Executive Summary
To establish a successful business, it is important to develop a comprehensive strategic plan which is the basic blueprint for the actualization of a business plan. Reflectively, the strategic plan is inclusive of the SWOT of the business environment, penetration strategies, and success measurement parameters at the micro and macro business environments. This strategic plan is for the proposed Regency Drycleaners Limited located in the UAE within the region of Abu Shagara, Sharjah.
The mission of the business is to provide the most cost-effective and reliable laundry services within the targeted region and beyond. The business will serve customers from the high, medium, and low economic ends since laundry services are used across all classes. The laundry services will be the most affordable within the Abu Shagara region. At present, the laundry service industry within the targeted region is relatively noncompetitive since very companies are offering these services. Thus, Regency Drycleaners Limited is projected to penetrate this market within very minimal resistance.
SWOT Summary
Refining the Plan: The aspect of financial and market feasibility will be examined before the business is declared viable.
General Company Description
This business will be called the Regency Drycleaners Limited abbreviated as DCL. This business will be located in the UAE in the region of Abu Shagara, Sharjah. The business will accept all kinds of dirty clothes and promises to deliver clean clothes within 24 hours. The form of ownership of the Regency Drycleaners Limited will be through sole proprietorship. This choice is informed by the fact that the starting capital is relatively small. Besides, the business does not need a lot of commitment from many managers. Besides, a sole proprietorship will enable the owner to take all the profits.
The Regency Drycleaners Limited targets customers from high-end and low-end economic classes. However, due to low prices that will be charged for the dry cleaning services, the business focuses to gain more from the lower-income bracket. Specifically, the business targets customers in the age bracket between twenty years and above since this age group often have clothes that require dry cleaning. Besides, the business intends to make sure that customers receive their clothes within twenty-four hours.
Moreover, the business will introduce discount cards such as the premium, regular and ordinary cards to customers. Customers who get these cards will have to pay even lower for the services as long as the conditions within the cards are met. The business will collect the dirty clothes from the homes and houses of clients and offer free delivery to clients with premium cards. Also, the business will charge an average of only AED 20 for every dry cleaning service. The Regency Drycleaners Limited will follow the following principles as guidance for sustainable business;
- Honesty and integrity in handling the need and concerns of the customers and the business environment.
- Professionalism and respect to the personality and foundation of the relationship between the business and customers.
- Quality assurance and quick response to any request of the customers.
The mission of the Regency Drycleaners Limited will function on being the leading business in the dry laundry cleaning in Abu Shagara. The goals of the proposed Regency Drycleaners Limited are summarised into short-term goals as listed below.
- The marketing goal will be to acquire 100 clients per week for the first 12 months. With a typically well-organized commodity pool, this business is geared to quickly increase its market share since the beneficial interests can be distributed across the commodity users. This strategy will facilitate the restructuring of effective sales and public awareness to develop product knowledge.
- One of the product strategies that the business will utilize is to make sure that it attributes the dry cleaning laundry services to convenience and affordability. The business will charge the laundry services at AED20 as a strategy to attract consumers within the second quarter of the first years of operation.
- The business aims to expand its customer base to regions outside the Abu Shagara by recruiting five salespersons who will double up as pick and delivery service providers within the first six months of operation.
Products and Services
The proposed Regency Drycleaners Limited will offer dry cleaning services to customers within the targeted region. The products will be segmented into premium, gold, and standard to target the high-end, middle-income, and low-income customers. The products will be differentiated based on extra services such as free delivery, time taken to dry clean, and method of dry cleaning. The rationale for creating multiple products is to attract customers from all classes and create an environment of their competition, thus locking out potential rivals.
Marketing Plan
Target market
The Regency Drycleaners Limited targets customers from the high, middle, and low income ends. However, due to low prices that will be charged for the dry cleaning services, the business focuses to gain more from the lower-income bracket (Mariotti 46). Specifically, the business targets customers in the age bracket between twenty years and above since this age group often have clothes that require dry cleaning. The customer base area for the customer segment is within the targeted region.
Product features and benefits
The Regency Drycleaners offers the most reliable, dependable, and affordable dry cleaning services. The business will adopt the product development strategy of constantly modifying its services to suit the demands of the customers. Being a customer of the Regency Drycleaners would mean having a lifetime membership card that promises free laundry services after every ten visits to this store within six months. The business will also offer a series of discounts to customers.
Product differentiation
The laundry service business will be the first of its kind in the business location area. Moreover, the business will introduce discount cards such as the premium, regular and ordinary cards to customers. Customers who get these cards will have to pay even lower for the services as long as the conditions within the cards are met. The business will collect the dirty clothes from the homes and houses of clients and offer free delivery to clients with premium cards. The business guarantees money back for justifiable dissatisfaction.
Pricing
Through the good, better, best pricing strategy comprising of discounts for every laundry service, the target client segment is projected to increase their dependence on the company. Therefore, applying the costing strategy, the company will be able to attract customers and achieve the aim of the quantity maximization by the increasing number of laundry services. The business will use a promotional price of AED20 per service.
Place (Distribution) issues
For the Regency Drycleaners to reach the target market, the company will hire three vehicles fitted with loudspeakers to announce the product across different estates where the target market is easily found. These automobiles will also be fitted with visible posters of the company’s services and discounts (Cheverton 33). The automobiles will be allocated to different regions of Abu Shagara where the availability and visibility of the company’s products are minimal.
Advertising
The marketing plan will comprise of a detailed calendar of the business advertisement. The year will be divided into three segments January-April, May-August, and September-December. To create customer awareness about the product, it will run daily advertisements on the television to make sure that consumers know about its activities. As consumers get to know about the product, the company will relax its advertisement program.
Therefore, the second segment will entail running the advertisements thrice per week. This will aid in keeping the clients aware of the product. Besides, it will target those consumers that might not have heard about the products. The last segment of the calendar year will involve running the television advertisement once per month. By this time, the majority of the consumers will have known about the products (Rhim and Lee 161).
Promotions
The company chooses to use sales promotion through discounts and issuance of redeemable points. This choice was made since it will help the company to increase its sales volume within a short period. In this case, the company will apply a sales promotion strategy such as push-up sales. This will facilitate in attracting and retaining new customers by issuing them with free laundry and other after-sales services such as free delivery (Cheverton 44). Sales promotion will ensure that consumers return to the company whenever they need laundry services.
Operational Plan
The Supply Chain
The supply chain determines the success of a company’s marketing strategy and ease of business sustainability. This company will adopt the pseudo marketing strategy to further penetrate the market and sustain its captured market. Accessibility and transition in the marketing plan will ensure efficiency and proactive response analysis to further improve on the demands of prospective clients. To increase credibility and maintain professionalism, the market entry plan will encompass processes and features that flawlessly facilitate healthy and lifetime relationships between the business and its clients.
Among the new development elements that will be incorporated to build trust are the establishment of a strong distribution, fair retribution process, and passing accurate information to the target audience to restore confidence within the new networks. Therefore, customer retention is achievable through the creation of a reliable and affordable marketing channel that is essential in monitoring a matrix that maps out potential competitors and identifies the weaknesses and strengths of the clients. Moreover, the reporting criteria will reflect the success of the marketing calendar and set targets generated from time to time.
Quality Assurance Strategies
Production efficiency is critical in the production line since it is characterized by optimal utilization of allocated factors of production within the least possible cost. Quality improvement will be used to measure, assess, and improve client service delivery outcomes. The success of quality improvement and organizational change management will be dependent on the alignment of the production soft skills and sustainability strategy for the proposed business. If well organized, the strategy will complete the response projections for the company which shall be addressed in the proposed quality service delivery system.
IT resources
The Regency Drycleaners will require 6 computers, three office telephones, four laundry machines, and a network connection. The network connection will facilitate interaction between the general manager and other employees of the business. Besides, the telephones will be instrumental in communicating with the customers and the sales team when they are in the field.
Customer services
The Regency Drycleaners will compile a database of the potential and actual customers on the computers. Besides, the telephones will have a backup of contacts of the regular customers. Also, the company will open a social site from where customers will be in a position to see the latest promotional activities and price discounts.
Management and Organization
Management
The main determinants of success metrics in business production activities are the production strategies and the aspect of human input. The labor output will eventually determine the productivity of business activity at the micro and macro levels of business operations. In the case of the Regency Drycleaners, the business manager will be tasked with the duty of ensuring that the business guidelines are met within an efficient utilization of resources.
Under the business, the manager will be the coordinator. The business coordinator will form the primary link between the general manager and other units of the business. Under the coordinator will be the logistics officer and the marketing manager. The head of logistics and the marketing manager will ensure a smooth flow of the business activities in the company through constant coordination with the sales team consisting of 6 salespersons (Rhim and Lee 188).
Corporate culture
Quality planning of work specialization is an important policy that aims to promote long term success in business objectives since it is focused to enhance the effective exploitation of human resources (Osterman 404). The Regency Drycleaners business will adopt the professional approach and each employee will have specific duties to perform. A performance review will be carried out every three months to ensure that the employees obey the culture of hard work, quality, and transparency in serving the interests of the business.
The organization structure of the Regency Drycleaners business will be characterized by a streamlined chain of bureaucracy in the chain of command from the general manager down to the sales team. The structure will encourage security, comfort, and safety, and the prevailing physical convenience of the staff. Measuring factors such as interpersonal relations, working conditions, support and trust, welfare provisions, and work environment will greatly contribute to the organizational effectiveness within the business’ corporate culture (Bowden 67).
Leadership philosophy
The Regency Drycleaners’ leadership philosophy will operate on the periphery of Patagonia’s philosophies of management as mere guidelines for rationale rather than rules cast on stones (Kotler and Keller 42). Basically, this philosophy of ethical conduct code functions on responsible business undertakings with moral worth. This philosophy will create a sense of responsibility among the employees to promote business environmental sustainability through the preservation of professionalism and the general business environment for success.
Job descriptions
Business manager:
- Administrative role.
- Planning and organizing sales drive in different regions.
- Setting targets within the business.
- Planning of the strategies and monitoring progress of the previous plans.
- Registering and receiving bi-monthly sales reports.
Business coordinator:
- Planning and organizing sales drive in different regions.
- Implementing the set targets within the business.
- Answer questions about the products.
- Being the company’s brand ambassador to new clients.
Marketing Manager/Logistics officer:
- Promoting and marketing the company’s products.
- Planning and organizing sales drive in different regions.
- Setting personal targets for the sales teams within the company’s targets.
- Planning of the sales strategies and monitoring the progress of the previous plans.
Retail sales associate:
- Promoting and marketing the company’s products.
- Planning and organizing sales drive in different regions.
- Executing the sales strategies and monitoring the progress of the previous plans.
- Registering and receiving bi-monthly sales reports.
- Collecting products that are defective from customers within a defined region.
- Being the company’s brand ambassador to new clients.
Job specifications (Qualification for Job)
Business manager:
- University degree in business management.
- Language skills: Fluent in English and the local language.
- Two years of experience in a senior management position.
- Proficient with the latest sales and marketing applications.
Business Coordinator:
- University degree in sales and marketing.
- Language skills: Fluent in English and the local language.
- Two years of experience in a senior management position.
- Proficient with the latest sales and marketing applications.
Logistics/Marketing manager:
- University degree in sales and marketing.
- Language skills: Fluent in English and the local language.
- Two years experience in a mid-management position.
- Proficient with the latest sales and marketing applications.
Retail sales associate:
- College diploma in sales and marketing.
- Language skills: Fluent in English and the local language.
- One year of experience in sales and marketing.
- Ability to work under pressure.
Training employees
Developing a training and development strategy requires the creation of relevant objectives and a realistic budget. The training and development strategy is continuous but periodically executed after every six months. The first phase of training will be on personal development while the second phase on teamwork and production quality skills. The two phases will target the Intra and interpersonal development of the employees about performance in the work environment (Cheverton 39). This is summarised in the table below.
Compensation
The compensations that will be offered to employees of the Regency Drycleaners Limited will be in the form of monthly salaries payable after every thirty continuous days of labor provision. The proposed salary package for each position is presented in the table below.
Incentives
To motivate the staff of the Regency Drycleaners, it will use a mixture of motivation enhancing practices promotions, rewards, and recognition. For instance, the sales team will be given a commission on top of their salary for meeting the monthly targets. The management team will be entitled to an annual salary increment and end year gratitude which will be five percent of the annual returns. Also, the business will give the first employees a five percent stake in the business.
Personal Financial Statement
The Regency Drycleaners Limited 12-Month Income Statement
The Regency Drycleaners Limited, Balance Sheet As of 30th December 2017.
Start-up Expenses and Capitalization
From the above estimations, the business will need start-up capital of AED74, 000. Therefore, the owners of the business will have to apply for a long term loan of AED74, 000 repayable within three years. Part of the loan will be used for expansion in the second year of operations.
Financial Plan
Business financing has become a challenge for those aspiring to expand an existing business or start a business. Thus, this part attempts to explicitly review the sources of funding options available for the Regency Drycleaners Limited. Besides, the treatise explores the cost aspects of each source of business financing and the importance of financial planning. Business financing has become a challenge for those aspiring to expand an existing business or start a business. Thus, this part attempts to explicitly review the sources of funding options available for the Regency Drycleaners Limited. Besides, the treatise explores the cost aspects of each source of business financing and the importance of financial planning.
Internal Sources
The internal financing options available for the company include personal sources such as retained profits and share capital. Basically, the retained profit is the funds generated by the initial business when it profitably trades. Reflectively, retained profits are necessary is financing the further expansion of the company since the business has the potential of making consistent sales. Besides, the company has the option of acquiring funding from the share capital which has been the main source of funding for the start up (Kotler and Keller 34). Through share capital, the owner will be in a position to retain full control and ownership of the company, especially if he or she is the sole contributor.
External Funding Sources
Among the most viable external funding sources available for the Regency Drycleaners Limited include loan capital in the form of bank overdraft or bank loan, engaging external investors, and convincing business angels to be part of the company.
Bank loan/Overdraft
Under a bank loan option, the Regency Drycleaners Limited will be in a position to receive funding that is fixed over some time. The loan(s) will attract different interest rates, depending on the type and amount that the business will borrow. Reflectively, bank loans are repaid over a longer period and repayment schedules are fixed. Besides the bank loan, the Regency Drycleaners Limited has the option of acquiring financing through a bank overdraft. Basically, a bank overdraft is a short term loan. Bank overdrafts are a very flexible source of business financing since they can be used to handle temporary cash flow fluctuations in the company (Bowden 69). Besides, bank overdrafts may offer the company a lifeline when it experiences temporary cash flow challenges.
Share Capital from Outside Investors
Another source of financing available for the Regency Drycleaners Limited is the use of funds from outside investors such as contributions from family, friends, and interested investors who will be given shares in the company according to their contribution (Cheverton 29). The fund contributors will be allocated shares in line with the total capital that the company requires for the expansion of the business.
Debt Financing Securing Plan
Full knowledge of the business costs will be instrumental in deciding the most cost benefits funding sources available for the business. This implies that financial planning at the Regency Drycleaners Limited will ensure an easy cash flow forecast and managing internal funds flow. Considering the nature of the business and industry, the most appropriate source of funding would be bank overdraft and share capital from external investors funding (Bowden 68). Bank overdrafts will give the business leverage against temporary cash flow problems and under or overestimations. Besides, bank overdraft is a flexible source of funding for the Regency Drycleaners Limited.
Works Cited
Bowden, John. “The Process of Customer Engagement: A Conceptual Framework.” Journal of Marketing Theory & Practice, 17.1 (2009): 63-74. Print.
Cheverton, Philip. Key Marketing Skills: Strategies, Tools, and Techniques for Marketing success, London: Kogan Page, 2009. Print.
Kotler, Philip, and Kevin Keller. Marketing Management, New Jersey: Pearson Prentice Hall, 2012. Print.
Mariotti, Steve. Entrepreneurship: Starting and Operating a Small Business, New York: Prentice Hall, 2007. Print.
Osterman, Paul. “Job Design in the Context of the Job Market.” Journal of Organizational Behavior 31.2 (2010): 401–411. Print.
Rhim, Hosus, and Chan Lee. “Assessing Potential Threats to Incumbent Brands: New Product Positioning Under Price Competition in a Multi Segmented Markets.” International Journal of Research in Marketing, 22.1 (2005): 159-182. Print.