/

It is important to find out our market potential to determine how much sales revenue we will

receive in comparison to our competitors. Market potential also helps us in acquiring information

on our market share, which is the sales volume of our brand and product in comparison to our

competitors. Our market share for ‘Made for Mizzi’ during our trial run of the business, was the

largest share in the merchandising business sector with a market segment of 17% (see figure 1

below). This shows that our market potential when establishing our business permanently has the

capacity to achieve in the retail sector, if we can identify who our target market is. Our strategies

to improve these figures will be to implement more advertising and promotional efforts, focus on

new ways to communicate to our target market and how to expand our market to new target

groups by expanding into more popular areas such as shopping centres where the target market

is more abundant. These marketing ideas for ‘Made for Mizzi’ will be defined, determined and

discussed throughout this section of our business plan for our expansion locally, nationally and

internationally.

2.3.2 Market size and your share by segment:Now (3 day trial):

Made for Mizzi's profit compared to other retail stores

A 9%B 7%

C 9%

D 6%E 9%

F 7%Made for Mizzi 17%

H 9%

I 13%J 1%K 8% L 5%

A

B

C

D

E

F

Made for Mizzi

H

I

J

K

L

Figure 1 – Made for Mizzi’s profit contributions in comparison to other retail stores at business

enterprise week

2.4 Operational Plan:

2.4.1 Product/service and or production uniqueness and differentiation:

The success of our business can be contributed to its uniqueness and attractive personal

statement it gives to our consumers. Our products such as iPod cases are closely linked with

popular technology of these current times. Therefore they are extremely popular with its

consumers. It could be said that consumers want a product that contradicts the organised,

straightforward approach of office and school work. By purchasing our product, they are

personalising themselves and enhancing their ‘individuality’.


2.4.2 The management team (experience, talent, and strengths):

The management team consists of Andrea Mizzi, Chan Richardson and Sam Messmer.

Combining our knowledge of the various business aspects, we are able to create an efficient and

effective business structure.

2.5 Financial Plan: Goods were sold to 53 students in Cairns State High school out of approximately 1400 students,

which made up an approximate of 4% of sales out of the whole school population. In future, if

“Made for Mizzi” is to expand into a small business that is running in Cairns only, with the

population of approximately 142 001 people, there will be roughly 5860 people who will be

purchasing our products.

If we were to increase the numbers of our products and provided more choices for the consumers

such as more iPod Nano cases for the latest version or increase the amount of the popular stock,

the sales percentage could have been increase up to 10% of sales.

In future we will be focusing on selling such as cover cases, screen protectors and phone charm

accessories for electronic devices because during the school, they were the most popular

products. The electronic figures includes:

Ipod products: cases and screen protector for iPod touch, iPod Nanos and Iphone;

engrave the owner’s name of the ipods and maybe laptop bags.

Other phones accessories such as screen protectors and cases for the latest touch

phones

Cases can be designed and customised by the consumers

Key rings with a wider range appearances and colours.

The tables below demonstrate the cost to establish “Made for Mizzi” and the cost of goods sold.

The publishing fees will only be paid at the start when establishing the business. This fee will not

be included into the expenses later on.

Particular Cost of ExpensesPublishing fees $5,000.00 Other additional expenses $1,000.00 Rent per month $1,000.00 Phone and electricity per month $1,000.00Total $8,000.00

Monthly expenses

Particular Monthly ExpensesOther additional expenses $1,000.00 Rent per month $1,000.00


Phone and electricity per month $1000.00 Total $3,000.00

Cost of goods sold

ProductsOriginal

Cost Quantity TotalSelling Price Revenue

Ipod touch $4.15 200 $830.00 20 4000Ipod Nano $4.00 200 $800.00 10 2000key rings $1.10 200 $220.00 5 1000Machinery $1,850.00 7000

Profit $5,150.00

Net profit = $5,150.00 – 3,000 = $2,150

Projected financial results:

Sales: $ 5,150.00

Profit: $3000.00

Gross Profit: $3000.00

If this Business Plan is to be used as an application for funding:

Amount contributed by principal(s) $13,000

Additional funds required $5000

TOTAL FUNDS $18,000

2.5.2 Other comments:The calculations above are just an estimate of possible cost to establish “Made for Mizzi”.

It has not included the activities such as engraving names on iPod and the cost for

consumer to design their on iPod cover designs. If there is no profit made at the end of

the month, the business needs to find another suppliers will cheaper goods and maybe

decrease the cost of a particular product base on its performance of the month.

Business Profile

3.1 Business Description:

3.1.1 Details your business (its name, location and purpose) and your Mission Statement

‘Made for Mizzi’ is a merchandising business established and trialled for three continuous days on

Business Enterprise Week. During this trial we were located in the middle of the south wall (near

the epicentre of Enterprise Week). However after our successful trial we plan to establish the

business in a more permanent location within the Cairns CBD our new location was discussed in

section 6.5 of this report. The purpose of our organisation is to sell handmade caricature plush


key rings and visually appealing Japanese erasers, however we will focus on unique imported

iPod cases – all at a reasonable price. As mentioned in section 3.1

Our unique selling proposition is:

‘We aim to provide products to consumers that are unique and different, something that stands

out and is visually appealing, whilst maintaining an affordable price.’

3.1.2 Legal Structure of Business (tick as applicable):

Sole Trader Partnership Limited Liability Co

Trust Limited Liability Partnership Other (please indicate type)

3.1.3 Legal Structure

There are many different legal structures which a business can choose, in deciding on a

particular legal structure the following factors need to be considered; taxation, liability, risk and

control, continuity of existence, transferability, expense and formality. (QuickMBA, 2010)

Our business ‘Made for Mizzi’ chose a 3 –way partnership. A partnership is a legal structure

consisting of 2 or more participants and is he most common for small business set up. Our

reason for choosing this structure include that it is simple, it is financially and legally flexible, able

to share a work load and make more effective decisions cooperatively. The contract is also

binding and partnerships do not pay tax though they must still lodge a tax return.

3.1.4 Industry Knowledge and Experience / Skills of Key Personnel:

Name Position Knowledge & Experience / Skills

Andrea Mizzi Marketing Manager Techno-savvy, sales strategies

Chan Richardson Finance Manager accounting

Sam Messmer Operations Manager Hands-on approach, mediator

3.1.5 Location and Description of Premises:

Our trial run of our business was held at Cairns State High school, we were located along the wall

opposite to the hall (figure 2).

O RT E



http://www.quickmba.com/law/org/

HALLBULL RIDE

H TE AR I LF O SO TD OR& ESFOOD STALLMADE FOR MIZZI

ENTRANCEFigure 2 – Outline of our location at business enterprise week

The premises consisted of a simple foldable table – no lease and no electricity was used,

therefore no running costs were incurred. However, if ‘Made for Mizzi’ was to expand into a more

permanent premises such as a shop front in a popular shopping centre (cairns central, CBD,

cairns square). The running costs incurred per year would be approximately $60 000 for the lease

of the premises alone (Business Essentials, 2010). Costs that would also need to be taken into

account include insurance, electricity, taxation, permit/licence costs, import/export licence costs,

ABN etc. ore information about location is discussed in section 6.5

3.2 SWOT Analysis

Strengths

The strengths of our business ‘Made for Mizzi’, outlined in the earlier SWOT analysis; are offering

a fresh and unique product to our consumers (this was the main reason for our success during

our trial period), constant profits even though changes in product prices were made, some of our

products can only be bought online - our business gives our consumers the option to buy these

items in a real life situation and reduce their risk of fraud, our products were popular amongst our

target market, established our customer base through advertising our business, products weren’t

bulky therefore were easy and low maintenance to store, materials were relatively cheap –

especially when bought in bulk will increate cost effectiveness.



http://www.business.vic.gov.au/busvicwr/_assets/main/lib60208/sbv_infosheet_cash_flow_break_even.pdf

Weaknesses

Our main weaknesses were that it was very time consuming to hand make the key rings, delivery

times was extremely unreliable and suppliers were not dependable. This caused customer

dissatisfaction and loss of loyalty as the products they paid for were not available on the date they

were promised. Technological advances (IPod) caused depreciation in our goods sold (no longer

used by customers), causing a loss in finances. Because we didn’t manufacture all of the

products ourselves (IPod cases and erasers) the product availability was limited. These products

also required a large sum of capital to successfully run the business (purchasing stock).

Opportunities

Potential opportunities for Made for Mizzi include expansion into bulk buying products such as

IPod cases, erasers and materials required for the key rings. This would reduce costs and allow

us to compete with the more established organisations. Another viable option would be

manufacture the products ourselves, creating more independence and reliability increasing

customer base and satisfaction. Due to the small range of stock we would sell ‘Made for Mizzi’

would have to consider merging with another similar organisation to maximise bulk buying efforts.

As bulk buying will increase our customer base it will establish our business name and products,

therefore creating opportunities to expand nationally and international through E-business.

Threats

Threats that could impact on our business include a loss of customer base through established

competitors selling similar products. Also our established competitors have more finance options

to compete with smaller business such as Made for Mizzi. Their established name also poses a

threat to new smaller businesses as they would already have a well established customer base.

The relationship between suppliers and importers also poses threats through banking security.

Furthermore trustworthy suppliers must be sought and maintained or stock will not arrive on

schedule and financial difficulties may occur.

How will you maximise strengths, minimise weaknesses, capitalise on opportunities and

overcome threats?

For a successful business venture, especially our business segment, continual market research is

required. By being able to better understand consumers and their needs and wants, the business

is able to make relatively accurate purchasing trends – therefore assisting to maximise

profitability. Weaknesses and threats can be analysed and various solutions and improvements to

the organisation can be made, therefore decreasing weaknesses and threats, and increasing

strengths and opportunities.

3.2.6 Business Goals

Short Term


Short term goals, are the goals the business wishes to achieve in a year or less, for our business

this includes setting-up small cost effective shop front and introduce it to the market through

continual advertisement and exposure within the target market (music events, television,

community events etc). The creation of a reputation will help to increase sales and in turn,

profitability. Initially costs of setup will outweigh sales; however it is predicted that over time the

setup debt will decrease. These initial costs would come from all three partners (probably equally)

or from a bank loan (such as the Commonwealth bank ‘small business loan’ scheme). We would

also want to improve the relationship between suppliers and the business – attempt to increase

the delivery speed and reliability, or start to look elsewhere for suppliers.

Long Term

Long term goals are those that may become out of focused as they are further into the future, 3 to

5 years. However it is important to have these goals to guide the business through its expansion.

(Weinstein, C, 2001) Our long term goals are to keep at least a 50% profit margin will help to

ensure that operating costs can be covered (currently the products were marked up

approximately 50-150%). In the future, expansion for our business will be done by setting up an

online store, therefore dramatically reducing operating costs (only a warehouse and limited staff

would be required). Depending on sales and profitability, an increase in staff could be analysed.

Another option to reduce unreliability of overseas suppliers could be to produce iPod cases

ourselves. If it was cost effective, it could also be possible to manufacture in Australia – therefore

every aspect of the product could be personally chosen by us, and by being ‘Australian made’

would also improve the reputation of the business and increase sales. Another possibility could

be to introduce an increased range of products (depending on what the market research

indicates).

3.3 Personal GoalsPersonally, we would prefer to work part-time in the business, as we all plan to go to University.

However, a possibility would be to defer for 1-2 years until the business is steady and employees

can be hired. Life would be relatively time constrained, but that is not a new issue for us. The

business owners are all young and soon to become completely independent, therefore family

commitments would be assumed to dramatically reduce.

MARKET ANALYSIS - The Market & Your Position in It

Identifies, describes and analyses your target market and market share.4.1 Describe your Products and or Services:Products and services are what a business offers to its consumers to produce a profit and grow

the business. Products need to be appealing to the target market and can fall into one of the

following categories;

1. Consumer products

2. Business products



http://www.hhpublishing.com/_onlinecourses/study_strategies/BSL/motivation/E1.html

Consumer products are products that have already been assembled such as convenience

products, shopping products, specialty products and much more. Business products however are

industrial products and usually used in the production of making consumer products by other

businesses these include raw materials, professional services, instillation and more.

Our business ‘Made for Mizzi’ will be offering shopping products which is apart of the consumer

products category. Shopping products are items which a consumer will usually analyse and

compare with other competitors for cheaper price or higher quality. Line, breadth and depth all

need to be considered when introducing products into the business. The product line groups

products by usage, target group or price range. Breadth is used to account for the number of

product lines within the product mix. Within our business we have decided to categorize our

product lines through usage, creating a breadth of 3

product lines which are;

1. IPod cases

2. Japanese Erasers

3. Plushie key rings

Within each product line contains different variations of

that product, this is what is referred to as the product

depth. . (Mylonas, 2007) Figure 3 explains this

concept visually.

The IPod’s have 2 main types Soft (silicon) cases and hard cases. Japanese Erasers

have come in the shapes of foods (e.g. Milk shakes, pizza’s etc.). Our key ring’s come in different

identities, which our target market can familiarise with. Such as Pac man and Game boys.

Products are shown in figure 4 below;


Figure 3 – Product lines, breadth and depth

Figure 4 – products offered by Made for Mizzi


business text book page 172

4.2 From your customers point of view what are you selling?Products are far more than an item placed for sale; instead they also consist of other intangible

and tangible factors. Tangible factors include additional features, lifespan/cycle, its concept and

context. Intangible factors of a product include quality, prestige, convenience and reputation.

(Mylonas, 2007) Improving these intangible factors is what will draw our customers to buy our

product over our competitors. Therefore we have positioned our customers to view what we are

selling as more than IPod cases, erasers and key rings instead what we are really selling to them

is unique and quality products, a more personalized consumer experience as well as our goals to

maintain an Eco friendly business as much as possible. Therefore creating customer satisfaction

and building customer loyalty. Our intangible factors will set us apart from our competitors as our

consumers will be more likely to buy from our store than a competitor as they know they are

buying products which will help support a business which has a good reputation for quality

products as well as the global community.

4.3 Are there any external (political, economic, legal, cultural, social, seasonal) factors that may

impact or affect your business and what are you going to do about it?

External factors are factors which have the potential to cause problems for a business however

they do not occur within the business itself and thus the business has no immediate control over

them. Therefore policies, practises and regulations need to be put in place to control or minimise

the effect of external factors. These external factors can be divided into 2 groups;

1. External factors which effect our business’s legal liabilities

a. Political

b. Legal

2. External factors which influence/deter potential consumers from buying our products

a. Economic

b. Social

c. Motivational

d. Seasonal

There are currently no political factors that will affect our business, however some legal factors

include copyright violation on some of our Plushie products (Game boy and Pac man as they

were originally invented by other companies). This will be solved by paying royalties to the

desired companies or alternatively inventing our own ideas for Plushies. Also the Trade Practises

Act 1974 deals with the regulating advertisement as to not mislead customers about our products

or business.

We have assessed and determined main factors that stimulate and influence our potential

customers buying patterns are economic, social, motivational and seasonal factors. Economic

factors include our potential customers’ income which can be measured in 3 different ways; gross

income, net or disposable income and discretionary income. Our business will have to review and

access our potential customers’ income in order to ensure our products are at reasonable prices August 2010 The Small Business Plan for Made for Mizzi


business studies text book p171

otherwise our products will be avoided. Inflation which is linked to the global economic stability

also affects customers’ confidence when buying products especially shopping products. Inflation

also has the potential to affect our business by causing product prices to rise from our wholesaler

meaning we would have to raise our prices as well. This may sit unfavourably with our Australian

customers, as our overseas suppliers may be hit harder by the GFC than Australians, resulting in

an imbalance of trading. Social factors for business include consumers; age, class, gender,

culture, family and ethnicity. In section 4.4.2, we have identified and assessed which social

market we are aiming our product at. However within our social market the latest trends, fashion

and technology are forever changing therefore our business will periodically assess our products

and there potential to continue to succeed in the specified target market. By doing this we will

ensure that our business continues to stay in touch with our customers and provide them with

products that will continue to appeal to them. In regard to technological advancement, it has been

noted that this will definitely affect our business because of

‘Apples’ progression to making more effective IPod for their consumers, they also seem to slightly

change its shape and/or dimensions. This affects our business as we sell IPod cases and

therefore some stock may become out of date with new IPod releases. This will be managed by

assessing when to change our products to suit the majority of people who buy from us.

The business’s strategy to access the target market includes continually conducting an in-depth

analysis of consumer’s current ‘wants’ and assisting to turn them into ‘needs’ through increasing

the businesses reputation. They will be approached externally through communications

(advertisements – magazines, television, radio, events etc), there positioning assists in

developing a positive customer perception of the business in respect to the needs of the target

market. The positioning strategy is to increase business reputation to become a well – known and

popular brand that leads to consumers to “impulse buy” and creates consumer loyalty.

4.4. Market Research

Market Research is one vital component in establishing a business; it can determine the success

or failure of a business before any considerable amount of money is spent on its establishment.

Market research can be conducted using 2 methods; Primary and secondary research. Primary

research involves more tailored research than secondary research as it is usually conducted by

the business to potential consumers. Secondary research is collecting relevant information which

has been published by other organisations, bureaus or business’s. (All Business, 2010)

4.4.1 What Research have you done to investigate the following?

Made for Mizzi will use both types of market research to conclude if our business has a chance at

establishing and staying established in the retail sector. To ensure the accuracy of our marketing

strategy, we have undertaken various primary market research, including surveying high school

students aged 13 – 17 on which products they would most likely buy, the price expectancy and



http://www.allbusiness.com/marketing/market-research/1310-1.html

the types of iPods they own. (a copy of the survey can be found in the appendix). Before we

started our trial run of our business ‘Made for Mizzi’ we surveyed students attending Cairns State

High School, to find out which products attract what type of market segment.

4.4.2 Business Environment

The results concluded from our market research can be seen clearly in the graph below (figure 5

& 6); Figure 5: Junior Market Segment Figure 6: Senior Market Segment

We can see that in the junior segment of the school IPod cases were favourable amongst both

girls and boys this was also reflected in the senior segment of the school. Comparing both girls

and boy across both senior and junior segments, our keying and eraser products were more

favourable amongst girls than boys.

Therefore we concluded that our target market will mostly be girls between the ages of 13 – 18.

By targeting a specific market allows us to plan an effective marketing strategy.


4.4.3 Who are my potential customers?Potential customers are those who can be identified as most likely to buy products of a business.

As stated above, from our market research we concluded that girl’s aged13 – 18 were most likely

to be our potential customers. However our target market also includes boys aged between the

same ages because of our IPod cases which proved to be successful both in the market research

survey (figure ?) and from our sales in the trial period of our business (figure ? – page ??). Our

potential customers will play a much greater role than purely being customers within our

business, they will also provide us with feedback about our products, pricing and overall business

to help in the decision making process of our business. This will be undertaken to help our

business make correct decisions to suit our customer base.

4.4.4 What do I know about my competitor activity?Our major competitors include most merchandising businesses at enterprise, such as Quirky

Tools. Externally our major competitors include larger retail stores which already sell similar

products such as IPods and Plushies, these retail stores would include stores like target, Smiggle

and Big W. Our competitors offer a wide range of products at financially conscious price. This is

one of the key advantages our competitors have over our company. As their large product range

allows them to draw a larger range of customers while satisfying our target markets wants (it

contradicts the organised straight forward of office and school work by offering a unique and

attractive statement). Other key strengths they show are they are a well established business.

However their strength of being a large established business can also be seen as a weakness

compared to ‘Made for Mizzi’. As we perceive this as their business would be unable to connect

to their customers on a personal level as other small business’s can. We plan to compete against

their strengths and capitalise on their weaknesses by marketing our products at a lower cost and

adding a community feel to our business. By maintaining a small business we are able to analyse

their strengths and maintain flexibility in decision-making, therefore improving our bottom line. By

effectively position the business as more than just a place to buy products but to create a

community through our online website. Our business will also focus on giving back to our

customers through helping the environment and other community work.

4.5 Market Segments

4.5.1 Describe the different groups of customers (segments) that make up your total market:

Customer segmentation is dividing up groups of customers into segments in order to find links or

connections that may influence them in buying products. Segmenting can be done through either

age, gender, class, interest or other factors which can split up customers into different groups.

Targeting a specific market segment allows us to plan and execute an effective marketing

strategy.


The main groups we can see buying our products at our trial run were junior boys ( 13 – 15),

senior boys (16 – 18), junior girls (13 – 15), senior girls (16 – 18). Another group we can add is

the caregivers/parents of our market groups. (Refer to figure 7 and 8)

4.5.2 Now you have identified who you want to sell to, what do those customers look like?

Identifying the likes, dislikes and activities of the particular market segment which the business

wants to target it more effectively. Most of our identified potential customers were teenagers aged

between 13 -18, generally they travel by bus and/or walk. As most would be unable to drive cars

yet (with the exception of some of the senior market). This means that it would be smart to locate

our shop within shopping centres, as this is a likely place for our target market to shop at.

Our consumers also play a vital role in the decision making process of our business,

therefore it is crucial to properly reach and successfully serve our identified target market. Our

products are aimed for a relatively niche market (a small market segment who will be attracted to

our products because of its speciality or uniqueness), selling predominately to the younger

generation who still attend school or tertiary studies and who have a disposable income. They

also have plenty of technology at their disposal as well as the ability to “impulse buy” (buying with

out reflection).

Customer profile:- Existing and Potential:

Customer profiles describe the demographic, characteristics, buying patterns and other relevant

information to create a stereotypical model for the majority of our customers. This is important to

ensure we have the right products, correct location and price to suit our target market. From data

collected through our market research and trial run of the business, we have identified our

customer profile as being made up of both genders, between the ages of 13 to 18. 13 to 15 year

olds generally do not have a large disposable income compared to the higher age bracket of 16

to 18 year olds who usually have part time jobs or are in a full time job. Their images are diverse

but they all want to achieve one thing, individuality. Their buying patterns can change rapidly

depending on what the latest trends are. Potentially we could expand our customer profile to a August 2010 The Small Business Plan for Made for Mizzi

Market Segnments of 'Made for Mizzi'

Senior Girls (16 - 18)23%

Junior Girls (13 - 15)46%

Senior Boys (16 - 18)8%

Junior Boys (13 - 15)23%

Figure7 - Market Segment of 'Made for Mizzi' for trial

Market Segments of 'Made for Mizzi' for future business

Senior Girls (16 - 18) 19%

Junior Girls (13 - 15) 39%

Senior Boys (16 - 18) 6%

Junior Boys (13 - 15) 19%

Adults (18+) 17%

Figure 8 - Market Segment of 'Made for Mizzi' for future

larger customer base with the inclusion of over 18’s this could be easily achieved by making our

business appeal more sophisticated to an adult market while still maintaining the quirky, bright

style which attracts the teenage market.

The target market is also highly unpredictable. This younger generation’s wants are continually

changing, therefore trends that may be popular one day, might not be the next. ‘Made for Mizzi’

must continually conduct market research in order to gain a more in-depth and up-to-date

understanding of consumer behaviour.

Target Market, Market Size, Expected Growth Rates Over Short Term & Long Term Periods

Targeting a specific market allows the business to plan and execute and effective marketing

strategy as such for the short term we will be targeting the development of Made for Mizzi through

the consumer market (advertising, exposure, consumer analysis) as profitability and turn over will

determine whether or not the business is able to continue.

Focusing on a target market is important for a business to maximize marketing goals. Once the

target market has been decided on it must be made to clear to them that the business is targeting

their specific segment, our target market is teenagers. This target market is one of the largest

growing markets of today’s consumer markets and is a very competitive one. According to

Media Awareness Network, advertisement costs to children’s market segments have increased in

the last decade from $100 million in 1990 to more than $2 billion in 2000. Initially, our target

market will be aimed at the local area however depending on success the business will branch

out into other locations attracting new target segments (online, national, international).


According to the ABS, the Australian Bureau of Statistics (whose purpose is to provide the public

with national statistics) there is 2.7 million teenagers in Australia and they make up 12.3% of the

national market. Of this, 70 to 80% have computer and internet access therefore E-business is a

continual method of selling products. Furthermore half a million Australian teenagers own a

portable music device and world wide 100 million iPods have been sold since ‘Apple’ (the

company which produces iPods) commenced. This data shows the immensity of our potential

consumer base and shows opportunities for global expansion.

5. COMPETITIVE ANALYSIS

5.1 SWOT Analysis on your Competitors:

5.1.1. Strengths

Strengths our competitors show over our small business is that they are;

Well established within the local and national community

Highly profitable

Able to afford more on advertisements and product development

Mass production = cheaper products

5.1.2. Weaknesses

Our competitors weaknesses include;

limited customer relationship with business because of large business size

reputation is harder to change (too well established within the community)

decision making process is slower and more technical with a larger hierarchy (most stores cannot

make decision of what they sell – owners/franchiser makes it for them)

5.1.3 Opportunities

Similar to our business, our competitors are also able to gain on opportunities to support their

organisation against new competitors like our business ‘Made for Mizzi’, we have accessed their

main opportunity over our business is they are able to gain large amounts of finances easily to

quickly respond to competitors (like Made for Mizzi).

5.1.4 Threats

Accessing our competitors threats we found that there main threats were because they are apart

of a larger organisation, if finances dramatically affect another business, it will affect them as well.

An example would be the Coles group, if Target were to make a significant loss it could end up

affecting all businesses within the Coles group.

5.2 Competitive Advantage


IMS, 08/09/10,

reference


referencehttp://www.google.com.au/search?hl=en&&sa=X&ei=m_CETPDwCIiSuwO204y6BA&ved=0CBMQBSgA&q=australia+bureau+of+statistics&spell=1

Competitive advantage is the factors which make our business more appealing to our consumers

over a direct competitor. ‘Made for Mizzi’ believes our strong belief in communication, whether it is

between employee and employer, or between business and consumer. By utilising customer

involvement (knowing what they want, when they want) it could decrease the risk of overstocking

and allow the business to accurately plan for a successful future.

5.3 Intellectual Property

Intellectual property can take many forms, it can be an idea, an invention, a brand, but overall it is

the property invented by a person. Intellectual property is very important in business as it is what

sets them apart from competitors, therefore businesses should go to great lengths to ensure

competitors can not copy their intellectual property. (WIPO, 2010)

Currently, only the business name and the design of key rings will have to be registered (if

they are copied designs such as pacman ©). However this will have to be analysed further when

the business is established and when changes in product design occur. If we decide to produce

our own iPod cases – the trademarks, designs and brandings will need to be copyrighted to the

‘Made for Mizzi’ organisation.

6. MARKETING PLAN - Selling Your Product/Service

6.1 Goals and objectives:

The goals and objectives of our marketing strategy are to reach as many potential customers as

we can. Through marketing we want to achieve the goal of understanding our customers and their

role in the decision making process is crucial to properly reaching and successfully serving our

identified target.

6.2 Overview of marketing strategies:



http://www.wipo.int/about-ip/en/

Our strategy to access and be successful in our target market includes pages on popular

networking sites such as Face book. We will create advertisements not only for Television but

also adds on the popular video sharing site You Tube. This now features more opportunities for

better advertisement to reach our desired target market than ever before. Our advertising strategy

for posters supports the desired positioning of our business by being big, bold and unique to

catch people’s attention. By putting pictures of our products around our business name we are

visually communicating to our potential customers what our business is about. We focused ore on

visual communication rather than text (with posters) to communicate our products quicker with

our target market. This method was strategically put in place so our message is delivered simply

to attract customers to look and to receive the message from our business quickly as opposed to

the surrounding business posters. Sales promotion methods will also be utilized (discount days,

promotional coupons, contests, free products etc). Another important marketing strategy is

building a positive public image. We hope to achieve this by doing our best to be eco – friendly

and supporting/promoting environment awareness with our business. Other strategies include

being fair to customers by implementing a fair return policy this will build a good name for our

business also. As well as maintain a good PR, PR refers to Public Relations. This is the process

of establishing and maintaining a good relationship with customers, business to do this to get a

good reputation from customers and potential customers which creates a relationship between

the two parties. (Wikipedia, 2010)

6.3 Product: (physical good or service)

The concept of a product can be found in section 4.1.

The products that our business will offer include; IPod Cases, Plushie key rings and Japanese

style erasers. Our products are unique because most can not be found in other stores in our

location (Cairns). The demand for our product can be classed as high. This was indicated to us

during our trail run of the business at Cairns High enterprise week, as our business received the

most amount of profits in the marketing sector. (see figure 9/10). Our products are superior to that

of our competitors due to our unique selling propositions. We strive to find products to order for

our shop which can not be found in other stores by outsourcing iPod cases from overseas sellers

to collect a range of cases which are unique to our customers. Some products are handmade and

designed by us (‘Made for Mizzi’ business) this creates unique products which can not be sought

else where by consumers. This gives us a competitive edge over other companies as they can

not replica our products.



http://en.wikipedia.org/wiki/Public_relations

Figure 10 – Some of our products

Figure 9 - Made for Mizzi position in Market Segmentation for trial run

Additional features to the product itself include quality, accessories, installation, instructions,

warranty, packaging and branding. The quality refers to how reliable our products were, from

customer feed back it was determined that our products were of a satisfactory at our trial run of

the business. This result was to be expected as they were made as more of an experimentation

for the trial run. However once we open our business quality levels will improve dramatically

mainly due to improved operations management. Warranties can not be put in place for our

products as they are all under $20. However fair refund options for

faulty products will be put in place. (E.g. Bring back product within 30

days for full refund or replacement if found to be faulty as a result of the

manufacture.) In our business we have 3 different product lines, one for

each different product; IPod cases, Key rings and erasers. Each product

line also has a different importing method; for the IPod cases and

erasers we are importing from EBay, however for the key ring Plushies

materials will be outsourced from fabric stores such as spot light, with the materials we will then

hand make them into the desired product. Packaging is the final concept the product we have to

deal with. Packaging needs to keep the product safe, identify the business, contain the product

and are appealing to customers. We have made our packaging which features our branding name

with a message ‘Thanks for shopping at Mizzi’ (figure 11). This shows our customers we

appreciate doing business with them and makes our packaging, business and product appealing.

6.4 Place: (reaching the target market):

Place for a business can refer to where products are sold and stored but also where

manufacturing takes place (AudioEnglish.net, 2006). As our business will be manufacturing our

own products this will have to be considered as the business grows, however for now our

production levels are low therefore they can be done on site.

Ensuring the business is located within an appropriate location to attract the target market is

crucial for a businesses success (figure 12). During our trial run of our business we were placed


Figure 11 - packaging

Market Segmentation (Merchandising Businesses)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

Merchandising Businesses

Series1

Series2

Series3

Series4

Series5

Series6

Made for Mizzi

Series8

Series9

Series10

Series11

Series12

next to a food store, in ways this both benefited and threatened our business. We found that

because enterprise week ran during lunch people were more interested to spend their money on

food than products. However it also was a plus as the food store would attract customers who

had extra money would then wander to our store after purchasing food.

HALLBULL RIDE

O R

T EH TE AR I LF O SO TD OR& ESFOOD STALLMADE FOR MIZZI

ENTRANCE

Figure 12 Basic outline of the positioning of Made for Mizzi at enterprise week

When establishing our business in the local Cairns CBD we will consider as mentioned above

that most of our identified target market is not independent and therefore relies on transportation

by carers or public transport therefore the best place to operate our business for convince for our

target market would be in a shopping centre. The three main shopping centres located in Cairns

are Central (B) and Stocklands (C) and the most recent Cairns Square (A) (figure 13)

Figure 13 – 3 possible locations for the business in Cairns

Through research into these shopping centres we concluded that the best place to start our

business would be in the newly awaited shopping centre, Cairns Square. It is a more appealing August 2010 The Small Business Plan for Made for Mizzi

place to our target market as it is fresh and exciting which would mean our business would have

a head start in attracting customers as they would already be interested in seeing the new

building open in Cairns. It is also much cheaper than renting in Cairns Central which would save

us renting costs and improve our profitability, while positioning our business in a location likely to

attract our target market.

Our strategy is to get the most market exposure possible, we will ensure this by surveying

our target market and researching how to best target our group. Already we know that social

networking sites are going to be the best way to get the maximum possible market exposure,

other sites include Youtube and advertising on TV.

We will start off with one small business in the cairns CBD area and then grow the

business in other small towns in Queensland, before expanding nationally across Australia. Our

storing costs will be relatively low as our products are quite small. Stock ordering equations and

computer programs will be used to make sure we have the right amount of stock at the right time.

Not only will this reduce our already minimal storing costs but also improve customer satisfaction.

6.5 Pricing:

Pricing is an important part of the marketing mix as it affects the amount of revenue and can

impact on other aspects of the business as it will ultimately determine how much money can be

spent on other aspects of the business. To ensure the correct price is calculated there are a few

methods business’s can consider;

Cost Plus Pricing: This is the most simplest method where the businesses determines

product cost by adding production cost plus and a desired profit margin (profit margin: the

ratio gross profits divided by net sales)

Target Return Pricing: Making price decisions based solely on the capital objective

Value – Based Pricing: Basing the price on the value of the product to the customer in

comparison to alternative products

Physiological Pricing: Pricing is based on the quality, competitor’s prices and fair value

from the view of the customer. (NetMBA, 2010)


IMS, 07/09/10,

http://www.netmba.com/marketing/pricing/

6.6 Objectives, flexibility, discounts, allowances

Our business used a combination of cost plus pricing and physiological pricing in order to

determine the prices for our products. Physiological pricing was worked out by interview potential

customers on their idea of a ‘suitable’ price for our products. With this information in mind we will

also calculate how much we need to break even and to make a suitable profit also known as cost

plus pricing. Cost plus pricing is important for the continuation and expansion of our business. We

believe this will be an effective strategy as we will ensure we are selling our product at the right

price to break even and to make a profit but also because we are including our customers on

business decisions it will make them feel apart of the decision making process and perhaps

ensure more loyalty and satisfaction from our customers. Relative to our competition, our pricing

strategy is to hold stock which does not cost much to import or make to sell at the lowest possible

price to give us the highest possible revenue. To have a competitive edge over competitors with

pricing and to also maintain and grow our business with revenue. When determining prices we

also realised that we have to have flexibility products price to change for its stages through its life

cycle and for discounts and promotions. Discounts and allowances will be used in the events of

sale promotions this is discussed in section 6.2 of this report.

6.7 Promotion:

Activities undertaken by the business to familiarise and advertise products is known as

promotion. Promotion differs from advertising as it is the broader term to include all activates to

make a product known (About.com, 2010).

There are different promotion methods which can be undertaken by our business, we plan to

advertise our products to our target market where they are most likely to communicate to them.

Since the majority of our target market is teenagers, this would be through social networking sites

and our business website as well. We will be reluctant to use direct mal to communicate to our

customers about our products, instead seasonal emails will be sent to clients who sign up through

our website. Direct emailing option will be effective because our target market (teenagers) are

easier to communicate through email than sending catalogues through mail. It also saves us

money in postage and allows us to easily communicate to consumers/potential consumers about

our products seasonally. Emailing options will also be used to promote and advertise our

promotional packages. We will be using a direct e-mail option over mailing as it will be more

effective because our target market (teenagers) are easier to communicate through email as

most 13 – 18 year olds are more likely to have an email account belonging to them rather than a

mailing address.

It is important as a business to develop a positive public image. We hope to achieve this by

creating a fund that assists the community (schools). There are many options such as providing

gift vouchers for events and prizes – and it will help to convince younger generations of ‘Made for


IMS, 07/09/10,

http://sbinfocanada.about.com/cs/marketing/g/promotion.htm

Mizzi’s’ community awareness (increase in consumer loyalty). This is the most effective method

to build a positive image for our business and by continually be involved with our target market,

we are able to regularly conduct market research and gain a competitive advantage (contributing

to bottom line).

To minimise and avoid any potentially harmful Public relations (explained in 6.2) and media

attention, ‘Made for Mizzi’ will acknowledge and address any faults and continually try to improve

them (upstanding moral values – environmentally friendly etc.), therefore increasing the branding

and reputation of the organisation.

6.8 Trading Hours

Suitable trading hours for the business would be 9 – 5 during the week, 8 – 3 on Saturdays and

closed on Sundays. At this current time ‘Made for Mizzi’ is run by the 3 owners in every aspect, no

other employees belong to the business, however in the event of expansion sales staff will be

employed to run other stores, in this event trading hours may be expanded.

6.9 Comment on other factors regarding your marketing strategies

To attract more customers as mentioned in 6.2 coupons, discount days and free products will be

some one – off promotions to build a name for our business. A more long – term promotional

technique we will implement are loyalty cards to customers.

These options are the most effective sales promotions as the consumer is seeing that they are

getting something that would generally be sold at a lot higher price (they are bargaining from our

business). However loyalty cards will be mostly focused no in our business as it not only helps

sales promotions but connects the consumer to the business, therefore creating loyalty and trust

between the customer and our business.

Other promotional efforts include our plan for a website which includes a forum for

consumers to connect with other consumers, creating a ‘Made for Mizzi’ community, The website

will also contain the sign up for seasonal emails which will include promotion offers while also

offering the availability of ordering products online. Online consumers generally fit this younger

age category as they are more ‘techno-savvy’. Therefore online marketing will increase consumer

exposure. The website will be developed, maintained and managed by a web design company.

6.10 Export Intentions

If products are produced within Australia (see long term plan), then it also has the potential to

attract international consumers with similar characteristics to our target market. Products will be

exposed through the website and reputation (word-of-mouth).


E-business would also be a good option for made for Mizzi, as it would reduce running costs and

increase market exposure. This option would be the most viable depending on the amount and

types of products we would sell. Partnering with another organisation would be another viable

option.

7. OPERATIONAL PLAN

The following will discuss various aspects of the operations of ‘Made for Mizzi’, including its

physical aspects, lease terms, plant and equipment, materials, labour, technology and

environmental concerns. An operational plan describes short and long-term methods of

achieving milestones and explains how, or what portion of, a strategic plan will be put into

operation during a given operational period [1].

The various aspects of Made for Mizzi’s operation plan have been analysed in accordance to the

retail industry sector, as seen in appendix.

7.1 Premises & Capital

A premise is necessary for a traditional business to sell its products – and they take a very large

portion of operations costs (figure 14). Premises costs are entirely dependent on its popularity.

For example a shopping centre shop front is much more expensive that a shop front on a street

as increased exposure is gained inside a shopping centre and therefore consumers are more

likely to purchase.

The Retail and Commercial Leases Act 1995 specifies obligations relating to leases over

business premises at which goods or services are sold or provided to the public where the rent is

below $250,000 a year.

The Act covers issues such as:

ensuring that the premises are structurally suitable for the intended business purpose ensuring that the lease is available in written form when the lease comes into effect reviews of current market rent maintenance costs.

In addition to rent, the tenant usually pays for council rates, water rates, building insurance, public

risk insurance, plate glass insurance, stamp duty and half the cost of preparing the lease

documents.

Figure 14 – Future approximate

operating costs


Operating Costs (Future Approximate) with respect to Lease (%)

Operating Costs

Lease

Other costs


REFERENCE?

http://www.legislation.sa.gov.au/LZ/C/A/RETAIL%20AND%20COMMERCIAL%20LEASES%20ACT%201995.aspx

Initial capital (funding) is required to purchase stock and run an organisation. It can be gained

from the owners’ assets or the majority of large banks in the form of a ‘small business loan’.

However the majority of the costs can be covered initially with a combination of our personal

finances.

Risks to our business include;

- loss of staff (ability to effectively run organisation is decreased)

- decrease in disposable income (decrease in sales, cannot afford running costs)

- increased competition (loss of consumers and sales)

Prevention methods to put in place to minimise these risks are;

- effective communication (‘open-door’ policy)

- continual, in-depth market research

- updating products and methods of exposure

Equipment

Equipment required initially required for our business includes;

- sewing machines

- sewing equipment

- shop front & electricity

- working room (manufacturing)

- display equipment

- register

- storage facilities

As the business expands further required equipment will be dealt with as the business becomes

more established.


7.2 Additional Costs

Storage

Storage is required to safely maintain products in the transition process from supplier to

consumer. This has the potential to occur extra costs, therefore initially storage will be at the

premises of the business. However as the business grows a warehouse may be required for

holding stock. The main aim for initial set up is to minimise storage costs as we expand inventory

management system will be implemented to reduce these extra costs.

Leasing/Purchasing

To operate a business legally one needs to meet all the laws for operating a business [2]. These

include:

Australian Business Number

Contracts – lease, employees etc

Compliance with Australian Taxation Office and Australian Securities and Investments

Commission.

Compliance with The Australian Competition and Consumer Commission (ACCC) promotes

competition and fair trade for consumers, businesses and the community. It also regulates

national infrastructure services [3].

Some of the legal and political factors that can affect ‘Made for Mizzi’ include copyright

infringements. Therefore ‘Made for Mizzi’ will require permits to recreate these caricatures

(pacman, ghosts) and would probably be required to pay royalties (a percentage of profit). If this

is not strictly followed, the business could face legal issues and infringements.

Another issue is the reliability of overseas suppliers as they are less predictable and cannot be

monitored – therefore an increased level of financial risk (legal contract is required).

Additional costs will be incurred through business and stock insurance, taxation and the good and

services tax (AUS = 10%).

7.3 Human Resource Management

Human Resource Management is the management of the employee relationship it covers

establishing, maintaining and terminating employment. The function of HRM involves planning,

organising, leading and controlling the needs of an organisation.

The organisational structure of our business is equally contributed to by all three owners –

reinforces our strong belief in communication and cooperation. By sharing ideas and the

workload, a more successful organisation will result.


IMS, 06/09/10,

reference text book.


reference


REFERENCE

How Many Staff

Staff numbers will be determined as the business grows. However for the moment, in regards to

the size of the business it is manageable by the 3 owners.

Job Description

To ensure future employees understand this organisational structure, we will designate each

employee to a specific sector. There they would typically undertake training sessions where

initiation would occur (values, goals, expectations, job requirements etc). Continual

communication between employees and employers would help to ensure a better overall

understanding of our business concept and what we are striving to achieve.

Job Skills Required

Initially, no employees will be hired, however as time passes – the possibility will occur. The

majority of assistance required would be in the production sector (key rings). This requires

specially skilled employees, however, the type of employment (dull-time, part-time) they would

receive would depend entirely on product demand (lower demand = lower employment numbers).

In the future, if the business is a success – extra assistance in the financial and marketing side

will be required. Also necessary for an online business is an IT expert – able to create and

efficiently run an online website.

Recruitment

Recruitment will be organised through advertisement – internally or with a recruitment agency. All

applicants would be properly processed and interviewed and a decision would be made.

Training and Development

Our plans for employee training and development include the majority of ‘on-site’ training so that

they are able to learn the functions of our business firsthand (increased understanding). However,

the majority of employees would be required to have previous knowledge or skills within the

industry. Another viable option could be to hire junior casual workers – then we have the target

market (teenagers) working for us and we are able to continually conduct research (informers).

Wages and Overheads

Wages would be paid according to the Queensland government wages (retail sector) information.

Depending on type, legal advice would be taken to construct the contract.

In order to recognise and reward high performing staff, we will provide a reward scheme for sales

employees who reach sales targets – increase in pay/wages, commission, promotion, smaller

incentives such as vouchers and gift cards.


In regards to workforce, we plan on having a flexible workforce, where employees are multi-

skilled and are able to work in a broad range of environments – with limited to no supervision.

This ideal employee would be an asset to the organisation as it would create a flexible employee

who is able to work in an part of the business when needed – it will enlarge the business’s

capabilities.

Workplace health and safety will be followed and maintained through regular inspection and

updating of new legislation.

7.4 Policies and Procedures Manual

New projects will be entirely dependent on the business’s realistic capabilities and the results

from an in-depth market research report – predicting the success of a future project. Future

trends and growth will be assessed as well as profitability and probable outcomes. Only after an

analysis will the requirement for additional employees be taken into consideration.

In regards to having automation in our manufacturing processes, we have decided to use

machines for production of key rings. In the future iPod cases may also be manufactured and

online orders could possibly be processed using an automated system. Decisions are based on

time efficiency, therefore using automation depends on saving of finances (increase in staff =

increase in pay/costs).

In relation to quality management, we will aim to continually analyse products and update and

improve employee skills, therefore minimising faulty product and maximising quality. Quality

control is the process for controlling the quality of a good during its production or delivery. By

combining knowledge and gaining external assistance, full production capacity can be achieved.

Outsourcing (allocating work to independent contractors overseas) will be considered but

dependent on:

- cost effectiveness (local vs. overseas)

- reputation of business (seen as local and environmentally friendly)

- risks involved

The inventory management system will be primarily based on the JIT (just in time) principle,

where products are produced and distributed as they are required – thus saving on storage and

maintenance costs and decreasing risk of over-capitalisation. Also utilised will be the indicators

for future stock levels (based on demand and popular trends), therefore allowing the business to

prepare and have enough stock to provide consumers.


IMS, 06/09/10,

Text bookCAHP 5

For loyalty programs for consumers (see 6.9)

Competitive Priorities:

- increase in reputation

- enlargement of customer base

- creation of a well-known brand that is chosen by consumers over competitors

Process Strategies:

- increased exposure in concentrated target market area (shopping centres)

- continual promotion (music events, television etc)

- community involvement

Research and Development will also be undertaken in both the short and long term as it is

essential to the survival of an organisation. In terms of customer involvement, listening to the

consumer is important. Popular trends can be determined simple by adhering to the target

market. Therefore consumers are involved to an extent where they influence the types of

products that are produced. Some difficulties with this include the continual and overly drastic

altering of popular products. There are many ‘niches’ within the teenage market, therefore each

demands a different product – too broad a range. Providing this broad data also provides invalid

or non-viable options, leading to confusion within the organisation.

The merchandise industry may be exposed to future trends which include production costs. It

may be more effective to purchase raw materials elsewhere, or to outsource manufacturing.

Another option is machinery for mass production which would incur transport costs. The future of

importing goods is not stable due to increases in fuel costs. These travel expenses will have to be

taken into account as goods will become either more expensive to import or cheaper to produce

locally.


8. FINANCIAL PLAN -Your Investment & Expected Turnover & Profit - CHAN

8.1 Lists establishment costs and minimum sales level; profit and cash flow projections and projected balance sheet and funding arrangements including sources of funds.

Finance is ultimately up to the finance department to access the viability of a project and its ability

to achieve the objectives of the business. A sound financial strategy required the manager to

make decisions about the types of finance. The wrong types of finance can be very costly to the

business, while a poor finance strategy can result in over- or under-capitalisation.

Establishment cost

The first task for a new business is to work out how much money is need to start the business,

and whether the funds and saving is sufficient or need to obtain finance. The type of start up cost

will differ depending on the type of business, such as the cost of starting a new business is

different to buying an existing business or buy a franchise. As “Made for Mizzi” is a school project

and is running under the school environment, therefore there are no start-up cost and extra fees

charged. However, some expenses will incur when running the business. For example, expenses

such as legal, accounting or consulting fees will not occur because once again, this is a school

project and the business is only running for three days. However other expenses such as

inventories expense will incur when purchasing goods for the business. The three tables and

calculations below show the quantity, the original cost per unit and the approximate cost to start

up the business.

Total cost of expenses = iPod Touch cases + iPod Nano cases + Kawaii erasers + key rings= $66.78 + $14.37 + $17.53 + $17= $115.68

(see Appendix 3)

Based on the calculation, the business needs approximately $120 of capital of start up the business (at present).

The table below represents the sale of the products in different grouping.

ProductsRevenue

iPod cases 170

Kawaii erasers 20

Key rings 21.5

Total 211.5


Calculating Gross Profit Margin %

Gross profit is the difference between sales and the cost of producing or purchasing products or

providing services before subtracting operating expenses such as wages, rent, accounting fees or

electricity. Gross profit reflects on how efficiently labour and materials are used to produce goods.

For a retail business, cost of goods sold including the cost of buying stock for resale and freight

inwards. Gross profit can be found with the following formula:

Gross Profit = sales – costs of goods sold.

Gross profit margin is the financial health of a business during the production process. The gross

profit represents the percentage of revenue/sales left over after subtracting the cost of goods

sold. A company with a higher gross profit margin than the industry standard is more efficient, as

it’s retain more of each dollar of sales for other expenses and net profit.

Gross Profit Margin for iPod cases = (Gross profit/Revenue) X 100

= ($170 – $70.05/$170) X 100

= 0.5879 x 100

= 59%

Gross Profit Margin for kawaii erasers = (Gross profit/Revenue) X 100 = (($20 – $12.53)/$20) X 100

= 0.3735 x 100

= 37%

Gross Profit Margin for key rings = ( Gross profit/Revenue) X100

= (($21.5 – $17)/$21.5) X 100

= 0.209302 x 100

= 21%

Overall Gross Profit Margin = (($211.5 – $115.68)/ $211.5) X 100

= 0.453049

= 45%

Net Profit Margin %

Net profit or net income is calculated by subtracting expenses from the gross profit and show

what the business has earned (or lost) in a given period of time after both cost of goods sold and

operating expenses have been taken into account. Net profit can be express in the formula

below:

Net Profit = Gross Profit – Expenses


Net profit margin percentage tells the company how much profit is made for every dollar it

generates in revenue or sales that is left after all expense have been paid, and remains as net

profit. Net profit is used to pay for interest, tax and distribution to the owner. The higher a

company’s profit margin compares a competitor, the better. The net profit margin ratio is

expressed in the following formula:

Net Profit Margin % = (Net profit/Sales) X 100

In this situation, the net profit margin ratio and net gross profit ratio will be there same because

this is a project running in the school environment; there are no expenses such as tax or interest.

Therefore the net profit margin in percentage for iPod cases is 59%, kawaii erasers are 37% and

the key rings is 21%.

Break-Even Point

Break-even point is when the amount of total sales is equal to the total costs. It is a volume of

sales that needed to cover the cost with no profit or loss is made. At the break-even point the

profit will be zero. The break-even point is very useful as it helps to determine the profitability of

the present product line, what the effect on profitability will be if overhead expenses increase, and

how much more has to be sold at the current price level to make up for an increase in cost of

sales.

Overhead is an expense is an indirect manufacturing cost that is not associated with direct

materials or direct labour. There are three general kinds of costs: indirect labour, indirect

materials and all other miscellaneous production expenses such as taxes and insurance.

Overhead expenses are part of the total costs of maintaining and staffing a business.


Break-even point = Total overheads/ Gross Profit Margin

Breakeven point of iPod cases = $81.15/ 59%

= $137.54

Breakeven point of kawaii erasers = $17.53/ 37%

= $47.35

Breakeven point of key rings = $17/21%

= $80.95

Breakeven point of the business = $115.68/ 45%

= $257.07

Price is what is charged by the supplier to the consumer and it is one the most important aspects

of the marking mix. Price often impact on the amount of revenue gained from the sale of price

sensitive products or services, and may therefore directly impact on the ultimate survival of the

business The pricing strategy consists of setting an initial price for the products, and then takes

detailed records of how the product performs at the given price, and reprices the product base on

the results. If higher profit is made, the selling price should either stay the same or increase. If

lower profit is made then obviously the selling price needs to be decrease.

ProductsOriginal Price ($)

Selling price ($)

IPod touch soft silicon case 3.79 10IPod touch hard case 7.6 20IPod touch case with purple hearts 7.01 20IPod nano angel silicon case 6.17 20Ipod nana sign hard case 8.2 201 set of cookies erasers (6 pieces) 8.77 51 set of cakes erasers (6 pieces) 8.76 5Key rings 1 3.5


During the enterprise week, the prices of the iPod cases remain the same all time. However,

based on the product performance, the price of the kawaii erasers changed from $5.00 each

down to $2.50 (2 erasers for $5.00). Also the price of the key ring changed from $4.00 down to

$3.50. These changes had a great effect on the estimate profit and loss calculation that was

calculated before the enterprise week. In future, these changes need to be to taken into

considerations before making any prices to avoid the loss in business revenue.

FUTURE DATA CALCULATIONS (APPROXIMATE PREDICITONS)


APPENDIX 1 - Operations Planning Checklist


Operations Planning ChecklistManufacturing

Industry

Retail

IndustryService Industry Contracting

Fixed Assets

Location of existing/suitable site

Buildings/ improvements

required

Plant/Equipment required

(Leasing or Purchasing?)

Fixtures/Fittings required

(Leasing or Purchasing?)

*

*

*

*

*

*

*

*

*

*

*

*

*

Inventory

Range of Stock required

Sources(s) of supply

Method & Frequency of

Purchasing

Stock Valuation Method

Storage & Movement of Stock

Storage facilities required

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

Organisation

Floor Plan

Facility Layout

*

*

*

*

*

*

Labour

Manpower needed

Technical know how required

Availability/demand of skilled

labour

Training Required

Wages applicable

Hours of Operation

Shiftwork

Management Control

*

*

*

*

*

*

*

*

*

*

*

*



Industry

Retail

IndustryService Industry Contracting

Production

Method of production

(a) continuous (b) assembly

(c) batch process (d) jobbing

Scheduling of workflow

Manufacture of Sub-contract

decisions

Production lead times

Any bottlenecks expected

Quality control, inspections. Etc

Standards applicable

Maintenance and reliability of

plant/equipment

Delivery and/or distribution

*

*

*

*

*

*

*

*

*

*

*

*

*

*

APPENDIX 2 - Operations Planning Checklist



IndustryRetail Industry Service Industry Contracting

Other Decisions

Office equipment/info. systems

required

Merchandising (shop-front, in

store displays, point-of-sale etc.)

*

*

* * *

External Advisory Bodies

Qld Dept. of Industry

Development

Commonwealth Dept. Of

Industry,

Technology & Commerce

National Industry Extension

Service

(NIES)

Standards Assn. Of Australia

Aust. Organisation for Quality

Control

Australia for Quality

Organisation

Industrial Design Council

Industry Trade Association

Industry Training Committees

Distributors, Agents & Buying

Groups

Professional Consultants

(contacts available through

SBDC)

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*


APPENDIX 3: TABLES OF COST OF GOODS SOLD (DURING ENTERPRISE WEEK)

IPod Touch cases

Product Name Quantity Original Price/Unit Total cost

Red iPod touch silicon evil face case

3 $3.79 $11.37

Green iPod touch silicon evil face case

1 $3.79 $3.79

Green iPod touch silicon happy face case

1 $3.79 $3.79

Black, white and pink iPod touch iPod touch evil face case

3 $3.49 $10.48

Purple iPod touch silicon iPod touch evil face case

1 $3.79 $3.79

Purple iPod touch silicon iPod touch happy face case

1 $3.79 $3.79

Yellow IPod touch silicon iPod touch happy face

2 $3.79 $7.58

Blue iPod touch silicon iPod touch happy face

2 $3.79 $7.58

Rubber hard case iPod touch purple hearts

1 $7.01 $7.01

Signs hard iPod touch case1 $7.60 $7.60

Total 16 $66.78IPod Nano cases

Product Names Quantity Original Price per Unit

Total

Angel Silicon skin case for iPod nano

2 $3.09 $6.17

Signs hard iPod Nano case

1 $8.20 $8.20

Total 3 $14.37


Kawaii Erasers

Product Name Quantity Original Price per Unit Total

1 set of cookies

erasers (6 pieces)

6 $1.46 $8.77

1 set of cakes erasers

(6 pieces)

6 $1.46 $8.77

Total 12 $17.53

Additional expenses: $17 of fabric and materials for making key rings Plushies


References;

(2010). Wikipedia. Mission Statement, [Online] Available at: http://en.wikipedia.org/wiki/Mission_statement. [Accessed on 5/09/2010]

(2010). MacDailyNews, Apple and Mac News [Online] Available at http://macdailynews.com [Accessed on 5/09/2010]

Mylonas, A, Harvey, J & Hodges, J. (2007). Business Organisation and Management for Queensland. 1st ed. Australia: Macmillan Education Australia PTY LTD. [Accessed on 30/08/2010]

(2010). QuickMBA, Business Legal Stuctures [Online] Available at http://www.quickmba.com/law/org/ [Accessed on 4/09/2010]

(2010). Small Business Victoria, [Online] Available at: http://www.business.vic.gov.au/busvicwr/_assets/main/lib60208/sbv_infosheet_cash_flow_break_even.pdf [Accessed on 5/09/2010]

(2001).Weinstein, C, Woodruff, A & Await, C, Becoming a Strategic Learner [Online] Available at: http://www.hhpublishing.com/_onlinecourses/study_strategies/BSL/motivation/E1.html [Accessed on 4/09/2010]

(2008). All Business, Secondary V Primary Research [Online] Available at: http://www.allbusiness.com/marketing/market-research/1310-1.html [Accessed 5/09/2010]

(2009). Australian Bureau of Statistics. Household Use of Information Technology, Australia, 2008-09 .[Online] Available at: http://www.abs.gov.au/ausstats/[email protected]/mf/8146.0 [Accessed 5/09/2010]

(2010). WIPO. What is intellectual property? [Online] Available at: http://www.wipo.int/about-ip/en/ [Accessed 5/09/2010.]

(2010). Wikipedia. Public Relations [Online] Available at: http://en.wikipedia.org/wiki/Public_relations [Accessed 4/09/2010]

(2010). NetMBA, Pricing Strategy [Online] Available at: http://www.netmba.com/marketing/pricing/ [Accessed 4/09/2010]

(2010).About.com, Promotion [Online] Available at: http://sbinfocanada.about.com/cs/marketing/g/promotion.htm [Accessed 4/09/2010]


your business background

Documents

mizzi business plan

business description

small business plan

business summary

similar products

business purchasing

bulk buying products

established customer