SWOT Analysis分析-張家口茶葉市場計劃

Chapter 4 Marketing Plan

4.1 SWOT Analysis

In this section, the SWOT analysis has been employed to help business to evaluate the strengths, weaknesses, opportunities and threats involved in Sweet & Bitter. SWOT analysis is a marketing method for structured planning for businesses. The goal of Sweet & Bitter is to provide the finest premium tea and pastries at an accessible and affordable price to satisfy middle to upper-middle income residents and tourists of the Ancient Culture Street in a relaxed and quiet atmosphere. 

 

The population of Zhang Jiakou is 653,000, with 70,000 living within a 5 mile radius of Ancient Cultural Street. Of these 70,000 people, 38%, or 26,600, are between the ages of 26 and 50 - our target age group of tea. Given our upscale tea selection, and based on Zhang Jiakou census data for local income levels, we estimate that 3/4 of these people have pre-existing brand loyalties or economic constraints that would discourage them from visiting our tea house. For instance, the most famous tea retail shop is Zhang Yiyuan which monopolizes the tea retail market for years. Our local target market could be roughly 7,000 people. However, there are more than 10,000 students from two junior high schools and one senior high school near the street. This is the target group of Dutch desserts. Based on the study of tourist industry form Zhang Jiakou Tourist Administration, the domestic and international tourism markets in this city are rising day by day, and the tourism economy is rapid developing. From January to October in 2013, Zhang Jiakou received domestic and international tourists over 23.3037 million, with year on year growth 32.31%; besides, the tourism revenue was ￥15.632 billion, with 46.78% of year on year growth. Especially, in October, there were 2.327 million tourists from home and abroad, with 22% of year on year growth and the tourism revenue was￥1.558 billion, with 35.52% of year on year growth.#p#分頁標題#e#

 

Strength 

 

Chinese are believed to have enjoyed tea drinking for more than 4,000 years, and have formed the Chinese tea culture. Meanwhile, tea is helpful to physical fitness. 8 kinds of loose tea will be offered, including white tea, Oolong tea, red tea, black tea, green tea, fruit tea and flower tea. Tea will be served hot and iced; high quality loose tea is prepared for the locals. Also, Sweet&Bitter will offer daily Dutch pastries in order to accompany tea orders. Compare to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Moreover, Tea sets are important for Chinese tea culture showing the art and technique of tea, which mainly includes teacups, a tea board, warm pitcher, tea wash, a tea clip and a tea spoon. There are different materials of the tea sets, according to the characteristics of customers’ demand, bamboo tea sets, vitreous tea sets and white porcelain tea sets will be provided only. As souvenirs, limited price and easy to carry are the most considerable items. Added to this, Sweet & Bitter will offer a selection of pre-made gift baskets within pastries and teas based on different festivals, furthermore creative design gifts tend to satisfy students’ demand.

 

Weakness

 

It has been indicated that Zhang Yiyuan is the most famous tea house in Zhang Jiakou, they have built up strong brand loyalty and have a large number of loyalty customers as well. As a result, Zhang Yiyuan has taken most of the market share in Zhang Jiakou, it would be harder for new entrants in the tea house market to attract customers. As a new brand in Zhang Jiakou, it has been indicated that the brand name and brand loyalty of Sweet & Bitter is weak and it needs time to build up. 

 

Opportunity & Threat

 

The tea house is a highly competitive market in Zhang Jiakou. Zhang Yiyuan is the tea house who dominated the tea house market in Zhang Jiakou. As a famous local tea house, it has large competitive advantages in the market (Gardner, J.C. & McGowan,Carl B.,Jr, 2010). The requirement of the entrant to the tea house markets is relatively low.  It has been shown by evidence that tea house serves major portion in the non-alcoholic beverage market in Zhang Jiakou. More importantly, in Zhang Jiakou, Zhang Yiyuan has offered their promote their tea house largely on TV and local news paper. Even though the tea house market seems like very flourish, the quality concerns about tea in Zhang Jiakou is still a major barrier for tea house in Zhang Jiakou. In order to face the threat and take the opportunities in the tea houses in Zhang Jiakou, it is very crucial for Sweet & Bitter to capitalize on the market. Price strategy and marketing strategy are very important for the new tea house to be success in the industry.#p#分頁標題#e#

 

Strengths 

• Variety tea options for customers

• Daily Dutch pastries

• Personalized tea sets

• Gift baskets Weakness

• Low brand loyalty

• Low product differentiation

Opportunities

• High demand in local market

• Large annual sales Threats

• Threat of substitutes

• Threat of consumers switching to other products

 

Market Strategy

As a newly started tea house, it is very important for it to establish competitive advantage over other tea houses. Also, the ability to successfully differentiate new products with existing products is very crucial. The degree of competition is high in the drink shops is monopolistic. In order to face the threats from large franchised drink shops, appropriate price strategy and cost strategy should be employed (Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009).

Firstly, in the drink shop market in Zhang Jiakou, buyers have power over suppliers as they identify tea houses by their brand name and they are less likely to be price sensitive. Brand loyalty for customers is very special, for example, the loyal customer for Zhang Yiyuan (the most famous local tea house) can taste the difference between Zhang Yiyuan and other tea house. More importantly, tea can be seen as normal goods in Zhang Jiakou, the price is almost the same among different brands. The buyers have dominated power in the market as they have brand preferences. Also, the consumers for tea and Dutch pastries are mainly tea houses. Added to this, it should be acknowledged that the threat of substitutes in the soft drink industry is relatively high as the fixed cost for starting a tea house is cheap (Calef, R.H. 1992). As a result, the barriers to entry the industry is lower for new entrants. On the other hands, the power of supplier is not as substantial as buyers, as the majority of inputs are normal commodities.

 

Position Strategy

More importantly, for customers who do not have brand loyalty or brand preference, they will select the tea house with the most competitive,most reasonable price along with the best environment. Added to this, it should be noted that there have been many other substitutes in the market as well, such as coffee, soft drinks and other non-carbonated drinks in the market. The price strategy should be used carefully to avoid loss in sales.#p#分頁標題#e#

 

Moreover, the tea and Dutch pastries of Sweet & Bitter tea house are designed to be expensive and luxury products in the market with great flavor and taste as those favorite and popular products. As the tea house market in Zhang Jiakou is highly concentrated, the top two players yield 70.5% of the total sales.  In order to make the products more valuable to customers, the package of the gift sets and design for the tea house may be luxury as it will make the tea house more luxury and special compare to other tea houses in Zhang Jiakou.

 

The Opportunity Matrix (Ansoff, H,. 1957)

Existing Products New Products

Existing Markets Division I Division III

New Markets Division II Division IV

 

From above opportunity matrix table, it has been shown that the new tea house to the market is aimed to attracting new customers from people who do not drink tea and who do not eat Dutch pastries before and take customers from the existing market as well (Davie, P. 1995).

 

Points of differentiation

Sweet & Bitter will offer daily Dutch pastries in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Sweet & Bitter will offer daily Dutch pastries  in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers.

 

Moreover, Sweeter & Bitter has employed the USP theory which is the Unique Selling Proposition. It is introduced by Rosser Reeves (1953) in last 50s. By USP theory, it means that it is very essential for Sweet & Bitter to promote their special functions of products for consumers. Therefore, for Tea provide in Sweet & Bitter, all of the tea are selected carefully to ensure the quality. More importantly, the Dutch pastries are made by import ingredients and the receipts. As a result, the high quality of the tea and the authentic of Dutch pastries would help Sweet & Bitter different from other tea houses in Zhang Jiakou.

 

Pricing Strategy

Depending on pricing regulation of Price Bureau of Zhang Jiakou together with the cost and market, Sweet & Bitter, price is the most important factor for marketing new products. It should be acknowledged that no matter at what content consumers prefer the products, they would always make buy decision according to their purchasing ability. Currently, it has been shown that the purchasing power of Chinese residents havehas become stronger and stronger. Therefore, the pricing strategy for Sweet & Bitter is high pricing strategy. The average price for Tea in Zhang Jiakou is at ￥50-100 per pot. For our tea, we set price at range of ￥40-200. By using this pricing strategy, the price range for the products in Sweet & Bitter has included lower price products which are lower than other tea houses and higher price products which are higher than other tea houses. As a result, consumers in all range can be satisfied according to their purchasing power. And more importantly, no matter which product consumers purchase, they will receive the same quality service.  #p#分頁標題#e#

Sales process and promotion mix

The promotion for the new products in the market will contribute heavily as well. Since the tea house market is very competitive in Zhang Jiakou market, Sweet & Bitter tea house should stimulate sales through a series of incentive marketing techniques. Specifically, the promotion for consumers in different locations such as convenience store and supermarket is a good choice. Cash-back for a specific amount consumed and etc. Also, bundling sale is a good promotion strategy as well for new products in the market. Together with all tea and Dutch pastries products available, Sweet & Bitter can sell a bundle at a good price for their consumers (Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012). 

 

Through effective promotion strategy, the products information can be delivered to consumers in order to stimulate their purchasing willingness. As a result, the market wouldcould be expanded. It has been indicated that advertisements have played a role of bridge between products and consumers. Traditionally, consumers know the products through advertisements firstly. Advertisement is the most often used promotion tools for most businesses.  Even though it is very expensive, aAdvertisements can bring information visually to customers; the coverage of advertisements is large as well. Therefore, Sweet & Bitter we would use Advertising (print, broadcast, Internet), Brochures & collateral materials, "Customer experience" enhancements and Directories as our main promotion strategies (as shown in the Table 4.3). 

 

Activity Appropriate Maybe Not Appropriate Top Priority?

Advertising (print, broadcast, Internet) √ √

Alliances √

Annual reports & reviews √

Associations √

Book and publication writing √

Brochures & collateral materials √

Customer advisory boards#p#分頁標題#e# √

"Customer experience" enhancements √

Customer surveys √

Direct mail √

Directories √

Event sponsorships & trade shows √

Internet-based marketing √

Newsletters √

Promotional giveaways √

Press relations campaign √

Pricing strategies √

Referral sources campaign

Seminars & public speaking

Signage (vehicle, office, roadside)

Trade shows

Yellow Pages TM

Website - unique domain/development

Table 4.3

 

Compare the local cost for advertising to the budget of Sweet & Bitter, the estimated costs for the top priority marketing techniques from the above list have been shown in the following Table 4.4. It has been indicated that the estimated cost for Advertising (print, broadcast and Internet) is €￥3,500, for Brochures & collateral materials is €￥2,000, for 'Customer experience' enhancements is €￥1,000 and for Directories is €￥1,500. All of the staffs relates to marketing techniques for Sweet & Bitter tea house is managed by Henry, the store manager. #p#分頁標題#e#

Top Priority Marketing Techniques

(from above list) Steps needed to implement Estimated Costs Timing / Deadlines Person Responsible 

1.Advertising (print,broadcast, Internet) Design advertisements and contact printer companies €RMB 3500 December Henry

2.Brochures & collateral materials Contact printer companies €RMB 2000 December Henry

3."Customer experience" enhancements Build online board for customer communication € RMB 1000 December Henry

4.Directories Contact city community €RMB 1500 December Henry

Table 4.4

Chapter 5 Financial analysis (I have not collected enough exact data to finish the following statement yet)

5.1 Start up Expenses 

Total Start-Up Cash Needed

Sweet &Bitter is a new company and the equipment account for a large part in our beginning needs. And our financing will come from two partners’ capital and a short period loan. Long-term assets, short-term assets and other suppliers are initial budget as followed. 

Equipment for pastry:

Double layer within four single controlling sets oven (RQL-Y-2)         €4998RMB625

Waffle maker (UWB-2)

€800RMB100

Blender for eggs, flour and cream (HM-980)

€900RMB112.5 

Refrigerators double-door (GD1.0L4S)

€9757800RMB

Others

€3753000RMB

Tea equipments

Tea racks

€17000RMB2125

Hot water and steam machine 

€7506000RMB

Dishwasher #p#分頁標題#e#

€9757800RMB

Coffee maker

€722.55780RMB

Other appliances

€3753000RMB

Iced shaker

€162.51300RMB

Furniture

About €40,000RMB5000

Expensed supplies €1000RMB125

Napkins, stirrers, cleaning supplies, tasting cups 

5.2 Assumptions sheet 

Total Startup Cash Needed (to Make First Sale)

Capital Investments Amount(€RMB)

 

Property(rental for half year) 42,0005,250

Furniture and fixtures 99,40012,425

Computer and music equipment 8,0001,000

Other equipment 10,0001,250

159,40019,925

 

Operating Expenses Amount

Legal, accounting, and professional services 10,0001,250

Advertising and promotions 8,0001,000

Licenses and permits 30,000d3,750*0.08% *24

Prepaid insurance 2,000250

Salary and wages 62550,000

Tools and supplies 2,000250

Starting inventory 8,0001,000

Cash (working capital) 3,000375

Other expense 1 10,0001,250

Other expense 2 1,25010,000

Total Startup Cash Needed = 260,40032,550

Table 5.2

Total Startup Cash Needed (to Make First Sale) for Sweet & Bitter has been shown in the Table 5.2. All the numbers are projected in order to make the Startup cash table. The real numbers may be varied from the table when implement the plan. 

 

Pro forma financial statements 

The projected annual sales based on the current economic environment in Zhang Jiakou have been shown in the following Table 5.3 for the first three years. It has been shown that according to Table 5.3, the annual sales for all kind of products would increase from year to year as more and more consumers would choose to try Sweet & Bitter. #p#分頁標題#e#

Annual sales

Year 1 Year 2 Year 3

Sales

Hot Tea ￥52,400 ￥62,000 ￥66,000 

Iced Tea ￥22,400 ￥24,000 ￥25,500 

Dutch Pastries ￥14,400 ￥15,000 ￥16,000 

Tea Sets ￥3,000 ￥3,200 ￥3,400 

Gift Baskets ￥3,895 ￥4,000 ￥4,200 

Loose Teas ￥10,150 ￥10,920 ￥13,104 

Total Sales ￥194,245 ￥211,120 ￥228,204 

 

Annual sales

Year 1 Year 2 Year 3

Sales

Hot Tea €6,550 €7,750 €8,250

Iced Tea €2,800 €3,000 €3,188

Dutch Pastries €1,800 €1,875 #p#分頁標題#e#€2,000

Tea Sets €375 €376 €377

Gift Baskets €487 €500 €525

Loose Teas €1,269 €1,365 €1,638

Total Sales €13,281 €14,866 €15,978

Units 11,068 12,388 13,315

 

Table 5.3

Based on Table 5.3, the income statement for Sweeter & Bitter has been shown in the following Table 5.3a:

Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015

Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 

Year

Sales

> >Opening inventory 8,000 3,000 5,500 5,600

> > + Purchases (direct materials) 10,000 20,000 20,000 20,000

> > + Production wages* 85,000 90,000 91,000 91,000 #p#分頁標題#e#

. > . - Closing inventory 3,000 5,000 4,800 5,200

(Less) Cost of goods sold (COGS) 5,000 5,500 5,600 5,500

Gross profit (or income) 95,000 102,500 106,100 105,900 409,500

-

Expenses

Amortization expense 3,000 3,000 3,000 3,000 12,000

Advertising & marketing 2,000 2,000 2,000 2,000 8,000

Bad Debts 0 0 0 0 0

Insurance 500 500 500 500 2,000

Interest expense 500 500 500 500 #p#分頁標題#e#2,000

Maintenance 2,000 2,000 2,000 2,000 8,000

Management fees 1,000 1,000 1,000 1,000 4,000

Office expenses 1,000 1,000 1,000 1,000 4,000

Rent or mortgage interest 21,000 21,000 21,000 21,000 84,000

Salary - owner 5,000 10,000 10,000 15,000 40,000

Storage 3,000 3,000 3,000 3,000 12,000

Travel (other) 0 500 780 1080 2,360

Utilities 1,000 1,200 1,260 1,380 4,840

Vehicle expenses 1,000 1,000#p#分頁標題#e# 1,000 1,000 4,000

Wages (staff) 12,500 12,500 12,500 12,500 50,000

Total expenses 53,500 59,200 59,540 64,960 237,200

Earning (or loss) before taxes 41,500 43,300 46,560 40,940 172,300

. . Less Income Taxes 8,300 8,660 9,312 8,188 34,060

Net Earnings (or loss) 33,200 34,640 37,248 32,752 137,840

 

Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015

Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 

Year

Sales

> >Opening inventory 1,000 375 688 700

> > + Purchases (direct materials)#p#分頁標題#e# 1,250 2,500 2,500 2,500

> > + Production wages* 10,625 11,250 11,375 11,375

. > . - Closing inventory 375 625 600 650

(Less) Cost of goods sold (COGS) 625 688 700 688

Gross profit (or income) 11,875 12,813 13,263 13,238 51,188

-

Expenses

Amortization expense 375 375 375 375 1,500

Advertising & marketing 250 250 250 250 1,000

Bad Debts 0 0 0 0 0

Insurance #p#分頁標題#e#62.5 62.5 62.5 62.5 250

Interest expense 62.5 62.5 62.5 62.5 250

Maintenance 250 250 250 250 1,000

Management fees 125 125 125 125 500

Office expenses 125 125 125 125 500

Rent or mortgage interest 2,625 2,625 2,625 2,625 10,500

Salary - owner 625 1,250 1,250 1,875 5,000

Storage 375 375 375 375 1,500

Travel (other) 0 62.5 97.5 135 #p#分頁標題#e#295

Utilities 125 150 158 173 605

Vehicle expenses 125 125 125 125 500

Wages (staff) 1,563 1,563 1,563 1,563 6,250

Total expenses 6,688 7,400 7,443 8,120 29,650

Earning (or loss) before taxes 5,188 5,413 5,820 5,118 21,538

. . Less Income Taxes 1,038 1,083 1,164 1,024 4,258

Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230

 

Table 5.3a

5.3.1 Opening Day Balance Sheet (beginning of the year) 

Table 5.3.1 has shown the opening day balance sheet (beginning of the year) based on the start up expense and assumption sheet for Sweet & Bitter. 

 

Assets Liabilities

Current Assets#p#分頁標題#e# Current Liabilities

Cash in bank 50,000 Accounts payable 5,000

Accounts receivable 0 Short-term loans 0

Inventory 8,000 Other payments due in 12 months 10,000

Cash in (item 1) VAT(BTW)owing 0

Cash in (item 2) VAT(BTW) collected on sales 0

Total current assets 18,000 Less ITC (deductables) (0)

Net amount payable or (refundable) 15,000

Total current liabilities 15,000

 

Fixed Assets Long-term Liabilities

Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000

Buildings 0 Mortgage 0

Less amortization 0 Total long-term liabilities 100,000

Net land & buildings 99,400

Total Liabilities (L) 115,000

Computer and music Equipment 8,000 #p#分頁標題#e#

Less amortization 0 Owners' Equity

Net equipment 8000 Investment 60,400

Retained Earnings 0

Other Equipment 10,000

Less amortization 0 Total owners' equity (E) 60,400

Net vehicles 10,000

Total Assets (A) 175,400 Total liabilities and equity (L+E) 175,400

 

 

Assets Liabilities

Current Assets Current Liabilities

Cash in bank 6,250 Accounts payable 625

Accounts receivable 0 Short-term loans 0

Inventory 1,000 Other payments due in 12 months 1,250

Cash in (item 1) VAT(BTW)owing 0

Cash in (item 2) VAT(BTW) collected on sales 0

Total current assets 2,250 Less ITC (deductables) #p#分頁標題#e#0

Net amount payable or (refundable) 1,875

Total current liabilities 1,875

 

Fixed Assets Long-term Liabilities

Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500

Buildings 0 Mortgage 0

Less amortization 0 Total long-term liabilities 12,500

Net land & buildings 12,425

Total Liabilities (L) 14,375

Computer and music Equipment 1,000

Less amortization 0 Owners' Equity

Net equipment 1000 Investment 7,550

Retained Earnings 0

Other Equipment 1,250

Less amortization 0 Total owners' equity (E) 7,550

Net vehicles 1,250

Total Assets (A) 21,925 Total liabilities and equity (L+E) 21,925

 

Table 5.3.1

 

5.3.2 Profit and Loss projection (12 months) 

 

Table 5.3.2 has shown the Profit and Loss projection for next 12 months based on the Performa statement and assumption sheet.

 

Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015

Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 

Year

Sales

> >Opening inventory 1,000 375 688 700

> > + Purchases (direct materials) 1,250 2,500 2,500 2,500

> > + Production wages* 10,625 11,250 11,375 11,375

. > . - Closing inventory 375 625 600 650

(Less) Cost of goods sold (COGS) 625 688 700 688

Gross profit (or income) 11,875 12,813 13,263 13,238 #p#分頁標題#e#51,188

-

Expenses

Amortization expense 375 375 375 375 1,500

Advertising & marketing 250 250 250 250 1,000

Bad Debts 0 0 0 0 0

Insurance 62.5 62.5 62.5 62.5 250

Interest expense 62.5 62.5 62.5 62.5 250

Maintenance 250 250 250 250 1,000

Management fees 125 125 125 125 500

Office expenses 125 125 125 125 500

Rent or mortgage interest #p#分頁標題#e#2,625 2,625 2,625 2,625 10,500

Salary - owner 625 1,250 1,250 1,875 5,000

Storage 375 375 375 375 1,500

Travel (other) 0 62.5 97.5 135 295

Utilities 125 150 158 173 605

Vehicle expenses 125 125 125 125 500

Wages (staff) 1,563 1,563 1,563 1,563 6,250

Total expenses 6,688 7,400 7,443 8,120 29,650

Earning (or loss) before taxes 5,188 5,413 5,820 5,118#p#分頁標題#e# 21,538

. . Less Income Taxes 1,038 1,083 1,164 1,024 4,258

Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230

 

Table 5.3.2

 

It has been shown that Sweet & Bitter has positive net earnings in the first quarter to the fourth quarter. And the net earnings have shown an increasing trend overall. In the first 12 months, it has been shown that the net earnings is €￥137,840. 

 

Cash flow (12 months) 

Cash Flow Statement for a Small Business

12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Receipts (Cash In)

Cash sales 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,838#p#分頁標題#e#

Collections from accounts receivable 0 0 0 0 0 0 0 0 0 0 0 0

Owners' capital 0 0 0 0 0 0 0 0 0 0 0 0

Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 10,000,250

Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 #p#分頁標題#e#0 0

Other cash received (specify) 0 0 0 0 0 0 0 0 0 0 0 0

Total Cash In 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,8385,088

 

Cash Disbursements (Cash Out)

Advertising & promotion expense 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67

Bank charges & interest 166.67 166.67 166.67 166.67 166.67 #p#分頁標題#e#166.67 166.67 166.67 166.67 166.67 166.67 166.67

Business licenses & permits 24 24 24 24 24 24 24 24 24 24 24 24

Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0

Equipment Payments 0 0 0 0 0 0 0 0 0 0 0 0

Government Remittances (taxes, VAT, etc) 0 0 0 #p#分頁標題#e#0 0 0 0 0 0 0 0 0

Interest expense 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67

Insurance 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67

Loan/line of credit payments 0 0 0 0 0 0 0 0 0 0 0 10,000

Management salaries (owners draw) #p#分頁標題#e#1,000 1,000 3,000 3,000 3,000 4,000 3,500 3,500 3,000 5,000 5,000 5,000

Office supplies & expenses 400 400 200 300 300 400 450 250 300 350 350 300

Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250

Professional fees (accounting, legal) 1,000 1,000 1,000 1,000

Rent or mortgage payment 21,000 21,000 21,000 21,000

Repairs & Maintenance#p#分頁標題#e# 300 300 300 300

Storage 3,000 3,000 3,000 3,000

Telephones/communications 500 500 500 500

Travel 0 580 780 1,080

Utilities 1,000 1,200 1,260 1,380

Vehicle expenses 1,000 1,000 1,000 1,000

Wages & salaries (staff) 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67

Total Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4#p#分頁標題#e# 10357.4 38747.4 11957.4 11959.4 51167.4

 

Cash Flow Summary

Opening Balance 50,000 69,993 88,986

81,378

101,471

121,564

111,976

131,919

151,562

143,314

161,457

179,700

 

Add: Cash In 28,000 27,000 30,000 30,000 30,000 30,000 30,500 30,000 30,500 30,100 30,200 30,700

Subtract: Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4 10357.4 38747.4 11957.4 11959.4 51167.4

Closing cash balance - surplus or (deficit) 69,993 88,986

81,378

101,471

121,564

111,976

131,919

151,562

143,314

161,457

179,700

159,232

 

Cash Flow Statement for a Small Business

12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Receipts (Cash In)

Cash sales 438 422 469 469 469 469 477 469 477 470 472 480

Collections from accounts receivable 0 0 0 0 0 0 0 0 #p#分頁標題#e#0 0 0 0

Owners' capital 0 0 0 0 0 0 0 0 0 0 0 0

Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 1,250

Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 0 0

Other cash received (specify) 0 0 0 0 0 0 0 #p#分頁標題#e#0 0 0 0 0

Total Cash In 438 422 469 469 469 469 477 469 477 470 472 1,730

 

Cash Disbursements (Cash Out)

Advertising & promotion expense 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375#p#分頁標題#e# 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375

Bank charges & interest 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375

Business licenses & permits 3 3 3 3 3 3 3 3 3 3 3 3

Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0

Equipment Payments 0 0 #p#分頁標題#e#0 0 0 0 0 0 0 0 0 0

Government Remittances (taxes, VAT, etc) 0 0 0 0 0 0 0 0 0 0 0 0

Interest expense 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375

Insurance 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375#p#分頁標題#e#

Loan/line of credit payments 0 0 0 0 0 0 0 0 0 0 0 1,250

Management salaries (owners draw) 125 125 375 375 375 500 438 438 375 625 625 625

Office supplies & expenses 50 50 25 37.5 37.5 50 56.25 31.25 37.5 43.75 43.75 37.5

Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 #p#分頁標題#e#1,250 1,250 1,250 1,250

Professional fees (accounting, legal) 125 125 125 125

Rent or mortgage payment 1,250 1,250 1,250 1,250

Repairs & Maintenance 37.5 37.5 37.5 37.5

Storage 375 375 #p#分頁標題#e# 375 375

Telephones/communications 62.5 62.5 62.5 62.5

Travel 0 72.5 97.5 135

Utilities 125 150 158 173

Vehicle expenses 125 #p#分頁標題#e#125 125 125

Wages & salaries (staff) 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338

Total Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669

 

Cash Flow Summary #p#分頁標題#e#

Opening Balance 6,250 8,749 11,123 10,172 12,684 15,196 13,997 16,490 18,945 17,914 20,182 22,463

 

Add: Cash In 438 422 469 469 469 469 477 469 477 470 472 480

Subtract: Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669#p#分頁標題#e#

Closing cash balance - surplus or (deficit) 8,782 11,266 16,012 12,973 15,485 20,331 16,887 19,347 23,984 20,973 23,242 29,057

 

Projected balance sheet (end of year)

Assets Liabilities

Current Assets Current Liabilities

Cash in bank 1,898,408 Accounts payable 625

Accounts receivable 0 Short-term loans 0

Inventory 1,000 Other payments due in 12 months 1,250

Cash in (item 1) VAT(BTW)owing 0

Cash in (item 2) VAT(BTW) collected on sales 0

Total current assets 24,730 Less ITC (deductables) 0

  Net amount payable or (refundable) #p#分頁標題#e#1,875

  Total current liabilities 1,875

 

Fixed Assets Long-term Liabilities

Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500

Buildings 0 Mortgage 0

Less amortization -1,250 Total long-term liabilities 12,500

Net land & buildings 11,175

  Total Liabilities (L) 14,375

Computer and music Equipment 1,000

Less amortization -62.5 Owners' Equity

Net equipment 938 Investment 7,550

  Retained Earnings 17,230

Other Equipment 1,250

Less amortization -188 Total owners' equity (E) 24,780

Net vehicles 1,063

Total Assets (A) 39,155 Total liabilities and equity (L+E) 39,155

   

Assets Liabilities

Current Assets Current Liabilities

Cash in bank 1,898,408 Accounts payable 625

Accounts receivable 0 Short-term loans 0

Inventory 1,000 Other payments due in 12 months 1,250

Cash in (item 1) VAT(BTW)owing 0

Cash in (item 2) VAT(BTW) collected on sales 0

Total current assets 24,730 Less ITC (deductables) 0

  Net amount payable or (refundable) 1,875

  Total current liabilities#p#分頁標題#e# 1,875

 

Fixed Assets Long-term Liabilities

Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500

Buildings 0 Mortgage 0

Less amortization -1,250 Total long-term liabilities 12,500

Net land & buildings 11,175

  Total Liabilities (L) 14,375

Computer and music Equipment 1,000

Less amortization -62.5 Owners' Equity

Net equipment 938 Investment 7,550

  Retained Earnings 17,230

Other Equipment 1,250

Less amortization -188 Total owners' equity (E) #p#分頁標題#e#24,780

Net vehicles 1,063

Total Assets (A) 39,155 Total liabilities and equity (L+E) 39,155

Assets Liabilities

Current Assets Current Liabilities

Cash in bank 189,840 Accounts payable 5,000

Accounts receivable 0 Short-term loans 0

Inventory 8,000 Other payments due in 12 months 10,000

Cash in (item 1) VAT(BTW)owing 0

Cash in (item 2) VAT(BTW) collected on sales 0

Total current assets 197,840 Less ITC (deductables) (0)

Net amount payable or (refundable) 15,000

Total current liabilities 15,000

 

Fixed Assets Long-term Liabilities

Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000

Buildings 0 Mortgage 0#p#分頁標題#e#

Less amortization (10,000) Total long-term liabilities 100,000

Net land & buildings 89,400

Total Liabilities (L) 115,000

Computer and music Equipment 8,000

Less amortization (500) Owners' Equity

Net equipment 7,500 Investment 60,400

Retained Earnings 137,840

Other Equipment 10,000

Less amortization (1,500) Total owners' equity (E) 198,240

Net vehicles 8,500

Total Assets (A) 313,240 Total liabilities and equity (L+E) 313,240

 

Ratio analysis 

Current Ratio = Current Assets / Current Liabilities = 197,84024,730/1,87515,000 = 13.19

Current ratio has been used to measure the liquidity of Sweet & Bitter. It has been shown that the current ratio for Sweet & Bitter is 13.19 which mean the liquidity of Sweet & Bitter is good. 

 

Debt - Equity Ratio = Total Liabilities / Shareholders' Equity = 14,37515,000/24,780198,240 = 0.580105

 

Debt - Equity ratio is the leverage ratio which is used to measure the relationship between obligations for suppliers, creditors, lenders and suppliers and what the shareholders have committed. 

 

Gross Profit Margin = Gross Profit / Net Sales = 137,840 / 409,500 = 33.66%

 

From the ratio analysis, it has been shown that Sweet & Bitter has the ability to repay their liabilities with good return for investors. #p#分頁標題#e#

Break Even Analysis 

In this part, the break even analysis has been used to measure the business performance of Sweet & Bitter. By using break even analysis, the break even point is in compare the dollar units to the revenue. It is useful to analyze the pricing strategy for Sweet & Bitter as well. 

Break-even analysis depends on the following variables: 

• Selling price per unit: The amount of money charged to the customer for each unit of product or service.

• Total fixed costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.

• Variable unit cost: Costs that vary directly with the production of one additional unit. 

• Total variable cost: The product of expected unit sales and variable unit cost, i.e. expected unit sales times the variable cost.

Each of these variables is interdependent on the break-even point analysis. If any of the variables changes, the results may change. 

Total Cost: The sum of the fixed cost and total variable cost for any given level of production, i.e., fixed cost plus total variable cost. 

Total Revenue: The product of forecasted unit sales and unit price, i.e., forecasted unit sales times unit price. 

Q = FC / (UP - VC)

where: 

Q = Break-even Point, i.e., Units of production (Q), 

FC = Fixed Costs 

VC = Variable Costs per Unit 

UP = Unit Price 

Therefore, 

Break-Even Point Q = Fixed Cost / (Unit Price - Variable Unit Cost) = 159,40019,92511,175 / (194,24524,280/50,000 -101,00012,625/50,000) =85,47328,471 units

Therefore, the break-even point quantity for Sweet & Bitter is 85,473 units. It means that Sweet & Bitter has to sell 85,474 units of products in order to reach the break even point. At this point, Sweet & Bitter would product a zero profit, but it can cover all the cost. It means that Sweet & Bitter would make profit as long as it can sell any units more than 85,47328,471 units. From the forecast sales, it has been shown that in the first three years, Sweet & Bitter can sell 36,771 units. It means that it cannot break even in the first three years. Therefore, the company should lower their costs or try to increase their sales in order to achieve the break even point. 

Units 11,068 #p#分頁標題#e#12,388 13,315

Year 1 2 3

 

Implementation Plan & Timeline

 

Timescale For Workshop Project - SAMPLE

 

Task #/Name Person 

Responsible Month of Action for Task Assigned

Sept Oct Nov Dec

Finalize planning permission Joe X

Apply for loan Jane X

Finalize suppliers Susan X

Liase with local building inspector Henry X

Seek Builders Joe X

Tender Information Joe X

Supervise Builders Joe X

Plan shop and interior design Jane /Susan X

Marketing materials created and distributed Henry X

 

Reference List文獻
 

Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012, "IMPACT OF CHANNEL STRATEGY ON CUSTOMER VALUE OF KENYAN SOFT DRINK COMPANIES", Interdisciplinary Journal of Contemporary Research In Business, vol. 3, no. 9, pp. 1259-1266.#p#分頁標題#e#

Calef, R.H. 1992, "In Search of a Soft Drink Strategy", Beverage World, vol. 111, no. 1517, pp. 40.

Davie, P. 1995, "New product development - the alcoholic soft drink market", International Journal of Wine Marketing, vol. 7, no. 3, pp. 49-59.

Gardner, J.C. & McGowan,Carl B.,,Jr 2010, "A Note on the Regional Triad Model and The Soft Drink Industry", Multinational Business Review, vol. 18, no. 1, pp. 89-94.

Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009, "PROMOTIONS AS COOPETITION IN THE SOFT DRINK INDUSTRY",Academy of Marketing Studies Journal, vol. 13, no. 1, pp. 105-133.