Small Business Administration

• Subject Code : MBA602
• Subject Name : Business administration systems

BUSINESS PLAN

Executive Summary

In the times when automation in the accounting and book-keeping, artificial intelligence, cloud computing, and blockchain continue to affect and lead to changes in the financial industry, it has become important for Future Profit Pty Ltd which is run by Jane to go through some structural changes. This paper is intended to provide the strategic business plan which would help Jane to expand her business to another city along with automating her business for being stable and sustainable financially.  This paper provides a business overview, a brief market analysis, business strategy for expansion and processes automation and financial forecast for helping Jane to take the approval of the board for expansion.

Contents

1. Business Overview 

1.1. Products and Services 

1.2. Vision statement 

1.3. Mission statement 4

2. Market Analysis 

2.1. Market Segmentation 

2.2. Target Segment 

2.3. New Target Market 

2.4. Competition 

3. Business Strategy 

3.1. Competitive Edge 

3.2. Going Digital 

3.3. Marketing Strategy 

3.4. Sales Strategy 

3.5. Investment Requirements 

4. Financials 

5. Conclusion 

References 

1. Business Overview

Future Profit Pty Ltd is a registered and licensed financial consultancy firm in Canberra, run by Jane. The company provides book-keeping and accountancy services to small and medium-sized businesses.

Future Profit Pty Ltd helps the small and medium-sized enterprises in their growth by taking care of their book-keeping and accounting needs with the help of Jane who has intensive experience of 20 years in the field of accountancy.

1.1 Products and Services

Products are tangible items that are offered by the business organisation for acquisition, attention and consumption by the end-consumers (Rosca, Arnold & Bendul 2017), whereas services are the intangible offerings by the business organisation.

Future Profit Pty Ltd provides the consultancy and accountancy services in the accountancy industry. The firm provides accountancy and book-keeping facilities to the Small Medium Enterprises segment through networking with the local professional associations and word-of-mouth publicity, however, intensive marketing practices can be adopted for attracting more business clients.

1.2 Vision statement

A declaration by the business organisation about its objectives and goals, which is planned to guide the internal operations, decisions and procedures, is known as the vision statement of the organisation (Gulati et al. 2016).

The vision of the Future Profit Pty Ltd is to become a renowned accounting service firms in Australia for the Smaller and Medium Size Enterprises. 

1.3 Mission statement

A short statement which provides the reason for the existence of the organisation is known as the mission statement of the organisation (Li, Frohna & Bostwick 2017). 

The mission of the Future Profit Pty Ltd is to provide the Small and Medium enterprises operating in all the industries including health, education, manufacturing, marketing, retail, wholesale or STEM (science, technology, engineering, mathematics). The mission is fuelled by the vision of Jane who wants to expand her business and is looking for sustainability.

2. Market Analysis

A qualitative and quantitative analysis of the environment surrounding the business organisation is known as market analysis. It provides information about the market segmentation, target segmentation, selection of the target market, and competition pertaining to the business (DeSarbo, Blanchard & Atalay 2017).

2.1 Market Segmentation

The process of dividing a market into potential customers on the basis of different characteristics is known as market segmentation (Dolnicar, Grün & Leisch 2018).

The market of Small and Medium Enterprises in Australia for Future Profit Pty Ltd is more than 2.1 million (Pupazzoni 2018).

2.2 Target Segment

Providing high-quality financial services to the Small and Medium Enterprises, in the growth phase, and having a minimum turnover of $ 1 million per annum is the target market for Future Profit Pty Ltd.

2.3 New Target Market

Group of consumers who are particularly selected to offer the products and services of the business organisation is known as the target market of the product/services or organisation (Andaleeb 2016).

The number Small and Medium Enterprises in the New South Wales State of Australia is the highest and is the target market for Future Profit Pty Ltd (Department of Industry Innovation, Science, Research and Tertiary Education 2012), the higher number of SMEs will help Future Profit Pty Ltd to gain maximum customers and hence higher return on investment. 

2.4 Competition

An act of trying to win something that other entities are also trying to win is known as competition (Cambridge definition).

In 2016, accounting firms in Australia, in terms of revenue, were valued at approximately $20 billion. The services provided by local accounting firms were accounting, auditing, bookkeeping, advisory, and tax services.

3. Business Strategy

3.1 Competitive Edge

Competitive edge or competitive advantage is the advantage a company has over its competitors, in another word, competitive edge is the abilities and skills of the organisation that aid them in outperforming their competitors. It is important for the business organisation to continuously innovate for sustaining the competitive advantage in the industry (Walters & Hooper 2019). 

The level of competition in the financial industry largely is based on the location of the financial firm and the niche and speciality of the financial services offered by the firm (Gomber et al. 2018).

Gaining competitive edge will be done with using an improved and updated version of the cloud services for providing the customers with the ease of reaching Future Profit Pty Ltd, along with keeping the cost of services at the lower end which would attract maximum customer and help the firm in gaining the competitive advantage.

3.2 Going Digital

The current digital application used by the Future Profit Pty Ltd is ‘Zero’, which is cloud-based accounting software. Additionally, a website will be required to be developed which would introduce the company and its services along with providing the customers with a ‘chat-bot’ for asking questions, and also will have a feature to let the customer register themselves for getting a call back from the company, and thereby generating leads for the company. The website will make interacting with the customer, and finding customers easier (Demangeot & Broderick 2016). 

Another important technical automation could be a data management system that can be used for collecting, storing and retrieval of data (templates) which can provide faster services to the client.

Automation of rewards for referrals can also help the organisation to improve its performance, as this may motivate the existing customers to provide references (Kumar & Pansari 2016). 

3.3 Marketing Strategy

Marketing strategy is the broad plan made by an organisation to achieve the objectives of the organisation and reach the maximum customers, who would be making use of the organisation’s products and services; this would lead to increased sales, and, therefore, the overall profits (Olson et al. 2018).  

The Future Profit Pty Ltd will be employing the following marketing strategies for reaching to the target market of the Small and Medium-sized enterprises with its new book-keeping services:

1. Website marketing – for enabling the customer to reach the firm easily without having to come physically to the firm.

2. Advertisements in the publications for Small and Medium-Sized Enterprises, and tracking the leads generated through these publications for better analysis of the usefulness of these advertisements.

3. Continuous networking at the Australian Institute of Company Directors, NSW Business Chambers, Women in Business NSW, Financial conferences, Building & Construction Banking and Finance conferences.

4. Referrals program will be made, for the clients who will be providing referrals for helping the organisation acquire more clients.

The marketing content would be based on the advantages of outsourcing Future Profit Pty Ltd for their accounting and book-keeping requirements.  

3.4 Sales Strategy

An approach that would help the organisation to present its products and services to the targeted audience in a differentiated and meaningful way is known as sales strategy (Inyang & Jaramillo 2019).

The sales strategy of the Future Profit Pty Ltd is to service the existing clients, and directly ask for the referrals from them about other business entities that may be in the need of financial services and consultancy. This would commence post discussion with the existing clients, over the call or face-to-face meetings and informing them about the idea of and asking them for their consent for the same. 

The prospective result of this strategy of direct selling and referrals is that the firm is expected to get 10 additional clients within the first few months, considering the existing clients would be willing to help and give referrals. 

3.5 Investment Requirements

For expanding to different market it is studied, analysed and understood that it is important and desirable that the staff is provided intensive training to enhance their technical, leadership, consulting, and analytical skills for better customer service in the future. It is also understood that expanding to a different location would also lead to increased operational costs pertaining to – rent, electricity, furniture, staff, etc. Additionally, web-development will also need a technician who will be responsible for fulfilling the technical requirements that may arise. 

4. Financials

By expanding the operations of the business, sales revenue will increase. It is forecasted at $960000 in 2020, $1090000 in 2021 and $1220000 in 2022. The company is required to appoint a technical programmer and an accountant for the smooth functioning and effective record-keeping of business operations. However, this will raise the expenditure of the company as the salary of the amount $100000 is to be paid to the technical programmer and $80000 to an accountant. In 2019, the company has recorded a loss of $144000 and in 2020, it will reduce to 34000. The company will be able to fetch profits from the year 2021 because of the increase in its revenue from its expanded operations. It is forecasted at $85000 for 2021 and $204000 for the year 2022.

5. Conclusion

This report presented a business plan for Future Profit Pty Ltd which specialises in book-keeping and accountancy services for the SMEs. The business has a potential market of more than 2.1 million customers where the company aims to target SMEs with a minimum turnover of $1 million annually. The company strategically selects NSW regions because of the high concentration of SMEs in those regions. To beat the competitors, the business will focus on the use of IT services and digitalisation to gain a competitive advantage in the market. Moreover, it will focus on newer tools such as website marketing, continuous networking and referral programs to improve its market reach. While the company focuses on improved marketing, its sales strategy will primarily focus on its existing clients. Various investment requirements were identified such as investment for training and development, technology, staff, rent, electricity and so on.  With continuous improvement in the performance, the business hopes to achieve benefits by the end of 2020. 

References

Andaleeb, SS 2016, ‘Market segmentation, targeting, and positioning’, Strategic Marketing Management in Asia, pp.179-207.

Demangeot, C. & Broderick, A.J 2016. Engaging customers during a website visit: a model of website customer engagement. International Journal of Retail & Distribution Management.

Department of Industry Innovation, Science, Research and Tertiary Education 2012, Australian small business: key statistics and analysis, Australian Government, viewed on 7th February 2020, <https://treasury.gov.au/sites/default/files/2019-03/AustralianSmallBusinessKeyStatisticsAndAnalysis.pdf>

DeSarbo, WS, Blanchard, SJ & Atalay, AS 2017, ‘A new spatial classification methodology for simultaneous segmentation, targeting, and positioning (STP analysis) for marketing research.’ In Review of marketing research (pp. 95-123). Routledge: United Kingdom .

Gomber, P, Kauffman, RJ, Parker, C & Weber, BW 2018, ‘On the fintech revolution: interpreting the forces of innovation, disruption, and transformation in financial services’, Journal of Management Information Systems, 35(1), pp.220-265.

Gulati, R, Mikhail, O, Morgan, RO & Sittig, DF 2016, ‘Vision statement quality and organizational performance in US hospitals’, Journal of Healthcare Management, 61(5), pp.335-350.

Inyang, AE & Jaramillo, F 2019, ‘Salesperson implementation of sales strategy and its impact on sales performance’, Journal of Strategic Marketing, pp.1-19.

Kumar, V & Pansari, A 2016, ‘Competitive advantage through engagement’, Journal of marketing research, 53(4), pp.497-514.

Li, STT, Frohna, JG & Bostwick, SB 2017, ‘Using your personal mission statement to INSPIRE and achieve success’, Academic pediatrics, 17(2), pp.107-109.

Olson, EM, Slater, SF, Hult, G.T.M. & Olson, KM 2018, ‘The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation’, Industrial Marketing Management, 69, pp.62-73.

Pupazzoni, R 2018, Small business failures on the rise as retailers, viewed on 7th February 2020, <https://www.abc.net.au/news/2018-10-31/small-business-failures-on-the-rise/10447846>

Rosca, E, Arnold, M & Bendul, JC 2017, ‘Business models for sustainable innovation–an empirical analysis of frugal products and services’, Journal of Cleaner Production, 162, pp.133-145.

Walters, K & Hooper, N 2019, ‘Greater diversity means a more competitive edge’, Company Director, 35(3), p.64.