Financial Management Essays Example

Introduction 7

Executive Summary 8
1.1 Gourmet Chocolates Business 8
1.2. Description of Services and Products 8
1.3. Market 9
1.4. Financial Profile 10

Description of the Business Summary 12

Mission Statement 12
Business Model 13
Business Strategy 13
SWOT Analysis 14
Strengths 14
Weaknesses: 15
Opportunities: 15
Threats: 16
3. Marketing Strategies for Gourmet Chocolates 16
3.1. Price-Strategy Marketing 16
3.2. Product-Strategy Marketing 17
3.3. Promotion-Strategy Market 18
3.4. Place-Strategy Marketing 18

Action Program 19

Budgets 19
Breakeven Analysis 20
Cash Flow Statement 21
Controls 24
Contingency Planning and Conclusion 24
Introduction
The assessment business plan intends to give uncle Ulrich the necessary tools to pursue the entrepreneur dream of starting his own gourmet chocolate business in the United States. It is every American citizen’s dream to attain personal and financial freedom. Therefore, Ulrich shares the same dream because he has been of substantial service for the country for over 35 years. The 2007-2010 recessions in the United States that led to a sharp slowdown of the economy. The marketing plan paper entails Executive summary, summary description of Uncle Ulrich business, market analysis, marketing strategy, and financial analysis. The paper would highlight the objectives of the company and relevant issues with Marketing plan, action programs, and the budgets. Finally, it encompasses the controls and the contingency planning of the marketing plan.
The assessment will further outline uncle Ulrich nature of business. It majorly focuses on the business initial startup capital, daily operation and any projected challenge that may be experienced in actual running of the business. The critical aspects that uncle Ulrich need to consider in his venture would be articulated in the paper with the supporting information of the data analysis. The availability of the lump implies that amount of $450,000 is sufficient enough to start-up gourmet chocolates business. However, due to the market and marketing dynamics, it is critical that uncle Ulrich should have a better understanding of the market, its operation, and financial planning. Taking into account technological factors would be essential for an investor to consider the best options that the market offers the gourmet chocolate industry. The factors include the mode of promotions and innovations. The main goals and target for the establishment of the project is to assess uncle Ulrich new venture of arrangement of the gourmet chocolates and the development a financial plan to evaluate the investment and its practical viability.

Executive Summary

1.1 Gourmet Chocolates Business
Belgium’s gourmet chocolates are well-known for its different flavors that suit all customers’ needs. The needs and wants of the customers range from their health significance and other varieties. They are accounted for with moderation or being given as gifts. In order to succeed in starting up ‘gourmet chocolate business,’ uncle Ulrich should be able to provide the highest value at a competitive price in the market.
1.2. Description of Services and Products
The business should aim at establishing a strategic relationship with the party planners, family members, friends and the business employees. These efforts should be aimed at providing competitive market prices to allow sustainable growth. Uncle Ulrich gourmet chocolate business should be able to offer high-quality chocolate varieties such as truffles, turtles, chocolate fountains and custom molds. For customer satisfaction, the company should also consider such brands such as popcorn, candy and other baked good. Uncle Ulrich’s wife with a ‘business distinction’ should be able to provide better assistance to the company. Through her advice and analytical skills in business industry, she can help enhancing better service delivery and products in the company. The business will have to hire an independent contractor to assist in picking up packaging and delivery to orders to Ian, who a local customer is running delicatessens in Boston area.
1.3. Market
The market is very dynamic thus best market evaluation, and approach will enhance business growth in a competitive gourmet chocolate markets. The business innovativeness to enhance high-quality testing of chocolates will re-assure the success of the company in the immensely popular gourmet chocolates markets. Customers are always willing to pay any premium for the gourmet chocolates of great test treats with unique elements that fit their party or events. The target market of the business will be such individual events such as weddings, birthdays, showers, anniversaries and other special occasions. The company will enhance its operation to greater heights to target the corporate parties such as promotion celebrations, holiday parties and even ‘Friday treats.’ The segment of corporations has a larger entertainment budgets frequently as opposed to the individual parties. Thus, the gourmet chocolate business has higher potential of making most profits in the market under the corporations segment.
1.4. Financial Profile
The capital disposal is sufficient to establish a better and operational gourmet chocolates business. However, the evaluations of the current market and companies should be considered in defining better prices for the business. Taking into account that uncle Ulrich aspires to establish his gourmet chocolates business online factors such as SEO (Search Engine Optimization) expertise should be put into consideration. America is on the peak of technological liberty thus online is the best options uncle Ulrich has to market his business.
Basing the fact that uncle Ulrich does not have strong discounted cash flows analysis (DCF), it will be of great help of uncle Ulrich wife who was a distinction student to help out. The DCF formulae:
DCF= [cf1/ (1+r) ^1] + [cf2/ (1+r) ^2.. + [cf2/ (1+r) ^n
Where; CF = Cash Flow
R = discounted rate (WACC)

NB// {the formula was applied in getting the 1st, 6th and 12th months discounted cash flow of the business}

Description of the Business Summary
Mission Statement
The dynamics of the gourmet chocolate market are relatively high thus uncle Ulrich requires a better ‘mission statement’ that will define the core mission of the business to its customers. The grim environment of the gourmet chocolate market due to high competition better mission statement to uphold the business value will be necessary. The mission market should be market-oriented defining the business products and services. However, it is important for uncle Ulrich when formulating the mission statement for the business; it should be market-oriented statement that captures critical aspects of the business (Dunham-Taylor& Pinczuk, 2014). The mission should be realistic, and it should not be merely used for the public relations reasons but should provide workable guidelines for the organization. For instance, “we create delicious, tasty high-quality gourmet chocolates, using lofty technological innovations with the best ingredients and provide custom-made services”.

Business Model

It is critical to define the business plan with clarity and assurance to serve the customer better than the competitor in the same venture. The business aims at retailing gourmet chocolates to both individual customers and the corporate that will be based online. The major events such as individual birthday parties, wedding, business promotions celebration anniversaries and other special occasions will be the major target of the uncle Ulrich’s gourmet chocolates business. The business acknowledges the steep competition in the market, the combination of both quality and better customer service to enhance the long-term growth of the business and its success (Longbrake, 2010).

Business Strategy

The aim dream of uncle Ulrich is to have financial freedom despite the fact that he took early retirement. A good business strategy will be able to sustain growth assurance effectively with positive early cash flow that could fund any future growth of the business. The strategy that uncle Ulrich should employ must consist the following:
The strategy should attract profitable customers due to the quality of the gourmet chocolates and customer service that the business provides. Uncle Ulrich should avoid the strategy of winning customers through low price leader. The business should charge relatively fair prices and maintain the custom-made services to create satisfaction among customers.
The business should provide high-quality services to its customers at a price that customers are willing to pay. The ‘Nickel and Dime’ tactic for short term profit generation should not be involved in the business. It is advisable for the start-up business focus creating long term customers relationship especially with the word of mount that can enable long-term gains in terms of profit margins and the general growth of the business.

The Growth of the business in a smart way should be as a strategy.

SWOT Analysis
The SWOT analysis is a model that is used to evaluate the business’ Strengths, Weaknesses, Opportunities and Threats in the identification of a strategic niche the business can exploit. Uncle Ulrich should be able to understand the SWOT concept in order to improve operations and strategies to sustain growth and enhance profitability.

Strengths

High-quality recipes: in the efforts to create raving customers the gourmet chocolate business should have only the best recipe to make delicious, tasty high-quality gourmet chocolates.
Creativity or innovations: the approach of marketing materials and creation of gourmet chocolates, one needs to be creative. Creativity will enable the business to differentiate itself from others in the same industry.
Customer service: uncle Ulrich should provide better customer services in his gourmet chocolates business to differentiate it from other business in Boston with the same product.

Weaknesses:

If there was no better reputation established in the gourmet chocolates business. To avoid the bad reputation uncle Ulrich should create a better image from the start.
Entrenched competitors: as it is setting up a new business the already established gourmet chocolates brands, and customer base may control the larger share of the market.
Minimum entry barriers: the market is overcrowded due to low starting capital and other new competitors of gourmet chocolate with large networks. Thus, making the existence extremely competitive.

Opportunities:

create a well strategic relationship
after several months a positive cash flow can be realized
Gourmet chocolate popularity of such special occasions such as wedding is on the rise thus, an added edge advantage for the business.

Threats:

The gourmet chocolate business may grow at a rapid rate, but it should be controlled. Avoid purchasing expensive equipments at the start of the business wait until there is sufficient cash flow to pay for additional services.
The new competitors in the market undercut the business prices. However, if the business established solidified clients base, there is nothing much to worry.
3. Marketing Strategies for Gourmet Chocolates
A good marketing strategy will determine the success of any business especially in the gourmet chocolates business. A marketing strategy is the channel or a way that business use to facilitated the growth of the business targeting both the existing the potential customers. Basing that uncle Ulrich is setting up a new business using the 4Ps (product, place, price and promotion) to provide him with a better market view. The 4Ps market analysis will help uncle Ulrich to make any informed decision basing on the market dynamics (Paramasivan & Subramanian, 2009). The following marketing strategies can help to ensure greater organizational success for Telstra in the Australian telecommunications industry.
3.1. Price-Strategy Marketing
Price as a product aspect affects its demand in the market as it directly affects customer purchasing power. Price will further determine the margin profit that a business can obtain from its sells. Thus, for any marketing strategy it is crucial that uncle Ulrich should take the price as the basic concept of the marketing strategy of his gourmet chocolates business. Uncle Ulrich should aspire to keep the cost of the business operation low to enable him to offer affordable prices to his customers. As the gourmet chocolate business is very competitive, the price-oriented strategy will enhance uncle Ulrich to have an edge advantage as compared to his competitors. Offering competitive prices through the minimization of operation costs can help uncle Ulrich’s gourmet chocolates business to coagulate its market position. These will enhance the gourmet chocolates business to make more profits in the dynamic market thus enhancing cash flow and a momentum for growth.
3.2. Product-Strategy Marketing
Often n clients attach value to the product depending on the satisfaction that the product renders them after their usage (Belch, 2012, p.67). Uncle Ulrich needs to create a good image for the gourmet chocolate business through building on its good reputation. He should consider offering customers with product brands that offer self-expressive, emotional, and functional benefits with a variety to offer the basis of customer’s choice (Paramasivan & Subramanian, 2009). Despite the fact that Uncle Ulrich has a capital of $ 450,000 that is sufficient to start up gourmet chocolate business he faces numerous challenges. It may fail to realize any significant growth and success until the needs of its customers are identified. Therefore, products should be designed to meet the specific needs and test of the customers. It will boost the sales of the gourmet chocolates in the market thus realizing high returns of the invested capital within the minimum time possible.
3.3. Promotion-Strategy Market
In the modernized world, there are three factors are crucial when choosing the most effective promotion activities. The factors that uncle Ulrich should consider are such as a superficial expertise, dependability, and likeability (Longbrake, 2010). Promotion can be described as a communicative way that is used to educate, inform, and persuade a target market of a desired purchase level (Belch, 2012, p. 68). Often the promotion alters the customer’s decisions regarding evaluation, budget, and actual buying of gourmet chocolates (Paramasivan & Subramanian, 2009). Thus, promotion will enable gourmet chocolates business to communicate vital information to the U.S. market. Products uniqueness would grantee the business success in any market. Thus, it is crucial that product strategy marketing should be enhanced for the growth of the business.
3.4. Place-Strategy Marketing
Whereas basic human wants may be the same all over the world product standardization may not be applicable to all social set up in the society (Brassington & Pettitt, 2005, p.78). The environment shapes the perceptions of the customers towards gourmet chocolates business. Uncle Ulrich is based on the Boston metro area the study of the surrounded social class should be a key factor in demonstrating the promotion. Therefore, Uncle Ulrich should understand and evaluate the expectations of their American in Boston area. The evaluation will determine the type of gourmet chocolates that are likely to sell most at what particular time and in what quantity. It will further help in determining the cash flow nature that the business will receive at the end of the day.

Action Program

The above marketing requires the cooperation of ChocoBelg SA and uncle Ulrich for the gourmet chocolate business strategy to be effective. The production department (ChocoBelg SA) should try and establish competitive and quality products to the market. Uncle Ulrich should provide the necessary resources for the implementations of the strategies. He will also complement the whole process through creating customer relation for the product as part of the action program. The cost of the action program should not exceed the 10% of the total revenue of the company.
The action program can be adjustable with four phases to ensure that all strategies are effective in their implementation. These phases are: 1st phase formulation of the strategic plan that will take about the first month of the business. The second phase should take another one month that should involve selecting the projections of the strategic marketing project. Uncle Ulrich should provide necessary resources and the guidelines of the whole marketing project. The implementation of the entire marketing project of the business should take duration of four months to one year depending on the Boston metro area the base of the business.

Budgets

According to the annual financial projection, the marketing plan was estimated to an approximate of 15% in connection to the total revenue of the stipulated period. In addition, a financial breakdown shows that marketing expenses require 8% of the total revenue whereas market project and other emerging expense requires 5% and 2% respectively. The refection of the set budget is set to yield within the next four to five years. It would be attributed to the efforts of the gourmet chocolate business’s expansion plans to other markets.

Breakeven Analysis

The breakeven analysis should help uncle Ulrich to determine when his gourmet chocolates business will start or able to cover its own expenses thus beginning making profit. The intention of any business is to make profit hence the breakeven analysis is crucial of uncle Ulrich’s business.
Uncle Ulrich’s gourmet chocolates business will require a minimum of $5000 to start its first product sales, the $5000 will be able to pay or cove the business overhead expenses. Through estimation the retailing sell of goods worth $5000 will utmost give $3000 on wholesale, hence $5000 in sale will provide revenue of $2000 as gross profit. The amount is not enough to sustain the gourmet chocolates business that has just started. Uncle Ulrich will reach a breakeven point when his revenue is at equilibrium of the gourmet chocolates business cost.
Breakeven point =business fixed cost/ (selling price unit- Costs of variables)
For uncle Ulrich to attain a breakeven he should sell his gourmet chocolates at $ 66 per Kg for him to be able to attain the breakeven point. The business should offer the franchise at $5000.
On receiving a call from uncle Ulrich on Sunday morning of the offer of the company on a discount of 30% instead of 35%, it will enhance the gourmet chocolates business operational cost to be relatively low compared to its previous projections. The breakeven at this rate can be realized much early than anticipated in the long run of the business. Basing on the fact that uncle Ulrich’s gourmet chocolates business will be based majorly online the minimum starting capital for the business is $5,000 as the actual starting of the business.

Cash Flow Statement

Controls
After the strategies have been set forth and the budgets have been estimated, it is only logic that the company should manage and assess the performance of the whole project. The controls is would be set in place by incorporating regular reports on the website traffic that has been generated from the marketing strategy. The number of visit in the gourmet chocolate website developed with $ 2,000 can be accounted for when the site has maximum traffics and increased sales. Through the reports, the management can correctively correct and fill a gap during the development of the strategy and marketing plan. The measure of the marginal profits should increase in the case of success of the plan. In addition, it shows indicate how sustainable the plan is in the new market as well as better operating and strategic control (Iskandar & Hassan, 2014).

Contingency Planning and Conclusion

The gourmet chocolates business assessment and marketing strategy will be effective in its operational. The Marketing strategy will take up to the 10% of the total revenue from the business that counts after the expenditure has been deducted. Increasing of the marginal profits can be identified by evaluating the increase in revenue after the marketing plan, and gourmet chocolate business assessment has been implemented.

References

Belch, G., & Belch, M. (2012). Advertising and promotion: An integrated marketing communications perspective (9th ed.). New York: McGraw-Hill/Irwin.
Brassington, F., & Pettitt, S. (2005). Essentials of marketing. Harlow, England: Prentice Hall Financial Times, an imprint of Pearson Education.
Dunham-Taylor, J., & Pinczuk, J. Z. (Eds.). (2014). Financial Management for Nurse Managers. Jones & Bartlett Publishers.
Iskandar, T. M., Lasa, Y. M., & Abu Hassan, N. S. (2014). Financial management performance of public sector: quality of internal auditor.International Journal of Accounting, Auditing and Performance Evaluation,10(3), 229-254.
Longbrake, W. (2010). Financial Management of Banks and Bank Holding Companies. Financial Management, 10-10.
Paramasivan, C., & Subramanian, T. (2009). Financial management. New Delhi: New Age International (P).