ASSIGNMENT 2 NEW VENTURE – LAUNCH PLAN 9
Running Head: ASSIGNMENT 2 NEW VENTURE – LAUNCH PLAN 1
Assignment 2 New Venture – Launch Plan
Veronica Mccullough
JWI 575: New Business Ventures and Entrepreneurship
Linda Liebert-Hall
August 15, 2021
Assignment 2 New Venture – Launch Plan
Introduction
Business management requires using the ideal interventions and strategies to foster success. When introducing a new product or service, the management teams must understand the current market trends influencing their operations. One of the issues that may influence business success concerning meeting the growing consumer demands is creating reliable strategies for communication, alignment and envisioning the projected trends that are likely to be encountered focusing on the markets. Understanding the market and the potential gaps that have been realized allows the management teams to create the ideal framework for evaluating the efficacy of the existing strategies in accomplishing the intended goals. This project is based on the new venture by Area Blue Technology that will focus on establishing a new business that will target consulting in the supply chain and logistics sector. The entrepreneurial project will allow the business to target numerous businesses providing consultation services and interventions for their supply chain operations and tasks. The firm will target international businesses with an additional focus on those dealing with logistics. This business is set to provide a foundation for earning higher revenues where the firm will guarantee sustainability. Its success will depend on resource availability and provision to ensure maximum operational efficiency in its core frameworks.
New concept launch strategy
This idea is focused on establishing a reliable business entity that will extend its services and expertise to the underlying firms. The business following the funding seeks to accomplish numerous objectives.
To establish a consulting business that will advise and recommend solutions to entrepreneurs and firms dealing with supply chain and logistics tasks.
To create a new business model that supplements the existing firms in fostering efficiency in their supply chain networks through leveraging technologies.
To establish a foundation for earning revenue through knowledge leverage and technologies adoption in researching supply chain and logistical solutions.
The firm will focus on the supply chain, logistics and product introduction processes. These processes face diverse challenges since they require constant market analysis and monitoring. In addition, entrepreneurs and businesses may not have sufficient resources and expertise to venture into product and supply chain research hence may require additional assistance. The firm will offer this assistance focusing on supply chain management, logistics coordination, and new product introduction processes (Deelmann, 2018). This solution will be integrated into a single consulting business model. The primary focus will be to leverage knowledge, expertise and technological capital in providing solutions facing business entities when undertaking their daily tasks.
The firm will establish a reliable foundation for attracting to accomplish the mentioned objectives. These objectives will be accomplished through strategic marketing, funding and market research. Funding the project will allow the firm to allocate the necessary resources needed to accomplish its intended purposes. Additionally, providing sufficient insight into the market trends and consumer expectations through research will empower the management to determine the potential weaknesses. From another dimension, the business will implement the idea in the next five months. The firm will research the market to determine pertained details about the consumers and their preferences during this time. Additionally, the duration will allow the management to create reliable plans ranging from resources allocation, financing, and office space creation and marketing (Honig & Samuelsson, 2021).
Impact on the business model
In planning, the management must first understand the best business structures to implement to meet the intended goals. This idea will be implemented under the limited liability company. This business model will allow the firm to leverage the benefits offered through a partnership and a corporate structure. This model will provide the owners with the ideal framework for allocating resources to support a common goal (Eriza, Azheri & Fauzi, 2019). Additionally, the model will protect the owners against liabilities if a lawsuit or bankruptcy occurs. The firm has selected this model because it offers numerous benefits in the business setting. The primary benefit is that it is best suited for medium and high-risk entities. Its composition makes it easy to manage and coordinate. However, if members leave, some states require an LLC to be dissolved and reformed. Its establishment is governed by the federal, state and county governments. LLCs must fulfil numerous requirements before registration. These requirements are operating agreement, certificate of a limited partnership, limited partnership agreement, article of incorporation and bylaws (Aspan, 2017).
Launching this business will require the firm to conduct sufficient market research, obtain the requirements and certifications, allocate finances and establish an operating location. Additionally, the firm must market its presence, outlining its products and services, nature, prices, and value. The key resources defining the business are office space, finances and people. In addition, the firm offers consultations; hence consumer interactions are the primary services. Additional resources will include office supplies and travel mechanisms. The people will include the CEO, president, finance/accounts, operations/research, customer service and marketing. The consumers will access the services in two broad ways. The first way is through the physical office location. The second way is through online consultations. The firm will maintain these channels to maximize consumer interactions.
Revenue streams
One of the issues that will inform the business success is collecting the relevant resources and finances to support its core goals. The business will gather its revenue from selling consultation services. The consultations will depend on the services sought. The firm will provide two main services: general insight into supply chain operations and product promotion throughout the development and delivery processes. These services will be charged at $500 and $1000 for every session in each category. The finances collected will be used in expanding the business while meeting its operational costs. The consumers currently pay for the services offered in cash. The firm will use the same model in collecting revenue from its consumers. The income statement attached shows the breakdown of the revenues and costs, outlining their distribution within the firm and its core requirements. As the income statement shows, the firm will earn a loss in the first year of operation, followed by positive returns in the subsequent financial periods. This statement shows that the business is viable and will likely record increasing sales and revenues.
Financial structure and costs
From the income statement above, one of the issues recorded is the initial total sales. It is projected that the firm will sell services worth $150000 in the first year. This figure will lead to a loss since the firm will incur additional operating expenses and taxes. As a result, the firm will record a total loss of $19000. However, in the second year, the firm projects to sell services worth $300000. This trend will result in a significant improvement in its total revenues which will amount to $90000. The firm will record total revenue of $149000 and $189000 in the following years after selling services worth $400 and $500, respectively. Much of the expenses will be in general/administrative and the total costs of sales. This project assumes uniform salaries with annual increases depending on the positions.
Further, the firm assumes that the total sales will increase according to its market connection. Since the firm’s first year will be fairly new, it will spend more on advertising than the subsequent periods. The attached income statement breaks down the costs, revenues and expenditures for the firm.
Figure 1. The Firm’s Income Statement and Projections.
Conclusion
One of the factors influencing business success is the ability to connect with the consumers. Consumer connection is achieved through sufficient marketing. The firm will implement the proposed business idea in the next five months. During this time, the firm will plan, allocate resources, establish its headquarters and hire the necessary people. Its success will depend on the ability to establish a foundation for attracting consumers. Since it is a service business, the firm will segment them into two. Consultations will be done online and physically through the firm’s offices. The firm projects a loss in the first operating year from increased spending and reduced sales. However, the business will report a positive trend in the following years following sufficient marketing and creating a loyalty program with its consumers. This idea is viable because of the projected earnings and revenues in the first four operating years.
References
Aspan, H. (2017). Good Corporate Governance Principles in the Management of Limited Liability Company. International Journal of Law Reconstruction, 1(1), 87.
Deelmann, T. (2018). Does digitization matter? Reflections on a possible transformation of the consulting business. Digital Transformation of the Consulting Industry, 75-99.
Eriza, N., Azheri, B., & Fauzi, W. (2019). Juridical Consequences of Amendments to the Articles of Association of a Limited Liability Company that is not recorded at the Ministry of Law and Human Rights In Indonesia. International Journal of Multicultural and Multireligious Understanding, 6(6), 430-439.
Honig, B., & Samuelsson, M. (2021). Business planning by intrapreneurs and entrepreneurs under environmental uncertainty and institutional pressure. Technovation, 99, 102124.