Indication of business organization
Dissus about the Indication of business organization?
Bar on the go is a partnership business that is focusing on to provide top-notch bar services for enhancing the popularity in the market. The company focuses four prime factors associated with the businesses for the effective fulfilment of the objectives of the business plan. Bar on the go has focuses on the effective division of the cost associated with the starting of the businesses. For that reason, the organization has tried to influence several investors to cover up the entire cost associated with the start-up. As Bar on the go is a partnership business, it has tried to segregate the entire risks to all the parties equally so that effectiveness of the operational process remains intact. The business of the organization is focused towards the young working individuals in Toronto, as events have become an integral part of their daily lives.
Bar on the go focuses on providing superior quality of spirits for enhancing the satisfaction level of the customers. In fact, Bar on the go is trying to include different types of foreign popular alcoholic beverage brands in order to provide more varieties to the customers. Furthermore, the organization is also focusing on to provide entire planning solutions for the private parties and wedding ceremonies. In fact, the organization is also looking to provide multiple bar solutions to create appropriate atmospheres in the private parties. It also has tried to develop new speciality drinks for achieving sustainable growth in the market.
Product:
It can be assessed that Bar on the go is looking to utilize both products and services for creating popularity in the market. For instance, it has tried to provide speciality drinks so that it can have impact on the popularity level in the market. It has also focuses on to provide multiple bars for the private parties so that people can enjoy at the fullest (Goi, 2015).
Price:
As per the article by Cameron et al. (2015) price plays a crucial role in fulfilling all the objectives of the organization in an appropriate way. Now, Bar on the go has several competitors namely BartenderOne, Hire a Bartender. For that reason, Bar on the go is focusing on to utilize cost effective pricing strategies in order to gain competitive advantage in the market. The cost effective pricing strategy will allow the organization to target people belongs to different income group. Now, in order to maintain the price level below from the competitors, Bar on the go will try to evaluate the market situation in continues way.
Marketing plan
Promotion:
As Bar on the go is dealing in extremely competitive business environment, it will have to focus on the effective utilization of promotional techniques. For that reason, Bar on the go will look to utilize print media and social media platforms to reach to the potential customers in an appropriate manner. In case of print media, Bar on the go will focus on newspapers and business magazines to reach to the potential customers in an appropriate manner (Festa et al., 2016). On the other hand, Bar on the go will try to utilize picture and gripping blogs to grab the attention of the customers. The organization will consciously try to develop all the promotional campaigns for the young people, as they are the prime target for the organization (Hatten, 2015). For that reason, Bar on the go will also try to utilize radio for creating expected impact on the target customers.
Place:
As highlighted by Mullins (2012) place or location is key for achieving susses in the competitive business environment. For that reason, Bar on the go has only focuses on Toronto for achieving maximum impact on the businesses. It will also tried to evaluate the number of private parties have been arranged in the selected places for the past few years in order to have an idea regarding the future demand that the company might have face in near future.
As highlighted by Krajewski, Ritzman & Malhotra (2013) effective utilization of operational plan is necessary for fulfilling all the business objectives in an appropriate manner. Now, Bar on the go is not only focusing on providing superior quality of alcoholic beverages to the customers but also trying to provide superior quality of the entertainment services in order to achieve sustainable growth of the market. Therefore, the operational plan of Bar on the go focuses on effective development of two divisions including products department and entertainment departments in order to fulfil all the requirement process of the organization (Khalili et al., 2013). Furthermore, Bar on the go is looking only to recruit people with more than 15 years of experience so that all the requirements of the operational plan can be completed effectively. Bar on the go will also look to develop strong relationship with alcoholic beverage product distributors in order to reduce the cost of the operational process (Webber & Hanna, 2014).
The operational plan of the organization will also look to develop capability of providing entertainment to more than 100 peoples at a time. Therefore, it is only trying to include bartenders with optimum knowledge and skills to handle customers in an appropriate way. Apart from the bartenders, Bar on the go will also look to develop strategies to ensure that no events have to suffer from lack of alcoholic beverage items. It has also recruited people with different types of entertainment skills so that people in the parties can spend quality time (Burian & Francis, 2013). Now, providing proper entertainment will not only increase satisfaction level of the customers but also will provide competitive advantage in the market. As the organization is looking to conduct the businesses in the prime areas of Toronto, operational process of the organization also needs to provide specific budget so that all the requirements can be completed in an appropriate manner (Mendibil et al., 2013).
Offered products and services
Financial situation for the 1st year
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Pro Forma Income Statement for Bar on the Go |
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|
Amount (in $) (Debit) |
Amount (in $) (Credit) |
|
|
Revenue |
10000 |
|
|
Closing stock |
1700 |
|
|
Purchase of materials |
4100 |
|
|
Carriage inward |
700 |
|
|
Gross Income |
6900 |
|
|
Salaries to the staffs |
1700 |
|
|
Purchase of stationeries |
300 |
|
|
Purchase of decoration materials |
1100 |
|
|
Cost of foods |
1000 |
|
|
Electricity charges |
470 |
|
|
Other expenses |
700 |
|
|
Net income |
1630 |
(Source: As created by the author)
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Pro Forma Balance Sheet for Bar on the Go |
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Amount (in $) |
Amount (in $) |
|
|
Assets: |
||
|
Fixed assets: |
||
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Furniture |
2700 |
|
|
Machineries |
1400 |
|
|
Total fixed assets |
4100 |
|
|
Current assets: |
||
|
Debtors |
970 |
|
|
Cash in hand |
1470 |
|
|
Closing stock |
1700 |
|
|
Total current assets |
4140 |
|
|
Total assets |
8240 |
|
|
Liabilities: |
||
|
Long term bank loan |
2100 |
|
|
Current liabilities: |
||
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Creditors |
1040 |
|
|
Bank overdraft |
370 |
|
|
Total liabilities |
3510 |
|
|
Owner’s capital: |
||
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Capital |
4400 |
|
|
Reserve |
330 |
|
|
Total Owner’s capital |
4730 |
(Source: As created by the author)
|
Pro Forma Cash Flow Statement for Bar on the Go |
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|
Income from the operations |
1630 |
|
|
Cash flow from operating activities: |
||
|
Add: Increase in current liabilities |
870 |
|
|
Less: Increase in current assets |
510 |
|
|
Total cash from operating activities |
1990 |
|
|
Cash flow from investing activities: |
||
|
Purchase of new furniture |
-1000 |
|
|
Sale of old furniture |
440 |
|
|
Total cash from investing activities |
-560 |
|
|
Cash flow from financing activities: |
||
|
Bank loan taken |
1000 |
|
|
Capital provided by the owner |
500 |
|
|
Total cash from financing activities |
1500 |
|
|
Net cash inflow |
2930 |
(Source: As created by the author)
Financial situation for the 2nd year
|
Pro Forma Income Statement for Bar on the Go |
||
|
Revenue |
12400 |
|
|
Closing stock |
1400 |
|
|
Purchase of materials |
3990 |
|
|
Carriage inward |
700 |
|
|
Gross Income |
9110 |
|
|
Salaries to the staffs |
1700 |
|
|
Purchase of stationeries |
270 |
|
|
Purchase of decoration materials |
1300 |
|
|
Cost of foods |
1400 |
|
|
Electricity charges |
470 |
|
|
Other expenses |
600 |
|
|
Net income |
3370 |
|
|
Pro Forma Balance Sheet for Bar on the Go |
||
|
Amount (in $) |
Amount (in $) |
|
|
Assets: |
||
|
Fixed assets: |
||
|
Furniture |
2800 |
|
|
Machineries |
1600 |
|
|
Total fixed assets |
4400 |
|
|
Current assets: |
||
|
Debtors |
1370 |
|
|
Cash in hand |
1700 |
|
|
Closing stock |
1400 |
|
|
Total current assets |
4470 |
|
|
Total assets |
8870 |
|
|
Liabilities: |
||
|
Long term liabilities: |
||
|
Long term bank loan |
1900 |
|
|
Current liabilities: |
||
|
Creditors |
1190 |
|
|
Bank overdraft |
700 |
|
|
Total liabilities |
3790 |
|
|
Owner’s capital: |
||
|
Capital |
4400 |
|
|
Reserve |
680 |
|
|
Total Owner’s capital |
5080 |
The projected financial statements are showing that at the end of the second year, the company will be able to increase its income level. At the same time, the net cash inflow of the company will also grow up. These indicate that the financial position of the company will be stable and in increasing trend.
Calculating the breakeven point
Total fixed cost of the company = $9000
Variable cost of the company = $170
Sales per unit = $360
Contribution per unit = $360 – $170
= $190
Therefore, Break-even point = $9000 / $190
= 47.36 units
The above calculation is showing that the company will need to produce at least 47.36 units to avoid loss in business. At this point, the company will be at no profit and no loss zone and it will be able to cover up its fixed costs.
Calculating the payback period:
Initial investment = $7000
Cash flow in the 1st year = $2930
Cash flow in the 2nd year = $3220
Average cash inflows = $3075
Payback period = $7000 / $3075
= 2.27 years
The above calculated payback period is indicating that the company will be able to regain its initial investment after 2.27 years. This is also indicating that the financial performance of the company will be good.
As highlighted by Bryman and Bell (2015) development of future-plans allow organizations to move towards a particular direction. Presently, business plan of Bar on the go is only focusing on Toronto market to provide bar planning services. Therefore, it is necessary for the organization to look for business expansion in future in order to achieve sustainable growth in the market. Targeting bigger market will allow the organization to increase the revenue level in an appropriate way. Future-plans of the organization will also have to include more focus on the promotional perspectives. Therefore, it needs to utilize different promotional tools like television and direct marketing campaign in order to increase the popularity level in the market (Hollensen, 2015). Bar on the go will also focus on enhancing the capability in terms of resources so that it can able to handle more than 200 people in a single event.
4Ps of marketing
As highlighted by Lee, Song and Lee (2016) proper utilization of risk management procedure allows organizations to reduce risks associated with the businesses. Now, in order to establish business in Toronto area, Bar on the go has to invest certain amount to ensure that all the requirements of the operational process can be completed in an effective manner. Thus, it also increases the risk level associated with the businesses. For instance, Bar on the go is presently looking to conduct private parties for the young people to gain popularity in the market. However, if the present business plan cannot able to create desired impact on the market; it will try to conduct parties for the corporate houses as well. Furthermore, it will also have to focus on to invest more on the effective utilization of the promotional campaign to grab the attention of the potential customers (Mariotti & Glackin, 2014). Furthermore, as Bar on the go is looking to include employees with more than 15 years of experience, it will have to focus on the effective development of work culture. Otherwise, it will become very difficult for the organization to manage employees for longer period of time.
References:
Bullock, J. R. (2014). How to Achieve Success After the Bar Exam: A Step-by-Step Action Plan.
Burian, P. E., & Francis, R. (2013). Operations strategy: a broader view of threading the vision to the customer. The International Business & Economics Research Journal (Online), 12(12), 1513.
Cameron, G. D., Gryka, R. J., Simpson, D. S., & Chen, A. M. (2015). Standards 2016: Raising the Bar at Cedarville University.
Festa, G., Cuomo, M. T., Metallo, G., & Festa, A. (2016). The (r) evolution of wine marketing mix: From the 4Ps to the 4Es. Journal of Business Research, 69(5), 1550-1555.
Goi, C. L. (2015). Marketing Mix: A review of’P’. The Journal of Internet Banking and Commerce, 2005.
Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Nelson Education.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Khalili Shavarini, S., Salimian, H., Nazemi, J., & Alborzi, M. (2013). Operations strategy and business strategy alignment model (case of Iranian industries). International Journal of Operations & Production Management, 33(9), 1108-1130.
Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes and supply chains. New York: Pearson.
Lee, S. A., Song, S. H., & Lee, S. M. (2016). Influence of Perceived Service Clues on Experienced Value, Trust, and Loyalty of Franchise Snack Bar: Focused on Busan Area. The Korean Journal of Culinary Research, 22(1), 1-8.
Mariotti, S., & Glackin, C. (2014). Entrepreneurship and small business management. Pearson Higher Ed.
Mendibil, K., Rudberg, M., Baines, T., & Errasti, A. (2013). Operations Strategy and Deployment. Global Production Networks: Operations Design and Management, 61.
Mullins, J. (2012). The new business road test: What entrepreneurs and executives should do before writing a business plan. Pearson UK.
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