INTEGRATED PROJECT SECTIONS 30
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Business Plan
Table of Contents
Executive Summary 4
Opportunity: Vision and Concept 5
Vision Statement 7
Mission Statement 7
Value Proposition Statement 8
Company and Business Model Description 9
Industry Analysis and Trends 10
SWOT 11
PESTLE 13
PORTER’S FIVE FORCES 14
Business Goals 16
The Competition 17
Marketing Mix 17
Target Markets Description and Profiles 19
Strategic Position and Risk Assessment 19
Keys to Success 20
Operations Plan 20
Technology Plan 21
Management and Organization 21
Community Involvement and Social Responsibility 23
Development, Milestones, and Contingency/Exit Plan 23
References 30
Executive Summary
Better Per4maance is a sporting outfit shop that deals with the selling of clothes for athletes which makes them presentable and endures in their performance. Better Per4mance has a physical location for shopping in NYC and they embrace online to enhance their sales and obtain more revenue from global transactions. The athletics outfits are made of durable and expandable clothes, which are adjusted to perfectly fit the athlete’s bodies. The apparel store has a comprehensive sector that obtains mail and internet orders for great sporting gear. The apparel sporting shoes are versatile made for diverse sporting activities ranging from running, soccer, American football, rugby, and hockey. The sporting kits have the potential of huge market share and are dominating the global market that intends to improve on the efficacy of athletes to train and achieve their goals. Better Per4mance has a knowledgeable staff that advises the shoppers on the best designs to fit their bodies and enhance their productivity. Better Per4mance intends to improve the athlete’s lifestyle and design clothes and sporting gear for athletes based on their preferences upon making an order. Better Per4mance has a sound financial control system and dynamic staff to attain modern customer needs and obtain a competitive edge in the market (Boone, Kurtz, & Berston, 2019). Better Per4mance monitors the organization’s competitive environment and gymnastics and sports personalities’ interests and designs their products to suit and compete in the modern environment. The sporting gears for aerobics are customized in various sizes and designs to meet the lifestyle demands which are comfortable and promote safety trademark in sports. Better Per4mance has an effective management system and trained staff that synchronize in producing all-weather sporting outfits and shoes that offer great services to create a loyal customer base and improve in financial margin from the domestic sales.
Opportunity: Vision and Concept
Better Per4mance is going to be a comfortable and affordable clothing brand. Our products are going to be geared towards gym-goers and people who live an active lifestyle. We are going to be selling compression shorts, tank tops, and shirts. The fitness apparel business is going to be promoting a healthy lifestyle and encouraging important values that resonate with our consumers. The world has changed tremendously since the emergence of COVID. “The vast majority of Americans said the Covid-19 epidemic is a significant stressor for them, with more than 40% saying they’ve gained undesired weight since the start of the epidemic, according to the American Psychological Association’s (APA) annual “Stress In America” report.” People are highly aware and becoming fit conscious. Better Per4mance will be based in NYC and be utilizing digital platforms. Our pricing strategy will initially be low-cost and affordable to undercut our competitors. Home exercise and outdoor sports have increased exponentially in 2021. We plan to make our clothing aesthetically appealing and comfortable for athletic and everyday use. The remote work has made people opt for sports apparel instead of traditional work clothes. Consumer preference has been growing in the athletic leisure demand. There physical activity caused by the pandemic has also affected customer preference. There has been substantial growth in the digital fitness community. With physical relation operations feeling the pressure of COVID, we can command the digital market with our athletic wear.
Better Per4mance will promote the business online, using social media channels, and create a website where people can have a look at the products we’re offering. Additionally, we plan to reach our customers through flyers and meetings/interactive workshops with local gyms & businesses. Social media influencers have gained a greater influence over consumers. Collaborating with social media influence can prove to be effective. Other promotional activities include developing and placing program brochures and flyers throughout the community, frequently. Secure display tables at local events, as available. “We’re all looking for Better Per4mance”
Better Per4mance Initiative:
Jonas Estrella (CEO): Highly active and determined leader with an extensive business background. A business leader who cares about the community and the promotion of a healthy lifestyle. Possesses strong communication skills and embraces opportunities and challenges. Experienced in sales, leadership and public speaking.
James Sanchez (CFO): A passionate business partner with the vision and drive to help grow any company and the patience to lead or be lead. Versatile and able to adapt to continuous change and apply new knowledge and skills. Experienced in using communication and interpersonal skills to sell products to customers, manage and motivate employees, and build and maintain positive relationships with individuals from diverse backgrounds.
Ariel Rosario (COO): Strongly motivated and highly innovative with a commitment to driving growth in a rapidly changing industry. A strong decision-maker and highly competent in taking on any task that may present itself. Expertise in team building and leadership as well as market strategy and analysis.
Vision Statement
The vision is to become versatile in adapting to new and changing dynamics through the acquisition of necessary skills and knowledge to adapt to the changing dynamics and create a beneficial relationship with customers. The apparel athletic company is passionate about promoting a healthy lifestyle in the community. To become a leading and premium shopping outlet for both male and female sports gear as a clothing retailer in NYC and the United States. Apparel athletic company is a vision to penetrate the market by a minimum of ten percent annually and increase productivity by focusing on the global scope of operations to become the leading sports outfit sale store (Boone et al., 2019). The profitability of the appeal clothing shop intends to add value to users and expand on its operations by opening various stores globally and setting trends for athletes’ attires and shoes that are comfortable and with the ability to increase their performance.
Mission Statement
Better Per4mance’s mission is to become a premier clothing retailer for sports gear in the U.S by offering quality services and production of quality products that meet the global changing consumer dynamics. The mission will be ascertained through offering fair prices of the sporting outfits, training knowledgeable staff in helping consumers, and offering the best selecting of sporting gear in the market. The products intend to supersede consumer expectations and dominate the market share to become a global and leading sportswear store and social influence brand (Boone et al., 2019). Therefore, the mission statement will be achieved through research in improving the efficacy of sporting outfits and effective management skills to pursue sound financial control systems and leverage productivity.
Value Proposition Statement
Better Per4mance has a sound business model with a universal management structure to improve athletes’ performance, solve their outfit challenges, and encourage comfortability in athletic programs that make the organization different from other competitors. The uniqueness of the value proposition for apparel sporting gears is the coordination and configuration of the corporate approach to create value on the products in providing elastic and durable attires and shoes for sporting facilities and offer sporting amenities such as a testing area for the sports gears in their retail shops before purchase. Better Per4mance focuses to target new customers and create a loyal consumer base that will improve the client’s sporting life coupled with a one-month warranty on the sale of its sports gear items to customers. Such transparency enables the apparel athlete shopping stores to be fair in their prices and encourage accountability with intention of offering quality services and attracting more customers through adverts. The distinctive nature of apparel sporting gears and services is different from other competitors in a similar venture since it offers competitive and fair prices with discount costs on bulk purchases (Boone et al., 2019). The retail shopping store offers delivery to domestic areas thereby becoming consumer-oriented towards their satisfaction. The standard of apparel athletic products is designed to withstand different weather conditions and maintain its performance level thereby making it unique from other competitors. The viable strategy in maintaining its value is through employing trained and qualified staff that is customer-oriented and places consumer interest first as a priority in satisfying their needs enables the organization to stand out in value proposition.
Company and Business Model Description
Better Per4mance is based in New York City that offers sports outfits to aerobics, gymnastic, hockey, soccer, American football players, cyclists, and athlete’s attires across the country. The local retailer shop provides physical and virtual shopping through their websites and social media platforms to interact with customers and modify their product (Savić, Ranđelović, Stojanović, Stanković, & Šiljak, 2018). The athlete apparel shop offers a wide range of sports attires that are designed to endure different conditions in sports activities and made of quality fabrics to endure difficult terrains and promote comfort to enhance performance and training of sports personalities. The premise of the company was founded on improving a healthy lifestyle for the community and promoting the participation of sports athletes in the diverse sector in the exploration of community talent. The ownership of the company is based on the partnership of the investors to pull resources and ensure the viability of the business through limited inventories in the sports sector thereby laying a cognitive foundation in management expertise and leadership skills.
The business model is to ensure that the sold clothing brand is affordable and comfortable to increase the per4mance of an active lifestyle. Better Per4mance effectively utilizes the digital platforms to attract global consumers and expand its market share in attracting potential clients. The business model is geared towards attracting gym-goers to increase their participation and undercut competitors (Savić et al., 2018). The integrated promotional services display flyers, brochures, and programs through tables at local workshops and events for better per4mance initiatives thereby expressing and showcasing the business background. The business model values cognitive-communication skills that intend to build positive relationships with clients to create a loyal customer base and motivate the staff through effective leadership skills. Therefore, the business model facilitates team building and expansion of the business scope and innovates to become relevant and compete favorably.
Industry Analysis and Trends
Most sporting companies in the U.S operate as retail sporting stores that have a large chain from the revenue obtained. The market has a huge potential for expansion attributed to the growing population of athletes from colleges and professional sporting players that contributes to the emergence of large chains in the national market for sporting products and services. The increased online merchandise stores provide sporting retailers with modern and trending outfits based on consumer demands for the latest design products to meet customers’ expectations and needs (Trendafilova et al., 2014). Therefore, the management of inventory is a concern for the sports industry that promotes competition through the involvement of celebrities as brand ambassadors to make it trend and boost sales. The market size of athlete apparel is tremendous in the domestic sphere for advocating for an active lifestyle from the rise in sports participants. The popularity of sports mainstream creates brand loyalty for gymnasts, basketball, baseball, soccer, ice hockey, cyclists, and running personalities.
The market trend for athlete apparel shoppers is the introduction of new fashion line sporting activities since the growing demand of leisure sports and increasing comfort for better per4mance. The branding action for targeted clothing in the apparel line intends to create potential growth in the market in addressing the lifestyle needs. The company uses SWOT analysis in the penetration of the market. The strength of the NYC athlete apparel lies in professional endorsements, lowering lease rates, and marketing and manufacturing partnerships to expand the market (Trendafilova et al., 2014). The weakness is the dependence on outsourcing in the created distributed channels since it’s a new market brand. The emerging opportunities are the recruitment of various athletes to endorse the products and the creation of diverse demos in events coupled with creating and formulation of brand designs and relationships of fresh brand designs. The threat is emerging competition from other sporting companies and modest funding for its ability to perform.
SWOT
STRENGTHS:
Better Per4mance has developed a digital store that can boost the shop profitability and expose it to a larger marketplace globally. By going digital the company can easily withdraw real-time data that portrays the sales volumes, the number of visitors and the engagement rate.
Achieving high-quality standards and fair prices rates are competitive advantages that can help the store flourish.
Keeping in mind the client needs from the idea’s implementation to its delivery, which can create loyal customers and enhance the brand image.
WEAKNESSES:
The company marketing strategy is focusing on traditional marketing techniques rather than giving digital marketing a higher priority. Rather than distributing flyers and brochures, the shop should intensively use SEM and SEM marketing tools to target specific audiences and increase its cliental database.
Financial resources might be limited at the beginning of the project due to the massive expenses.
OPPORTUNITIES:
By implementing the stated strategies correctly, the shop can reach countries outside USA borders which can lead to an increase in sales targets and profitability.
Due to the emerging trend of apparel clothes, the fashion aspect of this specific sector is expanding. Besides, creativity is unlimited which can push the company to create original items and new products lines.
Co-branding capabilities with other brands or collaborations with well-known public figures.
THREATS:
Existing and potential competitors are inventible to appear since this field already exists and expands enormously.
Unexpected events such as the Covid-19 pandemic can stop the activity of the business’ logistics and operations.
Bad reviews regarding the business or the products affect the image of the shop and/or brand negatively.
Suppliers’ issues might happen such as the increased price of the raw materials or the decrease of quality standards.
PESTLE
POLITICAL:
Better Per4mance should be aware of the tax policies on selling items physically and online.
Before selling products outside NYC borders to other states in the USA or other countries, the management should analyse the trade policies.
ECONOMICAL:
While selling to other countries, the company should be careful to receive its revenue in USD or other currencies while maintaining the profit margins and studying the exchange rates.
Keeping an eye on the countries operation economy is essential to predict inflations and financial crises.
SOCIAL:
Visualizing the lifestyles changes is necessary for keeping up with developing the latest trendy apparel.
Analysing the demographics in each city is crucial to producing items relevant to the market needs.
TECHNOLOGY:
Searching and adopting the latest innovations to develop the products, supply chains and marketing strategies are necessary to survive in the market.
In a digital world, a special focus on the IT department is indispensable since cyber security hacks can destroy the company’s reputation and increase its unexpected expenses.
LEGAL:
Better Per4mance should be aware of the legal branches that might affect the company’s image and increase its unexpected expenses.
Products should be original in design and quality to avoid copyright lawsuits.
An internal diverse and accepting environment is needed to avoid discrimination and employment legal issues.
ENVIRONMENTAL:
Since the company produces apparel, avoiding pollution and recycling are fundamental aspects of saving the environment and the company’s reputation.
Climate and seasonal changes play a crucial role in production decisions.
PORTER’S FIVE FORCES
THREATS OF NEW ENTRANTS: HIGH
Athletics Apparel is a new business penetrating the market. Therefore, the company should expect new entrants in the market that can compete with prices and quality. Athletics apparel should focus on its brand image and originality to avoid new entrants’ competition.
THREATS OF SUBSTITUTES: HIGH
The threat of substitute products is high because of the availability of other sports apparel from well-known brands. Sports apparel competition is prominent and competitors tend to replicate each other’s products.
RIVALRY AMONG EXISTING COMPETITORS: HIGH
Existing competition is abundant in the Athletics Apparel products category. Multinational names such as Adidas, Nike and Rebook already earn the largest market share. Besides, those big names have higher investment capabilities in production, marketing, supply chain and stores number. Therefore, Athletics Apparel will face difficulties in proving itself as a brand at the beginning.
BARGAINING POWER OF SUPPLIERS: LOW-MID
Since the company is penetrating the market newly, it doesn’t have power over its suppliers in terms of contracts rules and regulations. Therefore, Athletics Apparel should choose its suppliers wisely. Besides, the company should rely on several suppliers to diminish the risks of conflicts which can lead to a decrease in productivity and profitability.
BARGAINING POWER OF BUYERS: MID
The bargaining power of buyers for Athletics Apparel is currently low due to the availability of multinational brands competing in the market. The company should focus on developing creative advertising campaigns, original high-quality products and low prices to attract clients and build a loyal fan base empire.
Business Goals
The balanced scorecard helps the athlete apparel organization analyze its strategic plans in the achievement of its objectives. The SMART goals are intended to map customers, financial objectives, and learning specific objectives and activities in measuring the intended outcome of the organization’s plans. The NYC athlete apparel aligns its strategy with coordination of operations framework as a sophisticated instrument in initiating better per4mance to achieve the business goals. The practice of a balanced scorecard translates the vision of metrics in making managers achieve the intended realities (Schwarz & Hunter, 2017). The linking and communicating athlete attire organization with available strategy in disseminating competitors and yield compensation and performance from individual to overall strategy. The learning feedback and business plans separate the budgeting and procedure of the company in making strategic goals and provide a review of the feedback to achieve a balanced scorecard.
The Competition
Better Per4mance obtains serious competition from existing brands such as Gymshark, Nike, and Adidas that have a bigger market share since they have been in operation several years before the existence of athlete apparel organization. However, Better Per4mance retail store growth has been impressive and has been penetrating the new market sphere through frequent discounts from sales thereby attracting more customers and initiating aggressive competition in the market segment. The special discount programs and the fair prices will attract more purchasers and the innovations in branding designs to attract more potential consumers thereby creating more competition leverage (Savić et al., 2018). The inclusion and partnership of visible sporting players with NYC athlete apparel have revolutionized sporting leisure lifestyle and the creation of various outlets locally coupled with the comfortability of the products performance and increased quality of services will make the organization have a competitive edge in the sporting attire sales market.
Marketing Mix
The marketing mix for Better Per4mance is a strategy of identifying the market segment and provides a plan for penetrating the identified market. Better Per4mance uses various marketing strategies and plans in processing affecting decision making and obtain knowledge in research on consumer behavior, company developments, and the competitive climate. The sporting apparel uses sports products as the first marketing mix to facilitate specific features that will enable athlete’s per4form better. The core products enable the marketer to ensure it is of high quality and acceptable in meeting the specifications and demands of consumer (Mihai, 2015). The produce entails the ideas and benefits associated with the sale of sports outfits to provide comfort and endure training to achieve their sports targets. The product is packaged to attract the target audience and offer entertainment upon purchase that communicates the intended expectation from the apparel. Another marketing mix application is the sport pricing of the product that consumers can afford and cut across the competitive services and goods in the sporting industry. The value of the product is reflected in the stipulated prices.
The provision of sales discounts and the presence of coupons from Better Per4mance is a price factor of integrating pricing to achieve success as a marketing plan. The pricing will be affected by government regulations, politics, and economic factors that are part of external aspects that determines the right price for customers. Sports distribution is the intention of the place where the product is available to consumers. The strategic location of Better Per4mance is key in the distribution of products and services since the demography depends on the available sports amenities such as stadiums and creates a high demand for sales (Mihai, 2015). Therefore, the delivery of the product at the right place using appropriate channels will enable the target audience to consider the purchase and obtain the experience. The sales promotion as a marketing mix approach intends to raise consumer awareness and stipulate the benefits associated with the product and services. The apparel sports marketers design the product and services messages to resonate with consumer demands and preferences. The promotion aspect of the marketing mix is designed to involve communicating with consumers and persuading them to try the product using adverts for promoting sports wears.
Target Markets Description and Profiles
The target market of the products and services of Better Per4mance is to market the sporting outfits such as gym pants, shorts, training, and sporting shoes, and sporting accessories to improve better performance for athletes. The profile of the product is designed and manufactured to target and improve the lifestyle of sports participants in various sporting fields and meet the leisure demand in sporting activities (Christensen, Raynor, & McDonald, 2018). The organic and natural sports gears produced by Better Per4mance are made from strong and flexible fabric materials to ensure comfort and enhance longer participation in sporting practices and promote their enhanced performance. The demographic factors integrate the unique design profile and product description to meet and exceed consumer demands from the perception of quality standards if the marketed sports apparel is based in NYC.
Strategic Position and Risk Assessment
Better Per4mance uses diverse and remarkable strategies in making its products designs and service unique to enable the target audience to differentiate the items from competitors. The strength of the company involves the ability of the sports apparel firm to partner with viable business associates for the product to expand and attract more clients from its vast scope of operation (Christensen et al., 2018). The weaknesses of the sporting brand are outsourcing its production since it’s a new entry firm hence the competition and challenges in distribution channels. The opportunities involve endorsement from sporting facilities and athletes that enables more sports participants to associate and try the product and services. The branding intends to attract a more loyal customer base. The threat is the continuous innovation of more and effective business models by rival companies that makes the apparel organization use more resources to fund its productivity and obtain a competitive advantage.
Keys to Success
Better Per4mance will achieve success through the formulation of a strong and simple brand concept that resonates with the target market. The sports garments emblem is unique that makes it noticeable when sports participants wear the outfits hence associating success with the quality and standard of products brand to be memorable. The creation of a niche will enable the apparel sports company to distinguish itself from other competitors and obtain a unique selling point (Schwarz & Hunter, 2017). The innovative approach to consciously produce leisure sports garments will enable the apparel organization to compete favorably with the dominant players in the industry by properly equipping the business with desired resources and structures.
Operations Plan
Better Per4mance us based in NYC has a viable business plan that dictates how the venture operates in finances, marketing, and inventory management. The operations plans intend to evaluate the progress of the sporting gears and penetrate the target market while obtaining competitive advantage in the production of services and goods in the sporting industry. The partners that founded and established the apparel sports company have different roles and targets to achieve the overall company objectives (Mihai, 2015). The focus is on manufacturing, design, and sales for athletes’ products and services using effective distribution channels. The organization shifted its operations and concentrations to online marketing to tap the global consumers and improve on athlete’s per4mance from the marketed sports garments.
Technology Plan
The Better Per4mance company intends to use automation, robotics, and RFID technologies to facilitate effective production and data transfer. Automation in mass production in the apparel sports company helps improve the productivity of the business. Robots are widespread across several industries, such as automobiles, and they can perform well in sewing and textile shops (Behr, 2018). Using robotics in Better Per4mance company will help optimize sales services in the stores and enhance productivity. Also, the Better Per4mance apparel sports company intends to invest in smart garments to improve its sales based on the current technological advancements in the textile industry. There are good possibilities that smart garments and wearables will be used on a much larger scale shortly (Fernandez-Carames & Fraga-Lamas, 2018). The company looks forward to making the sales of smart garments, sports wears, and other products flexible to meet the needs of hockey players, soccer, rugby players, and their fans. Moreover, the company intends to use New generation Computing (NGC) software to improve its sales. NGC software is vital in increasing speed to market and strengthening organization (Fernandez-Carames & Fraga-Lamas, 2018). Increasing the speed of delivery in the market helps in attracting more customers because customers like quick services. Therefore, Better Performance will adopt the software to enhance the company’s effective marketability and profitability and ensure customer satisfaction across the world.
Management and Organization
The Better Per4mance company has an effective management system and qualified staff that produces all-weather sporting outfits and shoes that offer excellent services to create a loyal customer base. The company intends to accomplish the company’s desired objectives by establishing a healthy working and business environment for people working in the company. Better Per4mance company has a manager who has worked for over ten years in the retail industry and more than five decades in apparel sportswear company with practical education qualification having earned a BA in Fashion merchandising from a recognized university. Based on the organization, the company’s staff will have particular roles in accomplishing the company’s objectives. The purchasing director leads the product manager and technicians; quality technician’s work with the designers, the sourcing manager links purchasing departments and stores, and the textile buyer purchases finished products (Tudor, 2018). Effective management and organization are essential for the business’s profitability, employee retention, and customer satisfaction. Better Per4mance company will ensure its management and organizational procedures are friendly to the customers and the employees.
Community Involvement and Social Responsibility
Better Per4mance company will involve in community programs necessary for better living standards in the society. The company will show a significant commitment to the community by supporting their own and non-profit initiatives concerning everything dealing with local sports associations to the needy population. Commitment to invest in the local communities helps make a real difference in the living standards of the people in the community (Heald, 2018). The company will involve social responsibilities such as donating sport attires to the local football clubs, providing clothes to needy orphans, and lowering clothes prices to people from specific communities. Reducing the costs and participating in donations indicates a way of delivering due returns on the investments made by the community. The company involves in the social responsibilities to its customers by selling quality products. Quality products are essential for customer satisfaction and retention (Heald, 2018). Additionally, the company is also involved in social responsibility by creating job opportunities, participating in charity work in society, and other community development programs. According to Heald (2018), a company can involve in social responsibility towards the environment by adopting ecological friendly packaging, using pollution-free procedures in production, using an efficient system for waste disposal, and facilitating ecological friendly supplies. The company will adopt the processes that promote a healthy environment without polluting the ecosystem.
Development, Milestones, and Contingency/Exit Plan
The company is determined to meet its SMART goals to facilitate the development of the company. The company plans to enhance its development by developing new products such as smart garments, which are very profitable. According to Behr (2018), smart garments and wearables will soon dominate the textile and apparel industry due to the high demand from the public. The company will involve in characteristics necessary for product development issues such as trade-offs, time pressure, creation, and innovation (Kalogiannidis & Mavratzas, 2020). Based on the milestones, the company intends to establish a solid business model by identifying the potential clients, the primary requirements, and the effective means of delivery. Also, the company plans to achieve customer loyalty and develop an effective marketing strategy. The contingency plan that involves preventive control will include creating an official policy in the company to provide clear guidelines to help employees, and team members work to achieve the company’s objectives.
The Financials
Financial Objectives
To achieve effective revenue generation
To achieve better profit margins for business expansion
To effectively manage business operational activities
To maximize employee efficiency, performance, and productivity
To achieve customer satisfaction
Sales and Expense Forecast
Sales Forecast ($)
Jan-Apr.
May-Aug
Sept-Dec.
2020
2021
2022
Soccer clothes sporting & gears
45000
45400
50000
140,400
145,500
150,500
Rugby clothes & sporting gears
40000
45000
49000
134,000
140,000
150,000
Hockey clothes & sporting gears
43000
47000
50000
140,000
146,000
152,000
Other income
30000
45000
50000
125,000
130,000
138,000
Total sales ($)
158,000
182,400
199,000
539,400
561,500
590,000
Expense Forecast
Expenditure
Jan-Apr.
May-Aug.
Sept-Dec
2020
2021
2022
Payroll
90,000
95,000
100,000
285,000
286,000
286,500
Advertisement
10,000
15,000
17,000
42,000
43,000
43,500
Insurance
20,000
24,000
25,000
69,000
70,000
71,000
Other Expenditures
30,000
35,000
36,000
101,000
102,000
102,500
Total
150,000
169,000
178,000
497,000
501,000
503,500
Break-even Analysis
Rugby clothes and their sporting gears report the minimum sales volume due to few customers yearly purchasing the rugby products. On the other hand, soccer clothes and sporting gear contribute averagely with the hockey clothes and sporting gear necessary for the company’s profitability.
Financial Control
Better Per4mance company has policies in place in the general ledger, invoicing, revenue recognition, payment processing, and asset management. The company has clear segregation of roles and duties in sales and revenue recognition, among other sectors. Additionally, the company has clear responsibilities for its employees and adequate information security since access to financial software and documentation is only for authorized persons.
Financial Statements and Ratio Analysis
Current Assets
2020
2021
Cash
539,400
561,500
Accounts Receivable
30,000
32,000
Merchandise inventory
50,000
55,000
Prepaid expenses
10,000
10,000
Total Current Assets
$629,400
$658,500
Property and Equipment
Property and equipment
150,000
170,000
Less: Accumulated depreciation
55,000
65,000
Net Property and equipment
$95,000
$105,000
TOTAL ASSETS
$724,400
$763,500
Current Liabilities
Accounts payable
30,000
32,000
Salaries payable
285,000
286,000
Interest payable
6,000
8,000
Total current liabilities
$321,000
$326,000
Income Statement: Annual
Income Statement for the year ended November 30,2020
Net Sales
$539,400
Cost of Sales
$327,000
Gross Profit
$212,400
Selling an Operating Expenses
25,000
General and Administrative Expenses
30,000
Total Operating Expenses
55,000
Operating Income
$157,400
Income Tax Expense
$80,000
Net income
$77,400
Income Statement: Three-Year Projection
2020
2021
2022
Net Sales
$539,400
561,500
590,000
Cost of Sales
$327,000
329,000
350,000
Gross Profit
$212,400
232,500
240,000
Selling an Operating Expenses
25,000
26,000
27,000
General and Administrative Expenses
30,000
31,000
32,000
Total Operating Expenses
55,000
57,000
59,000
Operating Income
$157,400
175,500
181,000
Income Tax Expense
$80,000
$80,000
$81,000
Net income
$77,400
95,500
$100,000
Cash-Flow Projection: Monthly
Monthly
Operating Cash
$170,400
Sources of New Cash
Cash Sales
$50,000
Customer Deposits
$10,000
Others
$2,000
Total sources of Cash
$232,400
Uses of Cash
Payroll
$90,000
Taxes
$30,000
Inventory purchase
$15,000
Other
–
Total Uses of Cash
$135,000
Cash Flow Deficit
$97,400
Cash Flow: One-Year Projection
Jan-Apr
May-Aug
Sep-Dec
Operating Cash
$170,400
$170,500
$171,000
Sources of New Cash
Cash Sales
$50,000
$50,500
$50,600
Customer Deposits
$10,000
$10,500
$10,700
Others
$2,000
$2,100
$2,150
Total sources of Cash
$232,400
$233,600
$234,450
Uses of Cash
Payroll
$90,000
$90,500
$90,600
Taxes
$30,000
$30,500
$30,600
Inventory purchase
$15,000
$15,100
$15,200
Other
–
–
Total Uses of Cash
$135,000
$136,100
$136,400
Cash Flow Deficit
$97,400
$97,500
$98,050
Annual Cash Flow
Total Cash source per year – Total Cash Use per year
= 701,450 – 292,950
= $408,500 Per Year.
Balance Sheet: Annual
Balance Sheet for 2020
ASSETS
LIABILITIES & EQUITY
Current Assets
Current Liabilities
Cash 539,400
Account Payable 30,000
Accounts Receivable 30,000
Salaries Payable 285,000
Merchandise Inventory 50,000
Interest Payable 6,000
Prepaid Expenses 10,000
Total Current Assets 629,400
Total Current Liabilities 321,000
Noncurrent Assets
Noncurrent Liabilities
Property and Equipment 150,000
Long Term Debt (Loan) 17,000
Accumulated Depreciation -55,000
Total liabilities 338,000
Total Noncurrent Assets 95,000
Equity
Owner’s Capital 86,400
Retained earnings 300,000
Total Equity 386,400
Total Assets 724,400
Total Liabilities & Equity 724,400
Balance Sheet: One-Year Projection
Assets
2020
2021
Current Assets
Cash
539,400
561,500
Account Receivable
30,000
32,000
Merchandise Inventory
50,000
55,000
Prepaid Expenses
10,000
Total Current Assets
629,400
658,500
Noncurrent Assets
Property and Equipment
150,000
170,000
Accumulation Depreciation
-55,000
-65,000
Total Noncurrent Assets
$95,000
$105,000
Total Assets
$724,400
$763,500
Current Liabilities
Account Payable
30,000
32,200
Salaries Payable
285,000
286,000
Interest Payable
6,000
8,000
Total Current Liabilities
$321,000
$326,000
Noncurrent Liabilities
Long term Debt
17,000
17,000
Total Liabilities
$338,000
$343,000
Equity
Owner’s Capital
86,400
70,500
Retained Earnings
300,000
350,000
Total Equity
386,400
$420,500
Total Liabilities & Equity
724,400
$763,500
List and Sources of Funds
Retained earnings
Bank borrowing
Loan stock
Capital markets
Government sources
Business expansion scheme funds
Assumptions Sheet
Staffing Business Budget
Hours
Staff
Rate
20
Team Leader
$600
$12000
Business Manager
$1200
$24,000
Quality Technician
$800
$16,000
Purchasing Director
$1000
$20,000
Total cost of the Business
$72,000
References
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