Introduction
The following analysis is about Coffee Circus. This new organization intends to introduce its services in the market. The organisation intends to launch its services in Northwest Santa Fe area. The organisation is determined to bring unique services to its customers in the market by proving quality services at affordable prices. Customers will also be provided with a wide range of choice.
Service Description
Coffee Circus is determined to provide quality and comfortable services to its customers. It is also determined to provide its services at reasonable prices. In order to achieve its target, the organization will also be determined to provide a wide variety of choice in order to achieve maximum satisfaction of the customer needs.
Mission Statement
The organization has the mission to provide a comfortable and friendly environment where customers can enjoy quality services and food at low prices.
Target Market
The target market will be individuals between the age bracket 18 to 55 years with average income ranging between $20,000 and $100,000. These will be mostly the white collar workers which include professionals, managers among others. In general, the organisation is targeting individuals who enjoys relaxing atmosphere, talking or playing games.
Marketing Strategy
A market can be viewed as the customers, both existing and potential, who purchases an organization’s goods and services. A critical analysis of customers can help in understanding the market (Timmons, Zacharakis, and Spinelli, 2004). Marketing strategy is of great importance in every organization.
There are several basic things that are necessary for a marketing strategy. First, it must have a detailed explanation of the marketing objective. This will give a critical analysis of the goals that the marketing strategy is aimed at meeting. A marketing strategy must also include the target market or segment as well as the appropriate sections.
This will show the targeted market that is intended to consume the organization’s products. Marketing plan must also contain the sales forecast. This provides important information on the level of sales that should be expected from every market segment. This is necessary in making the necessary aspect in every marketing strategy.
This marketing plan has covered a significant number of the stated aspects. However, the plan has failed to exhaust some important aspects that are necessary for a successful market plan. To start with, this report has satisfied the criteria of projecting on the expected level of sales.
This report clearly generates the goals of the marketing strategy. It intends to achieve monthly sales revenue of about $71, 000 in every month representing 3% of the target market within duration of 18 months. However, the information has just given projections for one and half years. This information is very important as it increases investor confidence.
The report has also clearly given a detailed projection of the sales as well as the expected population that will represent the market share. The report has provided valid evidence of the projections from various statistics. For instance, the report used the Facts Report on national statistics in order to come up the most realistic projections.
It supported the projections with evidence. For instance, it has revealed that many people do not travel very long distances looking for entertainment. Therefore, it will be easier to project the expected number of customers expected in a specific period. The report gives a detailed description of the available information on the distribution of the customers according to education levels and occupation.
Although the report has given clear details about targeted sales, it has given the projection for only 18 months. This represents a projection of only one and a half years. It will be better if the report could have provided a report covering about three years. Such projection will be necessary in making critical decisions in the organization. It will also play an important role in increasing investor’s confidence hence promoting financial stability.
The report suffers from the fact that it failed to analyze the customers’ buying criteria adequately. In order to understand the market, it is necessary to have a thorough research on the buying criteria of the customers. Although the report has given some details on the consumer purchasing patterns, there is still a need for further investigation on consumer purchasing behaviour. For instance, it is necessary to investigate about the tastes and preferences of various groups of customers.
Another shortcoming of the report is that it has failed to give detailed information about how customers switch to different solutions to their unmet needs. This information is very important in a business plan since it provides information on the best ways to capture more customers.
This report has also provided detailed information on the market segmentation. However, I feel that the report does not provide adequate information on the market segmentation. There is need for detailed information about the market segments that covers the organization’s market networks.
One segment of the customers will be individuals who will be visiting to see an entertainer or poetry reading. Another group[ of customers will berk individual who enjoy relaxing and chatting with friends. As already noted, the customers will be professionals, white collar workers among others.
Promoting and Advertisement
This report as well provides clear explanation of the promotion and advertising activities that are necessary in marketing the organization. This will take place in different avenues in order to facilitate the effectiveness of the proposed mechanisms. In its promotion and advertising strategy, the organization will distribute flyers.
The initial flyers will be distributed in the neighbourhood. Ads will be distributed in all the catholic local church in the area. The provision will be that the ads will offer 10% off in case the parishioner brought the bulletin with them. This is expected to be the first union restaurant.
Every person who will be in a position to show his or her union cards will be given a discount. Ads will be placed in strategic points like in areas of Burn’s Grocery as well as the local newspapers. Ads for special entertainment nights, newspapers, and radio ads will also be placed. During the opening night, about 1,200 invitations will be sent.
Menus will also be distributed in the businesses in the area. Customers will have an opportunity to make orders by fax. A customer mailing list will be developed where calendar of events will be mailed on monthly basis.
From my own perspective, the advertisement strategies described in this case are not clear. It is necessary to ensure that the report provides a detailed description of the promotion and advertisement strategies that are feasible with the target markets. This report has failed to provide such details. It is also necessary to provide an estimate on the total amount that will be incurred in meeting these goals.
Operations
According to Baker (2000), it is very important for as business plan to have clear operations strategies for a business to be success. The effectiveness of various operations within an organization can significantly determine the successfulness of an organization.
This report has clearly detailed the goals and operations of the operations activities within the organization. The main goal of the operations as stated is to keep the costs of all goods that are sold to be below 30 per cent. However, the report has failed to demonstrate how this will be realized. There is a need to give a clear description on how this will be realized.
Value Proposition
Value proposition is an important aspect in every business plan (Odgers 2007). According to Young (2007), a good value preposition provides the potential with information that makes them believe that the company offers the best and quality products compared with other organizations.
It also outlines the unique characteristics of the products offered by the organization so that the customers will be in a position to differentiate its products from those offered by its competitors. This report has failed to come up with a clear value proposition to convince the customers on the advantage of choosing the organization’s products.
Plans To Meet the Strategies
In every business activity, it is important to have a clear plan that helps in realizing a proper use of time resources (Abrams and Kleiner 2003). The Plan has clearly explained various strategies that will be implemented in order to realize the organization’s goals. For instance, there will be initial training of the employees in order to ensure that the customers receive quality services.
There will also be implementation of the Business Plan systems. These are some of the strategies that the organization intends implement. However, the plan has failed to give the period through which these strategies will be realized. This poses a major problem because one is not sure what duration each activity will take. Therefore, it will be difficulty to approximate the time when each of the activity will be accomplished.
Financial Analysis
Another shortcoming with this plan lies on the fact that it has failed to provide detailed information on the fact that it has failed to provide an effective risk management procedure. The company is however exposed to various risks, which may make it fail to realize its targets. The plan needs to provide a detailed procedure on how such risks can be mitigated. A detailed risk mitigation procedure is necessary. By considering all the expected emergencies, an organization will be in a position to handle the issues after an unexpected loss.
The plan has a detailed description on the financial projections as well as how the organization intends to remain profitable in its operations. It provides detailed information on financing plan as well as the exit strategy. It has proposed that the organization will require a total of $99, 000. Among this, $10, 000 will be owner’s contribution while the family members will present $16, 100. The organization will also receive a loan of $73, 000 for remodelling, operations, and equipments.
It provides clear information on how the business intends to remain profitable. This is an important aspect in every business plan since it guarantees on the survival of an organization. It guarantees that the organization will be in a position to maintain its financial stability. In addition, it clearly outlines the projections on the initial costs as well as the total expected revenue from sales.
It has clearly indicated the total costs of the equipment that will be incurred in installing the required equipments. Details on the interests that will be paid on the mortgages with a specified period are revealed in the plan. In other words, the plan has clearly given adequate information on what the organization will be incurring in a specified period time. The plan has given a clear distribution of the loan as well as the interests that need to be repaid back.
It has included a detailed income statement. This provides a clear understanding of the possible costs and revenue expected in various transactions. This includes the cost of sales and respective gross profits. The projection covers a period of one year. Armed with such statistic, it will be easier to estimate the profitability of an organization.
The plan however suffers from the fact that it has failed to cover the information about the net profits expected to be generated by the organization. This projection will be of great importance because it represents the real profits that are expected in an organization. In other words, the plan needs to provide convincing evidence that it will be running profits.
The operating costs are also projected to be almost constant. This poses a major problem because organizations can easily have emergency additional expenses. This can lead to a significant deviation in expenses. Therefore, holding the costs almost constant is not realistic.
In every business plan, it is important to ensure that all the projections are realistic. This will determine the effectiveness of the measures taken in realizing these objectives. One of the major shortcomings of this report is based on the fact that the projections do not reflect the strategies or the plans implemented. It is always necessary to ensure that there is harmony between the projections and the strategies applied as the means of realizing these goals.
In financial projection, it is necessary to cover all the appropriate assets and liabilities. This plan suffers from the fact that it has ignored so many assets and liabilities. It has also ignored capitals all of which are important in formulation of strategies. Therefore, the financial projections do not logically represent the results of the strategies.
The Requirement of External Funding
According to the plan, Coffee Circus will be operated through a sole proprietorship. In this case, there will be private investors who are expected to contribute in raising the start up capital. However, these are going to be silent investors.
The plan gives detailed information of external funding that is necessary in meeting the expenditure required for successful running of the organisation. The organizations expect to fund its initial costs through long and short-term debts. The long-term loans will be paid over time while the short-term loans are required to be paid within a short period.
In this funding, the plan does not include the costs of the building, which I think represents a significant amount of money. It therefore presents a large fraction of the total costs. The start up cost of $99,000 initial funding is therefore not enough.
Since investors would like to know in detail how the organization is performing financially in order to use such information in making projections on returns on investment. Therefore, it is necessary for the plan to provide such information. Investors apply the details elaborated in the report while making critical decisions on investing in the business (Schwetje and Vaseghi 2007). The plan should therefore be in a position to attract investors.
Critical Analysis
Based on this analysis, I will myself refrain from investing in this kind of business. This is because the plan for the proposed business is missing some critical aspects that play a significant role in determining the performance on an organization. The plan has failed to provide adequate information on the possible number of customers that rare expected to purchase the products.
The information provided does not provide a convincing base that there will be adequate demand for the goods and services. Although the plan has clearly stated that its main aim is to provide affordable process for its products, it has failed to give the details on the process and how such prices will be sustainable. There is a need to provide adequate details on the value of such prices to reveal how low they are expected.
The report has failed to reveal the size of the market. It will therefore be a great risk to invest on such a market where there is uncertainty on the market size. In addition, the plan mentions that the business will ensure quality services for the customers and maximum satisfaction.
However, the plan has failed to provide adequate information on the measures that will ensure maximum customer satisfaction. Based on these conclusions, I would therefore refrain from investing in this kind of business. I would rather invest in a business where I will be certain on the security of my investment now and in the future. The information revealed in this report is not sufficient to make investment decisions.
Reference List
Abrams, R. and Kleiner, E. 2003. The Successful Business Plan: Secrets & Strategies. Canada, The Planning Shop.
Baker, M.J. 2000. Marketing Strategy and Management, 3rd edition. London, Macmillan Press.
Odgers, J. 2007. How to Write a Business Plan. New York, Cengage Learning.
Schwetje, G., and Vaseghi, S. 2007. The Business Plan: How to Win Your Investors’ Confidence. Denmark, Springer.
Timmons, J., Zacharakis, A. and Spinelli, S. 2004. Business Plans That Work: A Guide for Small Business. London, McGraw-Hill Professional.
Young, P. 2007. Business Plan. U.S.A., Global Media.