Big 4 Snacks – Business Plan

Published: 2021-06-21 23:00:06
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Big 4 Snacks Business Plan   Confidentiality Agreement Executive Summary Business Description Mission Values Integrity Professionalism Goals Marketing Plan Target Market Market Size and Market Share Competition Marketing Strategy Product Strategy Promotion Strategy Pricing Strategy Distribution Strategy Location Management Organisational structure Financial Plan Critical Risks Competition Economic changes/trade cycles Interest rates Standards of living Summary


Executive Summary
The year 2014 marks the birth of a small, promising company which was founded by four members aiming to be the leader in providing biscuits to other retailers as well as final consumers. At present, the company buy its stock form One up Wholesaler which is located in the central suburbs of Cape Town. The company would like to register its business with the respective authorities and achieve a legal business status. The company aims to grow in the near future to the extent of becoming the manufacturer of its own products and supplying to retail shops as to the customers. This will be achieved by the company through taking a loan for the bank to purchase industrial biscuit making ovens hence the ability to produce the products in bulk. Having been started by four members, the members have equal shares in the business.
Business Description
The Big 4 Snacks is a small company that was started by four members namely Cumani Nako, Rhandzeka Mawuku, Rampai Mokomatsilili and Tinashe Munyuki. The company’s main core business entails selling Snack (biscuits and sweets) in the Western Cape Province. Mission We aim to provide the best Snacks to our valued customers at moderate prices. We view ourselves as partners with our customers, employees as well as the society at large. Values: We have our own unique values which defines our business. These include: Integrity- we believe that the value of being honest in business operations; be it with customers, suppliers, employees, among other business stakeholders, overrides the need for profit making as creating good reputation in the market can lead to endless sales volumes. Professionalism- we take all our transactions with our key stakeholders in a professional manner, creating a strong bond with them hence enhancing the growth of our business in the market. Goals- the Big 4 Snacks aims to achieve the following objectives:
Short term goals (2014- mid 2015)

To increase the company’s sales by 5%over a period of two months.
Create a website for the company.

Medium term (2015-mid 2016)

Acquire two ovens for making biscuits.
Purchase office furniture: – desks, two computers as well as office stationery.
Provide online shopping for our products

Long term (2016- end of year)

Purchase two delivery trucks (3-5 ton).
Purchase of a factory outlet in a 20km radius.
Purchase three industrial biscuits making ovens.

Marketing Plan
Target Market
The market for Big 4 Snacks focuses on a segment with the following characteristics:

All students who study at TSiBA Education.
People who reside in the 5km radius of TSiBA Education.

Market Size and Market Share
The current size of the target market is approximately 500 individuals which is likely to be 37% of the target market
Competition
The Big 4 Snacks operates in a market environment where there is massive competition. Some of the competitors are listed below.

TSiBA tuck shop.
Spaza shops close to the TSiBA campus.
Indirect competition from other stores- (competition according to product needs).

Marketing Strategy
Product Strategy
The company provides the following products: Biscuits Sweets
Promotion Strategy
The most common strategy in place at present is the word of mouth. This has been effective as it allows us to engage with customers in terms of promoting our products and our brand. We also use social networks including facebook, twitter as well as sending emails to most of our customers.
Pricing Strategy
The following prices apply:



Snacks
Price in Rands


Biscuits (3 packets)
R5.00


Sweets (10 sweets)
R3.00



Distribution Strategy
The company obtains its products from a reliable supplier called One Up Wholesalers at a relatively low price. The supplier is close to the business premises hence less transport costs.
Location
The Big 4 Snacks is located in Cape Town at Tsiba Education, Pinelands. The pale is close to the Railway Station (Mutual Station) hence easy transport of employees to the workplace. It is close to our supplier, namely One Up Wholesalers. From the feasibility study conducted by the marketing team, we noted that the pale is accessible to customers, most importantly students as they for the biggest proportion of our market share.
Management
The management team consist of the founders of the business. However, each and every member among the members will be focusing on a certain component of the business.
Organisational structure
The following diagram shows the organisational structure of the Big 4 Snacks at present. Duties and Responsibilities of each member Tinashe Munyuki- Managing Director

Responsible for the overall operation of the business, including facilitating day to day operations of the business

Cumani Nako- Chief Finance Officer

Responsible for monitoring the finances of the business, managing cash inflows and cash outflows.

Rampai Mokomatsilili- Marketing Director

Responsible for the marketing department of the business; together with the public relations of the business.
Creating a good reputation for the company.

Rhandzeka Mawuku- Chief Operating Officer

Responsible for the day to day operations of the business, including purchase and stock management

Financial Plan



PROJECTED STATEMENT OF FINANCIAL POSITION FOR BIG 4 SNACKS






2014
2015
2016


Assets








Non current assets








Motor vehicle




40000
100000


Office equipment



1000
8000
10000











Current Assets








Inventory



400
9000
20000


Accounts receivable



250
4000
17000


Bank



700
3000
21000


Stationery





2000






2350
64000
160000


Equity and Liabilities








Equity








Capital



200
200
200


Retained income



800
16000
20000











Non Current Liabilities








Long term loan



750
29800
130800











Current liabilities








Accounts payable



600
8000
9000











Total Equity and Liabilities



2350
64000
160000
























Projected Statement of Financial Position of Big 4 Snacks







2014
2015
2016


Sales



9000
23000
279000


Cost of Sales



1100
9000
34000


Gross Profit



7900
24000
245000











Operating expenses








Rent



4000
9000
10000


Salaries



2000
7000
20000


Water and Electricity



1000
1000
2300


Depreciarion



50
500
1200




















Net Profit Before Interest and Tax



850
6500
211500


Tax Paid



90
1000
2100


Interest paid



400
2000
2000


Net Profit After Interest and Tax



360
3500
207400





















Critical Risks
As it is the best thing to find the likely causes of the business failure, the Big 4 Snacks identified the following challenges/risks which might hinder success of the business.
Competition
This entails the contraction of the market size due to availability of other businesses offering the same products as ours. Fighting for the same market share, competition will lead to reduced sales of our business thereby lowering the profit margins. Despite the government’s efforts to support small businesses, massive competition from big companies such as Shoprite and Pick n Pay remains a difficulty in the growth of small businesses. This factor might affect the performance of our business even though some measures have been put in place to ensure building a good brand image as well as creating a positive goodwill.
Economic changes/trade cycles
The performance of the South African economy has been fluctuating, being characterised by continuous trade cycles. Taking this into consideration, our business might be affected negatively by the high rates of inflation, leading to costly supplies from our suppliers. This will in turn affect the returns to the company.
Interest rates
As a business which might need to borrow money in order to boost the operation of the business in the near future, the cost of borrowing remains a challenge Depending on how our cash flows will be in the near future, the need to borrow some funds might lead to an increase in the expenses of the business, thereby reducing profits.
Standards of living
In regard to the standards of living of an average South African, especially considering our target market, poor standards of living will lead to a decrease in our sales volumes.
Summary
Combining all the information compiled in this business plan, the Big 4 Snacks is a vibrant, promising business which sells snacks (biscuits and sweets) currently at TSiBA education. The company aims to expand in the whole Western Cape Province, becoming the leading provider of snacks to retailers as well as to the final consumers. Despite the challenges that might be encountered in the business operations, the company aims to increase its market share, creating a positive goodwill in the market. 1

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