Benefits And Components Of A Business Plan – Ozhouse Clean

Benefits of having a business plan

Briefly discuss three (3) benefits of having a business plan.

1. Having a business plan can help in testing the idea that it is feasible or not for starting a business. As the business plan is an important tool for starting a business.
2. Business plan benefits an organization in attracting investors. The presentation may gain their interest but they will need a well written document to ensure themselves that they are investing in the right organization (Stutely, 2012).
3. With the help of a business plan, one can regularly review assumptions, evaluate performance, and able to recognize new developments.

Written Response Two

Briefly list five (5) common components of a business plan.

1. Description about company

The first thing in the business plan is the description about the company. Description of the company includes the business model of the company, investors, suppliers, manufacturers, customers, vision and mission.

1. Products and services

Products and services sell by the company is also the part of the business plan.

1. Market analysis

Market analysis is one of the major components of the business plan which is considered by the business managers at the time of planning. Market analysis involves the data related to target of the market, profiles of the ideal customers and market research. Market analysis further involves the trends in the market area and industry. This is further help in knowing about the current demand of the consumers (Finch, 2016).

1. Financial plan and projections

Financial projection is also one of the components of business planning process. This analysis includes information such as revenue growth and different market trends.

1. Strategy and implementation

This component includes the implementation of the planning process that is critical to company success. This further address who, where, when and how of reaching the anticipated objectives.

Written Response Three

Briefly discuss the purpose of the business planning process.

There are two purposes behind business planning process which is mentioned below.

A business planning process helps to run a business with a more consistent vision. In short business planning process plays the role of road map for an organization as it helps in analyzing the pan for marketing, sales, manufacturing, website design and many more.

The second purpose behind business planning process is that the most of the clients demand for the business plan to make sure that they are not investing in the wrong organization (Ward, 2016).

Written Response Four

Briefly discuss the purpose of a business vision.

The purpose behind business vision to give the business a strong focus as the vision of the business can stop the business from getting into the wrong direction. The vision statement of the business clearly defines the future goals of the organization which ultimately attracts the attention of the investors.

Written Response Five

Discuss three (3) areas that a business planning process may address

Business description:

Business description plays an important role in business planning process. Business description involves business model, relationships, principals, legal structure, market opportunities and the projected growth. This description helps other to connect with the organization (McKeever, 2016).

Common components of a business plan

Market analysis:

Market analysis is one of the elements which are addressed by business planning process. Market analysis involves the data related to target of the market, profiles of the ideal customers and market research. Market analysis further involves the trends in the market area and industry.

Financial projections

Financial projection is also one of the elements of business planning process. This analysis includes information such as revenue growth and different market trends,

Written Response Six

What is the purpose of a SWOT analysis in a business planning process?

Framework of strengths, weakness, opportunities and threats plays very important role in business planning process. The purpose behind this framework is to help the managers to know the strengths, weakness, opportunities and threats of the organization which could ultimately impact the success of the organization. In any case, the organization fails to consider the strengths, weakness, opportunities and threats; it will lead the organization towards poor business decisions (Helms & Nixon, 2010).

Written Response Seven

Briefly discuss why it is important for a business to use a range of performance measures.

It is very important for a business organization to use a range of performance measures as it provides following benefits which are mentioned below.

1. It ultimately improves the overall productivity of the organization.
2. It suggests the ultimate improvements which is required in the organization.
3. It also describes the exact position of the organization.
4. It helps managers in recognizing the best practices in the organization and expands the usage of it elsewhere (Chadwick, 2013).

Written Response Eight

List three (3) performance measures that could be used to measure customer satisfaction.

1. Loyalty measurement

Customer loyalty can be recognized by repurchasing of products and services by the consumers. However customer satisfaction is major interpreter of repurchase but is strongly affected by explicit performance evaluations of the product value, quality and presentation (Instruments, 2011).

Customer loyalty can be measured by the sum of scores for the below points.

• The level of satisfaction of the customers with the brand.
• How likely the customer to continue purchasing the product.
• Will the customers recommend about the products to other people?

1. Overall satisfaction measure

Overall satisfaction measure can be defined as the overall opinion of the customers about the product that whether the consumers are satisfied or dissatisfied with the product. Here satisfied implies positive ideas such as “it was a great choice” or “I am happy from my purchasing”.

Overall satisfaction can be measured by following 3 points.

Overall worth

Recognized reliability

Scope of customer’s requirements fulfilled

1. Attribute satisfaction measurements (affective and cognitive)

Customer satisfaction gets affected by perceived quality and service attributes. Attribute satisfaction can be measured by knowing the attitude of the customers towards the product (Smith, 2012).

Written Response Nine

Discuss the balanced scorecard approach in relation to performance measurement.

The balance scorecard approach can be explained as the performance matric which is used in strategic measurement to recognizing and improvising the internal functions of the business organization which can also affect the external factors of the organizational environment. It is basically used to measure and deliver feedback to the organization. This approach was originally developed by Dr. Robert Kaplan as a systematic approach to measure the organizational performance (Jeston&Nelis, 2010).

Purpose of the business planning process

Written Response Ten

Performance measures should be tested against SMART criteria. What does SMART stand for?

Performance measures should be examined against SMART criteria. SMART is a mnemonic abbreviation that describes the criteria which helps in leading the objectives. A SMART criterion is basically used in project management, employee performance management, and personal development. It ultimately delivers a broader definition of setting the goals:

• S is for Specific.
• M is for Measurable.
• A is for Achievable.
• R is for Relevant.
• T is for Time-bound.

The Smart criterion is commonly attributed to Peter Drucker’s Management by Objectives.

Executive Summary

Ozhouse clean is a company which offers and delivers professional, residential cleaning services. It further includes regular home cleans and spring cleans. It is located in Melbourne and was established in 2005. It is one of the types of family business as it’s both the directors are husband and wife and their two daughters are operations manager and administration manager. It has total 70 regular clients and 15 cleaners. All the 15 employees are part time staff working 10-15 hours in a week. For the year 2015, it has generated $360, 0000 sales revenue including $40,000 profit margin.

Vision

We are constantly working to establish ourselves as the most respected and sought after contract cleaning and facilities support service in Melbourne.

Our values are

Values of the company can be explained as follows: · Respect: taking time to understand and value each person and respecting their choices. · Responsibility: acting with integrity towards our staff, our customers, the community and the environment. · Caring: a duty of care for our staff, customers and the environment. · Excellence: to always look to provide the best quality experience with regards to our cleaning and our customer service. · Integrity: to act with honesty, openness and do what we say we will do. · Innovation: to be industry leaders.

Strategic Objectives
Objectives: Our key objectives, which are fundamental to our business of delivering world-class cleaning and customer service, are as follows: · Provide our customers with a professional and friendly service. · To increase the number of clients by 20% in the first year of introducing commercial cleaning services and 10% thereafter. · Meet or exceed the expectations of customers. Implement best practice in cleaning operations, including environmentally sustainable practices.
Actions
The following table identifies the actions we plan to take to achieve our strategic objectives
Date	Actions	Key performance indicator
Include month and year	Include specific actions to achieve strategic objectives	Include key performance indicators
2015 – 2016	This company has been expanded and diversified into the commercial cleaning market to achieve the desired objectives. The company is offering environmentally-friendly cleaning services. The company is also thinking to offer carpet cleaning services.	· The services have been providing on a very reasonable prices. · Maintaining good relationship with the customers. · Most of the marketing is done through word of mouth that is from existing customers

The Market

Market characteristics and conditions

It has total 70 regular clients and 15 cleaners. All the 15 employees are part time staff working 10-15 hours in a week. For the year 2015, it has generated $360, 0000 sales revenue including $40,000 profit margin. Most of the cleaning suppliers usually purchased goods from Total Cleaning Suppliers in Melbourne. Nevertheless this company is not offering environmentally friendly products. The company believes a point of difference from its competitors that the company is runs a small type of business with a focus on quality and happy contended staff and customers. The management team of the company believes that this point of difference should be changes as the business grows.

Situation Analysis
Include a SWOT analysis here
Strengths	Weaknesses
· The biggest strength of Oz clean that it is providing eco-friendly cleaning services to its customers. Nowadays, most of the people prefer eco-friendly services. · Guaranteed satisfaction has been provided by the company. · Consistent quality.	· The biggest weakness is that it is a labour intensive industry. · Face difficulties in building trust, establishing brand equity as a small business
Opportunities	Threats
· There is a high demand for cleaning services as most of the people are working. They don’t get enough time to clean their house so they search for people who could clean their house. · Also the number of commercial buildings and residential homes has increased the demand for cleaning services. Therefore the company can create the room for success quite vast. · Apart from this the Health Care Industry being the in charge of eco-friendly business practices and improving the sanitation and hygiene standards at workplace as well as in residential areas increasing the need of cleaning services. It is making “cleaning” necessity for everyone.	· Competitors could be a major threat to the company as Ozhouse clean is a type of small business company. · There is a risk of damage to customer’s property while cleaning. · Also one can slip down on the floor unaware from the time of cleaning. Other threats like Chemical exposures, employee occupational injury.

Marketing Strategies

New marketing strategies New marketing strategies involved diversification into commercial market to attract the commercial consumers. The company is thinking to expand the business to the commercial markets also. As the company is only working and providing services in residential areas only so the company now want to enlarge the size of the business by working for different markets such as commercial buildings and other related buildings. The company will now offer environmentally-friendly cleaning services. As nowadays most of the people are conscious about the products have been used for cleaning their houses and buildings because there are many cleaning products which contains harmful chemical and can harm people’s health. Therefore company decided to offer environmentally-friendly services only. The company is now considering offering carpet cleaning services. The company was not offering the carpet cleaning services. Now to diversify the service line of the company and to increase the sales of the company, the company will offer carpet cleaning services also. The company will offer cleaning services at very reasonable prices. To beat the high competition in the market or to grab the market share, the company is providing the services on very reasonable prices. The company also want to establish itself as the most respected and sought after the contract cleaning and facilities support service in Melbourne.

In the business plan meeting, the plan that is made for a new business or the existing one is discussed with the CEO and the Board of Directors of the company.

People sitting in the meeting are:

Steve: Steve is the CEO of the company.

Winston: He is the board of Director and most of the decisions are in his hands.

Paula: Paula is Winston’s wife and also the board of director of the company.

Steve: I am here to share the business plan of the company. This is a small scale company and we want to grow the organization to a bigger scale. The future plan for the company is to provide our customers with the services they seek for by being friendly and supportive. The objective to do t his is by increasing the number of customers by 20% and thereafter increasing this percentage to 10% every year. The number of customers will exceed by fulfilling the customer’s needs and expectations. For this, we think to grow ourselves in the global markets this year. Providing services in the areas that are residential is one of the key factors we would take care of. In case if anyone has any suggestions or feedback. It would be highly appreciated.

Winston: The business seems good Steve. We just will have to make sure that the growth of the company is increased by 20% this year. We should make sure that our existing customers should be with us and we should not forget them in order to get new customers on board.

Steve: I shall keep that in mind, Winston. I shall share an email with the final business growth plan with you all.

To,

The Board of Directors and Team,

Subject: Final Business Plan for Oz Clean house.

Hi Team,

This mail is regarding the final business plan we have come up with after the discussion with Winston and Paula. The final business plan is:

• Increase the profit by 20% this year and 10% every year when 20% is achieved this year.
• Keep the customers satisfied by supporting them and giving them best services.
• Make the organization reach in the global markets to get new customers.
• To be loyal to the existing customers by providing them the best services promptly.

Importance of a business vision

This is the final growth plan for the development of Oz Clean House. Please adhere to the above mentioned points and start working on them to achieve the goals by the end of the financial year.

	2015	2016	% change
Sales	360000	450000	25%
COGS	320000	320000	0%
Gross profit	40000	130000	225%
Debtor days	40	30	-25%

As per the scenario provided, the sales in 2015 were $360,000 having a cost of goods sold of $320,000. The gross profit in that year was $40,000. Thee labour cost comprises of 70% of the total cost of the business. In year 2016, the sales increased to $ 450,000 and COGS remains the same. Due to the upsurge in sales, the gross profit for the business rises to $130,000, more than the double of the amount in previous year. In this year, the debtor days also reduces to 30 days which indicates a good performance. However, except from revenue and gross profit margin, the remaining performance indicators are not been met in 2016.

1. The performance indicators assumed are as follows:

• There should be a total 20% increase in business sales
• A gross profit margin of 20% is to be maintained.
• There should be a reduction of 50% in the debtor days.
• 10 new commercial customers are there in the first year of business plan.

On the basis of above indicators, the data for the two years is been compared and is graphically presented.

The above graph shows the financial data for the year 2015 and 2016. It can be observed that the first performance indicator of increasing revenue by 20% is been met as the amount of sales in year 2016 has been increased by 25%. While COGS remains same, the gross profit rises by 225% which is way more than the set percentage or it. However, there is only 25% reduction in the debtors days while, as per the indicator the reduction must be of 50%. The last indicator was to bring 10 new customers as a result of which in 2016, the 15 new customers are identified in the business. So as per the analysis, it can be said that all the performance indicators are achieved except the indicator related to debtor days reduction.

1. As per the advice given by administration manager regarding the decrease in previous residential customers, certain performance measures are required to be taken for customer retention. They are as follows:

• Regular surveys on the customer satisfaction can be taken as a performance indicator as it will help in having an idea about the satisfaction rate among customers.
• Providing high quality and extraordinary services can lead to quick retention the clients or customers.
• Measuring the conversion rate that is how often customers placed an order when the service team interacts with them.

1. From the evaluation made, it can be recommended that the mentioned measures should be taken to increase the number of residential customers so that residential sales can be improved. Also the business should focus on reducing its debtor’s days as it will improve its liquidity position. In the coming year, target should be to increase the total revenue as well as residential revenue along with the increased gross profit and reduced cost.

Contract Cleaner: Chris Weinstien

Operations Manager: Gordan Duffield

Subject: To discuss and identify areas of concern

 I would like to conduct a meeting with you as I want to discuss the areas of concern which the company is facing with its work.  

Date of meeting: 20^th April, 2018

Time: 11.00 A.M.

Please revert back to this mail in case of any concerns.

Thank you,

Gordan Duffield

Operations Manager,

OZ Clean House Pvt. Ltd.

Chris Weinstein: Hello Sir, Good morning! I am Chris, contract cleaner for the company.

Gordan Weinstein: Hi Chris! Hope you are doing well. I would like to discuss some of the areas where we need to improve. There are some of the points which I would like to take care of from next time. We are facing a few minor issues in our cleaning services. The customers have requested to change a few things in our services. The changes that are expected to be are:

• The surfaces and the floors, tops of benches and the shelves should be cleaned in a way that they should be free from the dust.
• The dust bins should be cleaned so that they do not smell.
• The mirrors and showers should also be very clean and free of streaks.
• The products which are given to you for cleaning should be used efficiently.
• Please adhere to the time on which the service was to be done and it is to be done within the given period of time.

You can share your views if there are any.

Chris: No Sir! No concerns. I shall adhere to all the points. Thank you for letting me knows about the concerned areas.

Gordan: Thank you Chris. It was nice meeting you.

Hi Chris,

Subject: Minutes of meeting from 25^th April, 2018.

This mail is to share the minutes of meeting that was conducted between us yesterday. The points which we agreed upon are:

• The surfaces and the floors, tops of benches and the shelves should be cleaned in a way that they should be free from the dust.
• The dust bins should be cleaned so that they do not smell.
• The mirrors and showers should also be very clean and free of streaks.
• The products which are given to you for cleaning should be used efficiently.
• Please adhere to the time on which the service was to be done and it is to be done within the given period of time.

Please adhere to all the above mentioned points and I hope, we will get positive feedback from our customers next time. You can revert back in case of any concerns or issues.

Thank you,

Gordan Weinstein

Operations Manager,

OZ Clean House Pvt. Ltd.

References

Chadwick, G., 2013, A systems view of planning: towards a theory of the urban and regional planning process. Elsevier.

Finch, B., 2016, How to write a business plan.Kogan Page Publishers.

Helms, M.M. and Nixon, J., 2013, Exploring SWOT analysis–where are we now?.Journal of strategy and management.

Instruments, D.P., 2011, Business model management.

Jeston, J. and Nelis, J., 2010, Business process management.Routledge.

McKeever, M., 2016,How to write a business plan.Nolo.

Smith, S., 2012, How to Measure Customer Satisfaction: Do You Overlook these 4 Key Customer Satisfaction Measurements?[online]. Available from https://www.qualtrics.com/blog/customer-satisfaction-measurement/ [Accessed on 5 April, 2018]

Stutely, R., 2012,The definitive business plan: the fast track to intelligent planning for executives and entrepreneurs. Pearson UK.

Ward, J., 2016,Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.