Big 4 Snacks – Business Plan

Big 4 Snacks Business Plan   

 

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

Cite this page