Monday, April 9, 2012

Fictional Business Plan

This blog explains the creation of a fictional business plan

I borrowed a business book by Greg Balanko-Dickson (2006), "Tips and Traps For Writing an Effective Business Plan" from my local library. This book is also available on Amazon, just click on the link.  Greg covered many steps involved in making a business plan which I used his points to realise the overall business as examples for blogs.

The information below is just a matter of putting my raw imagination into context for business. All names and places are purely fictional.

The company name is called "J&J's Groceries - You select! We deliver Grocery!". I choose the name as the company provides good thought into a brand name for customers in selecting good quality food (fruit and veggies) from the stores at various locations and the company delivers their food at their earliest convenience.

Business industry is a Grocery and Food Delivery Industries combined. There are three competitors, named "Brians Groceries", "Council Food Deliveries" (similar to "Meals on Wheels" form of service which is managed by a council by volunteers), "Supermarket Fresh" a local supermarket. Excel will be used to find how much share of the industry or market is currently the strongest.

Structure of the company is a small business aged three years old managed by two brothers named Jane and Joe Bros Limited. The ownership is registered by Jane who is in partnership with his younger brother Joe. Jane (pronounced JA-ne) is a business-oriented person who learnt a diploma in TAFE about managing a business. Joe is an experienced green grocer who their late father Back has handed down their family tradition of grocery store to Joe. Joe has asked Jane if he could take care of the business so Joe can focus primarily on goods and supplies. This has worked out well as long as Jane can keep the language simple that Joe could follow and understand about how the business runs.

The staff roles and some responsibilities are listed as follows
Jane and Joe - Business owners. Jane is an afternoon type of worker. Jane will manage the store, briefly review business operations, handle some order processing and finish with some delivery using his own car for customers orders. Joe is a morning type of person who is always follow the rising of the sun to buy daily groceries from various suppliers and be the first in the store selling them to customers before Jane enters the store at around about lunch time.
Shelly - business secretary and receptionist who mostly works in the office and produce reports for both Jane and Joe at various times of the day regarding the flow of business in general.
Eric - Store man manager who works well with Joe in the morning with spending money on goods acquired in the early morning shopping with suppliers and Eric then ensures they are delivered into the store house on time for processing customers and business orders.
Porter - Business only delivery trucker who ensure all orders are delivered to business as a priority.
Mick - an IT university student currently doing some work experience in the business sector to fulfill a business profile study for the course. Micks current Excel skills will become invaluable to both Jane and Joe gaining a snapshot of what occurs in the business. Further blogs will be developed as the story unfolds on how Mick can work towards improving the business.
Ashley, Furnis, Doein - young part-time workers helping out the business. Processing goods in the warehouse for orders/requests into deliveries packages for truck delivery.
Walter - A family friend who is a qualified accountant whom regularly audits the bookkeeping practices, helps out with business tax returns and ensure the financial strategies are sound.

The customer demographics are deliberately set to be simple. We have 6 types of consumers accordingly to their needs.
1) Morning Groups - Various fresh food for families or early starters who are up in the morning often needs fruit for their lunches on their way to work.
2) Afternoon Groups - Various fresh food for workers who walks in for their lunch consisting of fruit or families who have time to get vegetables for dinner.
3) Evening Groups - Various fresh food for later workers who needs to make their dinners
4) Business catering - Fresh food at a modest bulk price to serve food for business lunches.
5) Business restaurants - Fresh food for discounted price.
6) Business cafe - Fresh food as a negotiable price for cafe.

The Suppliers - 5 suppliers were identified.
1) Locally - "Grocery Farmers Market" is the main distribution hub where many local farmers produce their fruits and vegetables. Prices are set at wholesale for bulk containers. Competitors also shows up there.
2) Locally - "Paddy Orchards" for a seasonal and a limited number of stock on fruits only.
3) Locally - "Shack Vegetables" for seasonal and limited stock on vegetables only.
4) Interstate - "Fields Orchards" is a small family owned business providing distribution of their own farmers produce.
5) International - "Hardy Garden Market" is the wholesale distribution for special fruit and vegetables recognised by some customers not produced locally.

The products or goods are basically fruits and vegetables that are managed according to seasons as the suppliers rotate their goods due to availability. Further blogs will be required to explain this section in depth.

The services have not changed over the last three years which is basically put the goods in printed boxes of various sizes to allow better handling and storage on Porter truck or Jane car.

Operational procedures
Administration and Office Manager (Jane & Joe on a time rotation basis, Shelly full time for delegated tasks)
Responsible for some administration, office management, financial keeping and reporting.
· Cash flow management: tracks and analyse financial performance
· Internal control systems: budgets, purchase orders, credit approval and collection.
· Weekly and monthly ratio reports and analysis reports.
· Account receivable collection: maintains average receivables aging 30 to 60 days
· Job costing
· Payroll
· Accounts payment (A/P) and accounts receivable (A/R)
· Overseeing of shop expenses
· Handling of bank reconciliations
· Forecasting of A/P and A/R on a weekly basis with operations manager.
· Individual case studies for major purchases, as needed

Operations Manager - Dispatch and Sales (Eric and Porter)
Management of the day-to-day operations
· Purchasing goods from suppliers
· Maintaining on-time pickup and delivery schedules according to customers demand
· Maintaining daily drivers logs
· Completing dispatch and billing orders
· Compiling weekly management reports
· Sales: Maintaining contact with all major accounts (weekly) and actively establishing relationships with new customers (1 per week).
· Work Monday to Friday 8am to 5pm
· On call roster 24/7

Equipment Maintenance
Jane & Joe has a contract agreement with provider "Tracey's business suppliers" for all primary equipment and maintenance repairs which also include office equipment like computers and photocopiers.

Processes
Early morning is mostly purchasing goods from suppliers according to customer demand
Delivery of goods to arrive in shop / warehouse
Load the shop for regular customers while warehouse starts business packaging
Commence delivery of packaging during the day while customers orders will be generated at the end of the day
Finalise all delivery that are outstanding before closing up the shop

This business has 5 goals.
1) Maintain good food quality - Ensure the quality of food and proper food handing procedures remains high by asking customers a survey of their business at the end of each month. Data is collected and audited by Walter against financial and business performance.
2) Delivery commitment - Ensure all goods received from the suppliers arrived within no more than 3 hours from purchase to allow processing of orders/requests from customers. Ensure all delivery of customers orders/requests are completed with 4 hours maximum. All information are recorded on paper based notes with different time-based stamps.
3) Stakeholders complaints procedure - Ensure all complaints are recorded in a timely manner that can be reviewed and actions are communicated back to the stakeholders affecting the business. Data is collected and audited by Walter against financial and business performance monthly.
4) Financial goals - Ensure a buffer of at least 2 to 3 percent of total cash flow is achievable to cater any unexpected risks to the business.
5) Implement a risk management process throughout the business - This will improve occupational and health safely issues raised in the workplace.
That will be enough to get started on the next blog. I will create an introduction to Excel and VBA before addressing the transfer of content into Excel.

Til then,
Peter.