ACCOUNTING AND FINANCEACC 1006

Business PlanProjectAssignment 2

Aminat Amodu Funmi Akinwande Josie WellerAdam Benjamin

08261137 07251637090291608 09284021

ContentsSummary..................................................................2Marketing................................................................4

Primary Research......................................................4Questionnaire and Results..........................................4

Secondary Research....................................................6Who are our target audience – why?.................................6

Our Competition.......................................................7SWOT Analyse...........................................................8

Features and Benefits.................................................8Price................................................................9

Place................................................................9Promotion...........................................................10

Product Life Cycle for Promotion..................................10Production..............................................................11

How the service will be provided..................................11The difference stages of production/delivering the service.....11

What equipment and machinery will we need to produce our service?How much will this cost?...........................................12

Equipment and machinery required..................................13How quality will be maintained and assured.......................14

Finance.................................................................15Where we will obtain finance?.....................................15

What are the difference expenses that we will incur in the running of our business?...........................................15

Break Even............................................................16Cash Flow.............................................................17

Profit and Loss......................................................19Balance Sheet.........................................................20

Conclusion and Evaluation – Summary Table............................21Bibilography.................................Error! Bookmark not defined.

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Summary

What is the Business?The name of our business’s name is called “Just a Crease Away”. The business will start of a sole trader (home based). The business willoffer an ironing service. The unique selling point will be the business will offer a custom made ironing bag that will be reusable.This will be charge a set price for whatever the customer can fit inthe bag.

Description of the Service The service will offer a custom made bag in which the customer will be able to put whatever clean laundry their need to be ironed. This will be then charged at a set price and collected and delivered freeof charge. The customer will then state when the time it will be suitable for them to get their pressed laundry back. The business will aim to delivery customer laundry back to them no longer than 48hours unless stated otherwise.

Location of the business – Sittingbourne, Kent

Who is our target market?The service will be aim at people with children who struggle to balance house chores with their busy schedules i.e. work. This will be mainly aim at women as research proves that women mostly did the household chores and ironing was the most disliked.

Our research also showed that domestic services such as ours are often aimed at people who have very tight schedules like work and parents with kids who may not have the time to perform household chores such as ironing.

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Potential for BusinessExisting Product New Product

Exis

ting

Market Penetration

The ironing services turning into a private limited company.

Product Development

The ironing service offered a washing service as well as an n ironing service.

New Ma

rket

Market Development

The ironing service offering services to the senior citizen homes.

Diversification

The ironing service offering acurrency exchange service

Using the Ansoff matrix, it is clear that the business has plenty ofopportunities. The business has potential to market penetrate, whichis marketing the existing service to the existing customers. This will be an opportunity for the revenue to increase, repositioning the business. An example of this could be that the business changes from it current business ownership of a sole trader into a private limited company, or just promoting the service.

Another opportunity that the business can do is to go through marketdevelopment, which is marking the existing service in a new market. This means that the service will remain the same but it will be marketed to a new audience. An example of this could be offering services to care homes for the elderly.

Going through Product development could also be an opportunity for the business. This is when a new service is marketed at the existingaudience. This could be a development to improve the service offering additional services. An example of this could be if the ironing service looked into offering a ‘washing’ service.

Another route the business can take is diversification. This is where the business could market a completely new product to a completely new audience. The business could potentially go through two types of diversification; related or unrelated. Going through related diversification route would mean remaining in a market or industry similar to it existing position. An example of this could be the ironing service diversifying into selling clothes care

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products. Were on the other hand, if the business went through unrelated diversification, this will mean that the business will be entering a market that we haven’t had any experience in. An example of this could be if the ironing service diversified into offering a currency exchange service.

Personal details of borrowersBrief details of the owner(s) of the business; each member’s strengths; what each member will bring to the business

Aminat Amodu Funmi AkinwandeHas an A level in business and IT Does a module in entrepreneurship

and has experience in customer service

Josie Weller Adam BenjaminOrganisational skills and time management

Negotiation skills and holds a full driving licence

Marketing

Primary ResearchFor our primary research, we chose to conduct a questionnaire. The reason why we a questionnaire was because it would give us first hand information, to find out more general information, other than secondary research, to find out what our target market wants.

The questionnaire contained questions on about how people feel aboutironing. Producing a questionnaire was a good way of gathering information on customer needs and wants and how they may feel on a new domestic service such as ironing if it was offered to them. The aim of the questionnaire was to help identify and achieved our aims and objectives to find out information about domestic service taken out in homes and whether there is enough advertising to get them to take out these services. We also chose to use a questionnaire because this was an easy and quick way to receive information to find out the views and opinions of the respondents. This was also a

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way of establishing what target market would be best to aim the service at when it comes to advertising. Doing this will allowed us to see and identify whether there are any specific details that may be needed to be consider when it comes to the marketing section of our business.

Questionnaire and Results

1. How long do you think you spend on ironing a week?

This question was used to get a rough percentage of the length in which the sample spends of ironing a week. This question was placed to try and achieve the objective to establish how long people spent on household chores such as ironing. By placing this question in ourquestionnaire this allowed us to achieve one of our market research objectives with the support of secondary research (National Statistics). This proved to show that people roughly spent 21 hours a week on ironing.

2. Who normally does the ironing in your household?

This question was placed to identify the target market by directly asking the respondent who normally did the chores of ironing in their homes. This question was used to acknowledge exactly who did the ironing in their household in order identify who exactly we aim our business to. Having done this, the target market was mainly mothers and wives in which they were categorised as either housewives or full time working mums. This helped gained informationinto the best type of advertising that would appeal to our target market.

3. Have you every purchase a household service?

This question was to determine whether or not there was a market forour business. This question was also to gain information on whether the target market would be more likely purchase a service like our,

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(gaining information on whether they had purchased one like it before). Having collected this information, it showed that majority of the population hadn’t purchased a household service however was interested in one especially as question 2 proved information on whonormally did house chores such as ironing.

4. How regularly do you require dry cleaning services?

This question helped identify other home service that the respondentnormally took out. Setting up our business would help the target market to spend less money on dry cleaning bills and spend a fraction on a simple ironing service like ours.

5. How often do you visit the laundrette?

This question also linked with question 4, where identifies servicesthat the target market took out to get the garment clean and pressed. We feel opening a service like ours will help get less people to spend less money in laundrettes, resulting in them washingtheir clothes at home, in which our services would come in place, with our target market spending less on laundrette costs as well as dry cleaning. This question also identify that our business could potentially venture into providing other services such as washing and drying as most of the population said that they had gone to the laundrette to either wash or dry their clothes however had to then go home to iron them.

Although our questionnaire was quite short, it consisted vital questions that we thought would help us develop an effective business plan. However to use this drawback to our advantage, instead of making the respondent fill the questionnaires in by themselves, we asked the questionnaire to them. This allowed us to develop a type of conversion on chores in which we also gain other information due to using this method of one to one interactions. We feel using this technique, rather than just making the respondent filling the questionnaire; allow us to gain extra information about

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the sort of business the target market would want linking to achieving our aims and objectives of our research and the business.

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Secondary Research

Who are our target audience – why?Looking at research, we choose to target our new business women as

research from the national statistic website proved that 42% of the

time spend by males and

females on clothing related

activities was accounted for

by ironing, with 39% of time

spent on laundry. The chart

below shows that females

contribute to a total of 85%

of the total time spent on

laundry and clothing related

activities, with males

contributing to only 15% of

their time. This proves that females spent more than twice as much

time on ironing than males spent in total on clothing related

activities.

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http://www.statistics.gov.uk/hhsa/hhsa/

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Our CompetitionLooking at Google Map UK, we searched other ironing services in

Sittingbourne and nearby. Results showed that there were only 2 in

Sittingbourne however there were a few that surrounded the area.

Here is a map showing our direct competitors. AA Ironing services

and Domestic Bliss Services are the only two ironing services

business in Sittingbourne.

This map shows the competitors in the surround areas of

Sittingbourne. The competitors outside Sittingbourne are outside the

5 mile radius in which customers said they would only like their

laundry to go no further than 5 miles, (Questionnaire) these include

surrounding area such as Iwade, Teynham, Tunstall, Upchurch and

Rodmersham.

Google Map – Ironing Service, Sittingbourne

http://maps.google.co.uk/maps?hl=en&q=ironing%20services%20in%20sittingbourne&um=1&ie=UTF-8&sa=N&tab=il

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Although the two current businesses in the area would be classed as competitors, they could potentially be of help on how to set up the business and could explain what to expect when setting up a business such as an ironing service. It could help set a price on what the business would give to customers and see what they offer, so I could give my own unique selling point.

The business will be aimed at people who have very tight schedules and mostly targeted at full time parents, which makes it a service that needs to be efficient and get the job done well, which is unlike any other as research has shown it can take up to 4 days for their clothes to be returned, from chain businesses especially.

SWOT Analyse Strengths Weaknesses

The strengths of my business are:

One bag, one Price Laundry is collected and

delivery free of charge Top of the range equipment

are going to be used Any garment can be done Clothes will be folded

or/and hung before the garments are returned to the owner (the customer)

The weakness for the business are:

The business only offers an ironing service

The business only accepts washed clothes

Customers are only limited to the custom made bag

Opportunities Threats

The opportunities for the business are:

Could go into washing laundry

Could expand into a dry

The threats to the business are:

Laundrettes that already offer ironing services

Dry cleaners

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cleaner Could work with charities

with old clothes Could offer repairs and

alterations services

People could continue to do their own ironing to save money

Features and BenefitsBelow is a table that shows the features and benefits of the

business. These features will eventually prove to be beneficial to

our target market, meeting their needs and wants more specifically

comparing to the other competitors, in which they may not be able to

afford.

Features Benefits

“Just a Crease Away” will offer a free of charge collecting and delivering

The customer will not have to need to collect or delivery their laundry to be ironed.

“Just a Crease Away” offers a custom made bag

The customer will be able to put anything there wanted in their bag. The bag will be reusable and customer will notneed to worry about the transportation of their clothes.

The customer will have to onlycall to get their laundry to be serviced

Customers will be able to callin their own convenient time to book a time in which their can be picked up.

“Just a Crease Away” will assure that customers laundry is pressed and delivered within 48 hours or customer can choose when they would prefer to get their laundry back

Customers will be able to state when would be the best time for their laundry to be collected and delivered.

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The table above links with the SWOT analysis we have created

(above), also suggesting and highlighting opportunities and threat

as well as the strengths and weaknesses on the business.

Having sum up the features and benefits of our business, we feel

that these are our unique selling points of our business; however we

had to consider what other competitors were doing in term of

pricing. After researching competitors’ prices, it proved that our

competitors did not charge set prices for any of their services but

charge on the bases of weight or quality and quantity. We felt this

was an opportunity to be the first to enter the market with a

service that offer a reusable bag and charge a set price, as this

was what our target market wanted, (questionnaire). We have worked

out a cash flow and a break even and this has proved that if we

charge a certain amount for our service, it has forecasted that we

will make a profit.

PriceThe business will be home based, which means no money spent onshop rental, however this does mean that money will be spent on petrol to collect and deliver the laundry, but due to previous research within the business this wouldn’t have that much impact on the money made because people using this service will potentially being earning more than enough to useit, so make the prices relatively high.

From our market research and our own knowledge we believe thata reasonable price for customers to pay would be £10 for a 15 kg bag of clothes to be done.

PlaceAs the business is home based, our

business will run from home, where a

room will be allocated for business’s

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Google Map - Sittingbourne

production. Our service will only be distributed to consumers

living within Sittingbourne and within the surrounding area. This

means that that our service will be distributed directly to the

customer.

However, we will need to build up assure customers that their

laundry will be serviced in a clean environment, perhaps considering

opening a shop if we gain extra funding. We could then consider

employing other employees as this may prove to attract more

customers. If we opened a shop, this could also open the opportunity

to offer other service such as washing, repairing and alterations.

This will give us the opportunity to offer our target market a

package that can be brought to them or they can get it themselves.

PromotionPotential customers would to drawn by adverts put in local launderettes in the area, on the local radio, put flyers/leaflets throughout the community and placing an ad in the local newspaper.

The most effective less costly form of advertising would placeflyers/leaflets in local launderettes, dry cleaners, after school where the parent wait and drop their kids, on cars at supermarket car parks and through people doors.

To place an ad on the local radio station would be ideal as research showed that people listen to the radio while ironing to entertain them. And perhaps on the way to work, when they may realised that they may need a service like an ironing service to cut through piling household chores.

Product Life Cycle for Promotion

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Production

How the service will be providedOur service will be provided when the customer calls our business

number in which they’ll request to get their laundry to be picked up

in the custom made bag. We will then take down their information

such as their name, address, phone number and when would be an

appropriate time to pick up their laundry.

An example is stated below:

Name: Jenny Foster

Address: 9 Milgate Drive, Sittingbourne

Tel/Mob No.: 01795425789

07967462768

Pick up: Tuesday 19 April 2009

Time: 1:00 pm

Drop Back

by:

Thursday 21 April 2009

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Time: 6:00 pm

This will then be noted in a log book and if everything works out,

the driver will turn up at the customer door in a van pick to up

their laundry. At this point we will also ask when they will want

their laundry to be returned, noting down details such as the date

and time.

The difference stages of production/delivering the service The stages in which “Just a Crease Away” will take to delivery it

service will be:

1. Firstly advertising the business through advertisement in

newspaper and radio as well as leaflet distributed through

consumers letterboxes.

2. Their will call up to discuss when there want their laundry to

be picked up and how soon they need it back

3. This information will be recorded in a log book

4. The laundry is collected by van (As the business target to get

customer laundry done within 24/48 hours (unless otherwise:

more bags, stockpile) the laundry should be delivery back to

the customer by the next day)

5. The laundry will be ironed, folded or put on hanger (also

consider customer requests). If folded, the clothes will be

replaced back in the customer labelled custom laundry bag.

6. When the laundries are delivered, customer will check the

clothes are ok and have the right bag. Then the customer will

pay if they are satisfied with the service.

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What equipment and machinery will we need to produce our service? How much will this cost?

Item UnitPrice

Qty

Itemprice

Resource Image

Renault Kangoo 1.5 litre Diesel Van

£995.00

1 £995.00 www.autotrader.

co.uk/van

Laura Star Premium Evolution

£431.25

1 £431.25

www.ironingsupplies.co.uk/

White Wire hangers

£25.00

500

£0.05www.ironingsupplies.co.uk/

Starch £1.91 100

£0.02

www.ironingsupplies.co.uk/

Customer Label

£3.50 500

£0.01

www.ironingsupplies.co.uk/

5ft Heavy Duty Garment Rail

£196.62

3 £65.54 www.ironingsupp

lies.co.uk/

Ironing Bag 15kg x10

£1.61 40 £0.04

www.ironingsupplies.co.uk/

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Ironing Chair £24.99

1 £24.99

http://www.sales-services.co.uk/html/ironing_chair.html

Long table for folding

£39.95

1 £39.95

http://www.foldingwarehouse.co.uk/folding-tables

Clothes folding tool

£19.98

2 £9.99 http://www.pentagondirect.com/p/bobhome-00490343-board-for-folding-clothes

Large StorageUnit

£325.00

1 £325.00

http://dwell.co.uk/101918

Foam Guards x50

£0.16 2 £0.08 www.ironingsupplies.co.uk/

Pink – Variable costsBlue – Fixed costs

Equipment and machinery requiredAs the business will need certain machinery and equipment to fulfil

it services, these will be purchased with the funds requested from

the bank loan and our redundancy payments we received (£1,500

x4=£6000).

Below is a table showing all the machinery and equipment needed to

perform my service, also stating whether the items is fixed or

variable cost. The table below show all the equipment and machinery

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are all the essential items that will be needed to carry out the

ironing service as well as the van and insurance for collecting and

delivering.

Fixed Costs Variable Costs

Renault Kangoo 1.5 litre Diesel Van White Wire hangers

Car Insurance Starch

Vinyl lettering & graphics Customer Label

Mobile Phone Contract Ironing Bag 15kg

Laura Star Premium Evolution Foam Guards

Ironing Chair

Large Storage Unit

Long table for folding

5ft Heavy Duty Garment Rail

As these are the equipments and machinery that we’ll need to carry

out our service, they will also be either fixed or variable costs

that will occur in the expenses of the business. The fixed costs

will be the items that will be used over and over again until their

need replacing were as my variable costs are the items will need to

be reorder as they run out.

How quality will be maintained and assuredIn order to maintain quality within our business and service, we

will focus on making sure customer’s laundry is treated with care.

This will mean that if customers are not satisfied with the service,

they’ll get their money back. In order to make sure this doesn’t

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happen, we will service our iron every month and use starch on

garment that need it. We will also provide foam guards on hangers so

these do not create bumps or rust on customer garments. As each set

of bag is ironed, each bag will be allocated a space on the garment

rail or on the storage unit. This will then notify the driver that

the clothes are ready and will be need to return at some point. We

will know that the bag of laundry will need to be returned to the

right owner as the bag will be labelled stating the customer name,

address and the time in which it need to be returned by.

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Finance

Where we will obtain finance? Looking on moneysupermarket.com, it showed that the best bank to

get a small business loan was from the bank of NatWest. If we borrow

£2000 and all put in our redundancy payment of £6000 (£1500 x4),

this will cover the costs of the equipment we need for the business

and other costs that may occur. When we calculated the cost of all

the equipment we’ll need to set up the business, it came up to about

roughly £2000. Therefore we will be taking out a loan of £2000 from

NatWest bank. When we take out this loan, we will have to pay an APR

of 8.4% over a period of 12 months.

What are the difference expenses that we will incur in the running of our business?The table below explains the different expenses that will occur in the running of our business: -

Item Price per year Price permonth

Price per week

Bank Loan £2000+APR £174.07

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Petrol £960.00 £80.00 £20Car Insurance £1,796.58 £146.72Mobile Phone Contract

£20.00

Maintenance(road tax, MOT,servicing, etc)

£200

Maintenance will include other expenses that may occur within a

month. These could include issues that have to do with the car e.g.

service, mot, etc and the servicing of the iron as it will be used

for long periods of time (recommend by

http://www.allironedout.co.uk/how_it_works). These costs will vary each month depending on the circumstances.

All of the items mentioned above are also know as variable costs.

This is because these items are costs that change in proportion to

sales and other circumstances. These will be item that will be

needed to be bought frequently in order to sustain and maintain the

quality of our service.

Break EvenTo identify our break even, we had work out how many bags we’ll need

to iron in order to start making a profit. The first table (in the

screen shot)does not state the exact number of bags we’ll need to

break even, however we do know that the business will break even

between 600 and 800 bags a year.

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Having the actual number of bags that need to be services before

breaking even, we found that we would need to do 732 bags in a year

to break even. We got this figure by using the break even formula of

– by dividing the fixed cost by the unit of contribution (selling

price – variable). We feel we can achieve these amounts of bags in

a year as we have allocated to work 5 out 7 days in a week to get

through at least 16 bags a week working out roughly 3 - 4 bags a

day.

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Cash Flow

This is a screen shot of our cash flow. It clearly shows that the business will slowly start of with£34.32 in the first as there will be a lot of payment to be made. However, as the business picks up, we’ll start to make profit as less money will be going out.

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Loss making Zone

Profit making Zone

Break Even Point

Break Even:

732 bags a year

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00 Net Cash Flow

Month

£

Above is a graph show the business’s net cash flow. These figures were created from taking away the total payments from total receipts.

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00 Closing Balance

Month

£

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From our cash flow, we were able to make a graph on our closing balance, showing that the business has the potential to do well.

Profit and Loss

Having produced a profit and loss, it shows our business may make a net profit of £4.589.08 in the first year of running.

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Balance SheetFixed AssetsRenault Kangoo 1.5 litre Diesel Van

£995.00

Laura Star Premium Evolution

£431.25

Ironing Chair £

24.99

Large Storage Unit £

325.00

Long table for folding £

39.95

5ft Heavy Duty Garment Rail £

196.62

Clothes folding tool £

39.74

Vinyl lettering & graphics £ 70.00

Total Fixed Costs £ 2,122.55

Current Assets

Cash

£10,466.53

Current Liabities

Creditors £ -

Assets - Current Liabilities

£12,589.08

Long Term Liabilities £ 2,000.00

Net Assets

£10,589.08

Capital and Reserves

Profit and Loss £ 4,589.08

Capital £ 6,000.00

£10,589.

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08

Looking at our balance sheet, it shows that the assets and

liabilities that “Just a Crease Away” has as a business. These

include long term liabilities such as the loan of £2000 from the

NatWest (bank).

The last figure of £10,589.08 is the cash in which we predict our

business will make after a 12 month period. This figure comes from

the closing balance from our cash flow spreadsheet. This would be

the figure that we will take forward into next year as our opening

balance. This figure is also the net current asset. This is because

this is the capital that will be available to help us run the

business on day to day bases. So therefore it is the working capital

for “Just a Crease Away”.

Conclusion and Evaluation – Summary TableConstraints Positives

Strengths and OpportunitiesNegatives

Weaknesses and Threats

Internal

The aims andobjectives ofthe businessas a whole

To make a Profit To provide a service

that is less than the competitor

Research aimsand objectives

To identify who the target audience are, include age; gender; social economic group

To establish how long people spend on household chores such asironing

To identify how much customers are prepared to pay for a service like mine

To identify other competition in the same market

Who normal carry out chores such as ironing

To identify how much people spending on domestic (household) services

To identify what form ofadvertising will attracts customers to consider an ironing service

To identify how much it will cost to set up a home based ironing service?

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in the household?

MarketResearch

Legitimate websites Statistics and graphs

Out of date Opinion based

The message tobe

communicatedand the target

audience

Identification of the actual target market

Other potential target audiences

Best times

Product(service) Life

Cycle

Recognition of certain promotional activities

Detail

Financial

Economic conditions

Start-up Costs

Interest rates Recession

External

Social,Cultural andEconomic

Fashion Trends Employment Rates

Employment Rates Single mothers

Ethnical andEnvironmental

Waste disposal

Energy usage/disposal

Recycling

Legislativeand Regulatory

Business Names Act Liability Insurance Business Ownership Consumer protection Electrical Safety Act

2002

Business Names Act Liability Insurance Business Ownership Health and safety

Competition Competition Competition

Competition based pricing

Technology Internet Mobile phone Modern equipment

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Bibliography

1. http://www.marketingteacher.com/

2. www.aaironing.co.uk/

3. http://www.domesticblissironing.co.uk/

4. htp://www.maps.google.co.uk /

5. http://www.statistics.gov.uk/

6. http://www.ironingservicedirectory.co.uk/

7. http://www.moneysupermarket.com/small_business_loans/

8. http://www.natwest.com/business/products/borrowing.ashx

9. www.ironingsupplies.co.uk/

10. http://www.bplans.com/

11. www.bized.co.uk/learn/

12. http://www.allironedout.co.uk/how_it_works

13. http://www.ehow.com/how_2104123_start-ironing-service.html

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Self Evaluations

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