Kelly Messer
Venture Capital & Banking BUS 368
Prof. Amy Klesges
03, December 2012
My business idea is a cereal concept. This idea is a one-stop shop for a variety of cereal selections. This new business venture will include not only different types of cereals but also a variety of toppings for the cereals selection of choice. I will raise funds by applying for small business loans. Main start up goals will persuade vendors to give store credit, have market knowledge of the general area, and not tied up my funds in inventory. With a well financing plan in place business expectations will be accomplish based on historical results, trends, and overall product that are being put out. The business name will be called …show more content…
Cereal to Go! A name that states the product “cereal” and the service “to Go”. There will still be enough room to facilitate customers if they choose to sit in and tap into are complementary wi-fi. The cereal companies have made improvements to their products nutrition towards youth. Stats from Statisticbrain.com states annual cereal sales reached to 7.7 billion, and Annual boxes of cereal sold were 2.7 Billion in the U.S. I believe if I can tap into a quarter of the cereal market and place my shop in a key avenue of approach location, with a heavy customer potential. Once the store location is establish first time customers will be exposed to a variety of cereals taping into a quick childhood treat that they once loved.
With experiences in the field of logistics forecasting supply needs as the business grows will be fulfilled in a timely and organize manner. I believe 100% accountability of a business inventory is key for success; a strong managerial team leader will compose a plan to track items as they come in and go out, to insure inventory problems will not affect the business in its daily activities. Ideally financial request will be at a minimum, only asking specific financing on major purchases for fulfilling business goals and to help produce a quality product. A second mortgage can be taking out on the company’s real estate additional funding is needed. Financial forecasts outline will be establish in detail showing a repayment plan for loans taken out. To inform financial intuitions for successful approval for future loans a detailed business plan will give loan officers and potential investors an insight of the business explaining what the company does and go into detail on how successful capital gains will be achieved. A plan of action will all so be included on how to gain a superior edge on local competitors. All the choices in fast food market we are limited on what we can eat without added almost 1,000 calories into are diets. Cereal to Go is more than another fast food establishment, it a whole new concept of a quick meal or snack to go without dipping in to your budgets. Customers get to come in and choose from verity selections of their favorite brands of cereals, along with their bonus toppings a store clerk will be fill orders. Once cereal and topping selection is made the customers can top off their unique bowl with another verity of milk of their choosing just the way they did it when they were kids.
Cereal to Go! will provided a clean store and fast food concept. Each customer will receive a childhood snack filling satisfied with his or her product section. If the customer is not satisfied with his or her product section they and ask for a full refund or select another product. Customer satisfaction will be top priority. Leaders appointed will treat all employees with respect and together will achieve common store goals. Cereal product selection is the backbone of Cereal to Go. Top cereal brands will have to be parched for supply and demand needs. As capital gains are made, transition from top cereal brands will be replaced by a lower cost generic cereal brand. By slowly changing brands profit gains will rise significantly. A detail transition plan will list how some cereal will be replaced by still maintaining capital growth, “Brand loyalty in consumer preferences can be a significant source of incumbent advantage in many differentiated product markets because it builds up witching costs, which makes consumers reluctant to try new brands” Matthew 2004. With a solid transition plan in place I believe brand loyalty will not have an effect once selected top brand cereal is replaced. Legal trademark will be obtained for the business name “Cereal to Go!” all potential physical hazards will be identified in and outside of the store. Facilities will comply will all Americans with Disabilities Act needs. Part time delivery services and curbside pickup will be available for ADA customers. Obtaining an Employer Identification number will be establish before hiring any new employees to Cereal to Go! A main recorded database will contain records of employment taxes for up to four years and I-9 forms that “requires employers to verify and employee’s eligibility to work in the United States” SBA. Reporting newly hired and re-hired employees to the state of New Mexico within 20 days will be part of the business in processing procedures. Worker’s compensation insurance will be activated though the state worker’s compensation insurance program. All privacy laws will be followed protecting customer’s data in accordance with the federal trade commission.
The current state minimum wage rates in New Mexico are at $7.50 an hour. In the first quarter of startup cost I will hire two employees to work 40 hours a week. Facility start up cost is estimated at $60,000. I will be investing $10,000 of my own money into Cereal to Go! For cover unexpected costs once the business starts to operate in the first month period. With a detailed cash plan unexpected cash shortages will be avoided.
All financial statements will be addressed “statements developed using accounting transactions allow organizations to understand their business.
With respect to the income statement, which reflects the revenue and expense accounts” Hampton (2011). A financial and budgeting report will be conducted each month. By having updated financial report tax audit tractions will be accurate and accessible. Monthly budget reports will help “Cereal to Go!” run more effetely showing specific cash flow in each area of the business and helping to forecast product for next month. The business report will also help in the dissension making process for need expenditures.
Cereal to Go! Expected net sales of $23,000 in the next year. Cost of goods will be at $12,000. Total expenses $2,000, to cover variable expenses $0.48 out of every purchase dollar will be pulled. The remaining $0.52 will cover fixed costs and transfer to a profit. An estimated breaking even sale is at $3,846.
A marketing analysis of the local area will be conducted before opening day of Cereal to Go! From the information of the report, a better understanding of target customer’ demands, needs, and wants can be develop. To be competitive Cereal to Go! Will create a marketing strategy that will encompass low-cost, creative prices comparison to weed out competitors in the local …show more content…
area.
Marketing plan will have an influence in the location of Cereal to Go! Main marketing focus goals will be based off of “marketing related factors. Included among these factors are: (1) the true cost of marketing, (2) the benefits derived from marketing, (3) the role marketing plays in their businesses, (4) low-cost marketing strategies that work, (5) sources for obtaining marketing information, and (6) that competing against big businesses requires a competitive advantage” Weinrauch (1991). No know threats from big businesses in the area that produces the same product line, but a tentative plan will be developed if a big business does move in.
Target marketing will be the working class, students, and people that just want a quick snack or meal.
I believe the average customers ages will vary from the college youth to middle age adults group. Location will be key for business success. A survey of top four locations will be assessed on best approach to target the market effetely. Finally a timetable will post an outline of estimated start-up date, short-term goals, and product sales goals. Realizing what needs to be accomplished for success, and a strong business plan in place. I believe “Cereal to Go!” can tap into a new cereal market, with the U S economy not
flourishing.
By identifying the size of the investment “the company’s projections, you should be asking the question, What will the company be worth in three to five years?” Gladstone & Gladstone, 2004 pp.2. Investor of the company can calculate how soon a return on investment is and if the forecast is not correct the investor will own a large portion of the business to make back there return.
Cereal to Go! Statement of Cash Flows
Cash Flow from Operating Activities
Net Income 23,000
Adjustments to reconcile net income to net Cash provided by operating activities: Depreciation and amortization 21,000 Changes in other accounts affecting operations: (Increase) in accounts receivable 3,000 (Increase) in prepaid expenses 1,000 Decrease in accounts payable -1,000 Decrease in taxes payable -1,000
Net cash provided by operating activities 23,000
References
Gladstone, D., & Gladstone, L. (2004). Venture capital investing.
Upper Saddle River, NJ: Pearson Education
Hampton John, J. (2011). AMA Handbook of Financial Risk Management, Saranac Lake, NY, USA.
Matthew Shum, (2004) Journal of Economics & Management Strategy, Johns Hopkins University, Baltimore, MD.
U.S. Small Business Administration www.sba.gov.
Weinrauch, J Donald; Mann, O Karl; Robinson, Patricia A; Pharr,
Julia Journal of Small Business Management; Oct 1991.