Monte’s Natural Juice Manufacturing Company: Business Plan Essay

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Introduction

Monte’s natural fruit juice manufacturing company start up natural fruit processing company is located in Huston Texas. This company is focused on attracting a pool of definite loyal customers by introducing wide variety of delicious natural fruit juice flavors. Monte’s natural fruit juice company intends to establish a very strong market base since competition is low and very few challenges are anticipated. This company aims to avail products at very reasonable price to the consumer. By doing so, it intends to catch all levels of market share including low, middle and upper level earner in the market.

Monte’s natural fruit juice manufacturing company

It is located in Houston Texas owned equally by four partners who runs its management. All partner members have enormous experience in hospitality industry having worked in various reputable companies here in United States of America. Their experience ranges from administration, management, finance, sales and marketing putting them in a proper position of running this company efficiently. This company intends to employ five full time employees and ten part time distributors to help in distributing its product to designated market areas.

Product and services

Monte’s natural fruit juice manufacturing company intends to bring to market a wide range of fruit juice flavors for the consumers to choose from including mango, pineapple, straw berry and apple flavors. The company will ensure that the products fits customers demand even to the finest details. It will ensure constant market supply in order to promote customers trust and confidentiality on their products and services (Abrahams & Kleinberg, 2004).

Market

Over years demand for fresh natural fruit juice has been high due to its vital role in physiological body functioning in addition to it forming part of balanced diet. This fact necessitates high fruit consumption by the population. Monte’s natural fruit juice manufacturing company is focused on building and holding a large portion of market share in terms of customers which in return will project to high consistent revenues guaranteeing the business stability. In addition to this it intends to provide high quality products and services in order to attract a larger market share and out win its competitors (Groves, 2011).

Financial consideration

Monte’s natural fruit juice manufacturing company intends to raise a capital of $210,000 by each partner contributing equally amount of $52,500 from their personal savings. The company expects sales worth about $490,000 for the first year, $ 568,000 for second year and approximately $660,000 for the third year of the plan. It should break its operation by four months and increase its sales steadily. A Profit for the first year is expected to be $14,000, $35,000 in the second year and $47,000 by year three. This company is not expecting challenges in terms of cash flow.

Highlights

Highlights

Mission

Monte’s natural fruit juice manufacturing company intends to offer high quality natural fresh fruit juice in variety of flavors for consumers to choose from.

key to success

Key to success and command of tangible market share include:

  1. Ensuring provision of quality product and services.
  2. Maintaining market consistency.
  3. Availing competitive pricing for their product and services.

Company summary

Monte’s natural fruit juice manufacturing company is managed by four partners.They have experience in administration, finance, sales, and management. Each partner will contribute $52,500 equally from their own saving to cater for expenses to be incurred during the first month of operation. Due to partners experience the company expect to grow fast and hold large market share for its product. Little competition in this area is added value to the company success (Covelo & Hazelgren, 2006)

Company ownership

Monte’s natural fruit juice manufacturing company is located in Houston Texas and it is owned by four partners.

Start up summary

It is a start up company. Initial capital financing will be obtained from partner’s contribution.

Products

Monte’s natural fruit juice manufacturing company is focused on processing natural fruit juice in various flavors including mango, strawberry, pineapple, and apple. It is dedicated to providing consumers with different flavors and granting convenience by ensuring that its product is readily available in the market at considerable price. Approximately seven hundred liters of each juice flavor will be produced daily in the first month.The quantity will be increased with time in order to satisfy market demand.

Market analysis summary

Monte’s natural fruit juice manufacturing company intends to serve market share that has taste for variety of fresh fruit juice flavor.

Market segmentation

This company targets the low, middle, and upper level income earners since they all take substantial amount of fruit juice daily. It intends to emphasis on quality and consistency products and services in order to hold and sustain market share segment (Pinson, 2008).

Pricing strategy

Monte’s natural fruit juice manufacturing company apply cost plus pricing strategy which is work appropriately for many business. This strategy will involve putting in to consideration total production cost plus the profit margin (Abrahams & Kleinberg, 2004).

Financial Plan

Monte’s natural fruit manufacturing company expects to raise $210,000 from each partner contribution of $52,500. This will provide essential the bulk of the present financing.

Break-even Analysis

Monte’s natural fruit manufacturing company Break-even Analysis is based on the average of the year one figures for total sales by units, and by operating expenses. These are presented as fixed costs, per-unit cost, and per-unit revenue (Covelo & Hazelgren, 2006). These conservative assumptions make for a more accurate estimate of real risk. Monte’s natural fruit manufacturing company should break even by the fourth month of its trade as it progressively increases its sales (Groves, 2011).

Break-even Analysis

Break-even analysis
Monthly Units Break-even17,240
Monthly Revenue Break-even$38,346
Assumptions:
Average Per-Unit Revenue$2.12
Average Per-Unit Variable Cost$0.30
Estimated Monthly Fixed Cost$32,443

Projected Profit and Loss

As the Profit and Loss table shows, Monte’s natural fruit manufacturing company expects to maintain its solid growth in profitability over the subsequently three years of operations.

Pro Forma Profit and Loss

Year 1Year 2Year 3
Sales$491,000$567,105$655,006
Direct Cost of Sales$76,750$88,646$102,386
Other$0$0$0
Total Cost of Sales$76,750$88,646$102,386
Gross Margin$414,250$478,459$552,620
Gross Margin %84.37%84.37%84.37%
Expenses
Payroll$260,800$273,840$287,532
Sales and Marketing and Other$27,000$35,200$71,460
Expenses
Depreciation$60,000$69,000$79,350
Utilities$1,200$1,260$1,323
Payroll Taxes$39,120$41,076$43,130
Other$0$0$0
Total Operating Expenses$388,120$420,376$482,795
Profit Before Interest and Taxes$26,130$58,083$69,825
EBITDA$86,130$127,083$149,175
Interest Expense$10,000$9,500$8,250
Taxes Incurred$3,111$12,146$15,650
Net Profit$13,019$36,437$45,925
Net Profit/Sales2.65%6.43%7.01%

Projected cash flow

The cash flow projection shows that necessities for current expenses are satisfactory to meet Monte’s natural fruit juice manufacturing company needs as the business generates cash flow adequate to sustain operations.

Cash flow

Cash flow

Pro Forma Cash Flow

Year 1Year 2Year 3
Cash Received
Cash from Operations
Cash Sales$491,000$567,105$655,006
Subtotal Cash from Operations$491,000$567,105$655,006
Additional Cash Received
Sales Tax, VAT, HST/GST Received$0$0$0
New Current Borrowing$0$0$0
New Other Liabilities (interest-free)$0$0$0
New Long-term Liabilities$0$0$0
Sales of Other Current Assets$0$0$0
Sales of Long-term Assets$0$0$0
New Investment Received$0$0$0
Subtotal Cash Received$491,000$567,105$655,006
Expenditures
Expenditures from Operations
Cash Spending$260,800$273,840$287,532
Bill Payments$143,607$186,964$237,731
Subtotal Spent on Operations$404,407$460,804$525,263
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out$0$0$0
Principal Repayment of Current Borrowing$0$0$0
Other Liabilities Principal Repayment$0$0$0
Long-term Liabilities Principal Repayment$0$10,000$15,000
Purchase Other Current Assets$0$0$0
Purchase Long-term Assets$0$20,000$20,000
Dividends$0$0$0
Subtotal Cash Spent$404,407$490,804$560,263
Net Cash Flow$86,593$76,301$94,744
Cash Balance$156,593$232,894$327,637

References

Abrahams, R., & Kleinberg, E. (2004). The successful business plan: Secrets and strategies. New York, NY: Russell Sage Foundation.

Covelo, J. A., & Hazelgren, B. J. (2006). The complete book of business plan: Simple steps to writing powerful plan. New York, NY: Springer.

Groves, L. (2011). . Web.

Pinson, L. (2008). Anatomy of business plan: the step by step guide to building your business. New York, NY: Russell Sage Foundation.

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