Strategies and Implementation Plan for SWOT Analysis

Question: What are the success strategies and Implementation plan for SWOT Analysis? Answer: Success Strategy and Implementation Plan SWOT Analysis For every flower shop, the maintenance of the flowers, to keep the flowers looking beautiful and to keep them fresh for the customers is the most important factor. Therefore, we will also put main focus on these factors, such that many customers can be attracted. SWOT Analysis has been performed below in order to analyze the market position of the Exquisite Skills Floral and also to identify its strengths, weaknesses, opportunities and threats. Strengths The internal capacity of Exquisite Skills Floral will provide it strength in order to exist successfully in the competitive market. The target customers of Exquisite Skills Floral are the businessmen and businesswomen and it has been found that the total numbers of the target customers of this business are huge in numbers, it has been noted that about 77 % people are working. Thus, the increased numbers of target customers will act as strength for our business. We will employ best-trained florists in our business and will also provide exotic flowers to our customers. These will also act as the strengths for our business. We will serve various types of products to our target customers i.e. businessmen and businesswomen like custom floral designs and various selections, unique containers and vases, green and flowering house plants and gourmet chocolates. Exquisite Skills Floral will provide and serve all these unique products and services to our customers that are rarely ser ved and provided by other companies in the competitive market. Thus, this will also be considered as the strength of our business. In addition to this, the location of the business in centre of the Dallas-Fort Worth metropolitan area and its increasing population of 6,812,373 in 2013 will also add strength to our business. Weaknesses Our business does not have much weakness except its size. As our business is in the initial stage, the size of the business is also small and the competition in the market is much high. Therefore, it can be said that to enter into a new market is quite tough for us as there are many other competitors in the similar market. Opportunities The businessmen and businesswomen are the primary targets of our business and our location is in centre of the Dallas-Fort Worth metropolitan area. This indicates a densely populated area as it has been found that the numbers of population in this area for the year 2013 was 6,812,373 and it has been noted to be increasing with the passage of time. Thus in other words, it can be said that the numbers of our target customers are also increasing. This is an opportunity for us as the businessmen and businesswomen are our target customers. We are going to sell custom floral designs and various selections, unique containers and vases, green and flowering house plants and gourmet chocolates to our customers. All these products are not sold or served by other competitors of the business. Thus, this will also act as an opportunity for our business Exquisite Skills Floral. Threats The opportunities might act as threat for our business, as the popularity of our product might compel the other businesses to serve or produce the similar products and lesser cost might take away the target customers of Exquisite Skills Floral to its competitors. The other weaknesses include the maintenance of the flowers, with the climatic change the flowers should be kept fresh and nonetheless the customers cannot be attracted by the business. This incurs a huge cost and thus the high operation cost of the business will act as a threat. In addition to this, there is also a threat of new entrant in the industry. Our Competitive Edge Exquisite Skills Floral will be totally different from the traditional florists. This difference will be made based on the development of the consumer intimacy. The consumer intimacy is built up on the basis of the personalized relationships, which will save time of the male customers and will also reduce their anxiety that is associated with the buying process of the gift. Our business Exquisite Skills Floral will achieve its goals through the following: Firstly, we will use various modern technologies in order to make the floral purchasing experience easy for the consumers. This will make our business enable in identifying and tracking its consumer base. Secondly, the arrangement of a new fresh flower purchasing experience for the target consumers. Thirdly, we will offer additional self-indulging products. This includes - gourmet chocolates and unique vases and containers. Fourthly, we will offer artistic and exquisite arrangements to our customers. Fifthly, the customer database will be build that will help in identifying contact information and also the preferences like - vases, colors, pets, allergies, frequency, anniversary, birthday, children or spouse and many more. Lastly, we will adopt the proactive consumer service policies for the benefit of the business. This we will do by contacting each of the members of the Frequent Flower Gift Program through e-mail or phone call within 48 hours of the scheduled delivery and also by giving call to the commercial clients. This will be performed after every delivery in order to ensure satisfaction of the customers. Our business Exquisite Skills Floral is not like a traditional florist. Therefore, it will not offer the following as a traditional florist. These include: Weddings Floral services especially for weddings are considered as a special area of traditional florist. In order to maintain its focus on the objectives of the Frequent Flower Gift program, Exquisite Skills Floral might select in order to refer the potential clients of wedding to the other competitors of the area. Teleflora wire services or FTD The recreation of the arrangements as defined by other competitors also limits creativity. Funerals The florists provide services for funerals. It is counted as a special area for the traditional florists. In order to remain highlighted on the objectives of the Frequent Flower Gift Program, Exquisite Skills Floral might select in order to refer the potential clients of funerals to the other competitors of the particular region. Balloons and stuffed animals The traditional florists also sell balloons and stuffed animals as they provide services for weddings. Wide Delivery Services Exquisite Skills Floral will cater its services only in the centre of the Dallas-Fort Worth metropolitan area. However, the other competitors of the business will serve throughout the city, workers and residents. Website Plan Exquisite Skills Floral considers the website of the business as a dynamic tool for marketing that helps in sales and also direct e-mail marketing. Thus the aim of the business is to develop a useful website which will give information regarding arrangements, new product lines and plans for the business. This website will also help in communicating the news of company in order to develop and maintain good public relations with the people of online community. Marketing Strategy The businessmen and businesswomen who generally work in the centre of the Dallas-Fort Worth metropolitan area will trust on Exquisite Skills Floral and thus it will emphasize the services of the business in order to keep love and romance alive. Tactics We will make people giving flowers to their loved ones as it is an effortless and automatic process. We will make the process of purchasing flower easy and it will provide an easy and fun experience. We will shift the purchasing responsibility of the flowers from the women to men. We will make the flowers a habit to the people by encouraging them to take the flowers at home on a regular interval of time that is routinely and not for only some special purposes. Programs The main programs that will be organized by the business Exquisite Skills Floral in order to earn more customers include We will maintain good public relations. We will arrange for advertisement as by advertising through various media, the business can prosper. The business will arrange for co-marketing efforts We will directly mail or send postcards to the customers in order to keep a good relation with them. We will e-mail our targeted and potential customers on a routine basis in order to keep a good and close contact. We will use proper marketing materials for brand recognizing. We will develop our own website and will make it attractive in order to attract more new customers and also to retain the existing customers. Overall Strategy It is a common thought that there are not many florists across the country rather there are many florists who are of similar type. It has been found that a florist who has a well defined niche market for business can easily flourish. Therefore, the marketing strategy of our business Exquisite Skills Floral includes development of independent and specialized niche business which centers on the programs of the Frequent Flower Gift and characterizes the quality products, outstanding personalized consumer service and custom designs. Marketing Objectives Exquisite Skills Floral requires establishment of a reputation as automatic and simple way in order to purchase foster romance and flowers with the loved ones, particularly with the affluent men who are busy in their work life. A specific and measurable objective involves initiation of the marketing efforts. It will have a minimum of 25 male customers in the program of the Frequent Flower Gift at the time of the opening of the stores. Exquisite Skills Floral will develop itself as a creative source for the office tenants and the retail in the centre of the Dallas-Fort Worth metropolitan area which requires weekly arrangements of flower. The specific and measurable goals of our business are to have six offices that will be signed up for deliveries on a weekly basis. It is an expectation that we will get these orders of weekly delivery by the time of the opening of the store. Exquisite Skills Floral has to develop brand recognition in order to attract the customers. Positioning Exquisite Skills Floral will offer an upscale program of Frequent Flower Gift having a target to meet the demands of the featuring custom, affluent businessmen and businesswomen, personalized service and high-quality floral arrangements. In addition to this, we have planned to develop a unique shopping experience. For this we have decided to design a floral gallery that will be located at the centre of the Dallas-Fort Worth metropolitan area. Marketing Mix Exquisite Skills Floral has planned to serve the businessmen and businesswomen who work in the centre of the Dallas-Fort Worth metropolitan area. Therefore, the marketing efforts of the business will mainly highlight on the targeting customers and as a promotional program of giveaway and a by-product of deliveries, we have planned to secure the commercial accounts. The overall approach of the marketing of this business is to create brand awareness by public relations, targeted advertising and a website. This helps in generating leads by the efforts of co-marketing with e-mail or traditional direct mail, events and select venues. Reasons for Purchasing from Exquisite Skills Floral by businesspersons To reduce forgetting regarding anniversaries, birthdays and any other special dates. To promote romance with floral gifts for spouse. To spend more time with the loved ones and also to reduce the timing for shopping for their loved ones. The process is convenient and also easy. The service is personalized. We provide unique floral arrangements and quality flowers. The delivery is free of cost. The gourmet chocolate is available in addition to the flowers. Sales Strategy We will implement both the direct and indirect sales strategies in order to run our business Exquisite Skills Floral successfully and efficiently. Direct Sales It has been noted that in present days more than 90 % of the people of the country state word-of-mouth as best source of information and ideas. In the country, the word-of-mouth is considered as the most important method of communication that advertises about the services and the products of the company and also adds more value to the business. Exquisite Skills Floral plans to perform direct sales by offering a unique and high level of personalized service to the target customers to build loyalty and finally the word-of-mouth will work as referrals to their colleagues. Exquisite Skills Floral will gather and maintain the database of all its customers, their name, e-mail addresses, residential addresses and preferences. This will help in e-mailing or direct mailing and also to develop customer loyalty among them. Exquisite Skills Floral has also intended to offer 24 * 7 services to all its customers in order to maintain customer loyalty and retention. These services will include retur n or exchange policies and also free delivery of the ordered flowers. Indirect Sales Exquisite Skills Floral can obtain the opportunity of establishing a referral service and also to get partnered with several essential florists who can serve these services. Thus, we will gather a flat percentage of every referral sale along with amount payable at end of every month. Key Implementation Milestones The scheduled milestones that will be implemented with time are as follows: Exquisite Skills Floral Milestones Task Description Start Date Planned Finish Date Date Completed Assigned To Deliverable Budget Cost to Implement Value to Company Priority Days to Finish Bank loan application 12/25/16 12/31/25 1/24/17 Ralph County, city business license $500 $500 $500 1.000 30 Apply for licenses 7/9/16 7/14/16 8/8/16 Frank Bank loan $200 $300 $150,000 3.000 30 Contract with builder for leasehold buildout 8/12/16 9/31/2016 12/10/16 Cindy Lease $500 $1,000 $63,000 2.000 120 Negotiate lease 10/12/16 10/22/16 11/11/16 Chris Renovated leasehold $25,000 $30,000 $30,000 4.000 30 Purchase computers, software 10/12/16 10/30/16 11/1/16 Julie Functioning network $20,000 $30,000 $30,000 5.000 20 Task Budgetary Summary Tasks Total Percent on Budget Percent Value to Cost Budget $46,200.00 Cost to Implement $61,800.00 133.77% Value to Company $273,500.00 442.56% Task Completion Status Total assigned tasks 5 Total completed tasks 5 Percent completed 100.00% Company Resources Our People The forecast regarding the human resource specifies the recruitment of the candidates who are already related with the business purposes. The particular business has to keep it in mind that according to the expertise and experience of the people, candidates should be employed. The required workforce for the business is as follows: Types of Staffs Requirement in Year 1 Requirement in Year 2 Store in-charge 4 6 Accountant 1 2 Sales Persons 5 8 Payroll Summary Year 1 Year 2 Year 3 Direct Cost of Labor $219,525 $427,955 $636,385 Payroll Operating Expense $947,525 $947,525 $947,525 Total Payroll Expense $1,167,050 $1,375,480 $1,583,910 Business Structure Exquisite Skills Floral will be organized in three primary functional areas design, sales and administrative. We have already assigned the jobs as per the experience and designation. Nevertheless, we have decided to help each other in different departments as per necessity. The owner spontaneously checks the development plans of this business and cooperates in development of products and services. She also suggests for the betterment of the business. It is expected to have a continuous growth in salary of the employees as this plan will become successful and will also be profitable. Start-up Capital The start-up funds required for this floral business is $ 140,000. The owner of the business i.e. Ms. Anderson will invest $ 50,000 from her savings and remaining $ 90,000 will be invested by her close friend as well as sports bar owner Marcus Holt. The lease amount for the shop per month is estimated to be $2500 and there is an option of expansion of the lease amount after every 6 months afterward. Financial Statements Statement of Operations Exquisite Skills Floral Statement of Operations 2016 2017 2018 Revenue Sales 4,000,000 4,000,000 4,000,000 Cost of Goods Sold Direct Cost Direct cost of materials 100,000 100,000 100,000 Direct cost of labor 100,000 100,000 100,000 Freight 100,000 100,000 100,000 Inventory Adjustments 100,000 100,000 100,000 Purchase Returns And Allowances 100,000 100,000 100,000 Cost of Sales $500,000 $500,000 $500,000 Gross Margin $3,500,000 $3,500,000 $3,500,000 Operating Expenses Advertising Expense 50,000 50,000 50,000 Auto Expense 50,000 50,000 50,000 Bad Debt Expense 50,000 50,000 50,000 Bank Charges 50,000 50,000 50,000 Commission Expense 50,000 50,000 50,000 Insurance General 50,000 50,000 50,000 Interest Expense 50,000 50,000 50,000 License Expense 50,000 50,000 50,000 Interest Payments 4,644 7,044 10,243 Maintenance Expense Meals And Entertainment 50,000 50,000 50,000 Office Expense 50,000 50,000 50,000 Payroll Expense $1,167,050 1,375,480 1,583,910 Postage 50,000 50,000 50,000 Printing 50,000 50,000 50,000 Professional Fees 50,000 50,000 50,000 Rent 50,000 50,000 50,000 Repairs Expense 50,000 50,000 50,000 Shipping Expense 50,000 50,000 50,000 Supplies Expense 50,000 50,000 50,000 Taxes Federal Income Tax 5,000 5,000 5,000 State Income Tax 5,000 5,000 5,000 Sales Tax 5,000 5,000 5,000 Other Tax 5,000 5,000 5,000 Utilities Expense 50,000 50,000 50,000 Depreciation and Amortization Expense 6,764 6,764 6,764 Other 50,000 50,000 50,000 Other 50,000 50,000 50,000 Total Operating Expenses 2,198,458 2,409,288 2,620,918 Income From Operations $1,301,542 $1,090,712 $879,082 Non Operating Income Item 1 100,000 100,000 100,000 Item 2 100,000 100,000 100,000 Item 3 100,000 100,000 100,000 Total Non-Operation Income $300,000 $300,000 $300,000 Net Income (Loss) $1,601,542 $1,390,712 $1,179,082 EBITDA $1,378,306 $1,167,476 $955,846 Balance Sheet Exquisite Skills Floral Balance Sheet Start Up 2016 2017 2018 Assets Current assets: Cash 94,000 2,899,356 5,677,312 8,432,068 Accounts Receivable Inventories Pre-paid Expenses Other short-term investments Other 1 Other 2 Other 3 Total current assets $94,000 $2,899,356 $5,677,312 $8,432,068 Other Non-Current Assets Property, Plant and Equipment 122,000 122,000 122,000 122,000 Other 1 Other 2 Other 3 Less Accumulated Depreciation 6,764 13,528 20,292 Total other assets $122,000 $115,236 $108,472 $101,708 Total assets $216,000 $3,014,591 $5,785,783 $8,533,776 Liabilities and owner's equity Current liabilities: Accounts payable Other 1 Other 2 Other 3 Total current liabilities $0 $0 $0 $0 Non current liabilities: Long term debt 120,000 200,000 255,000 290,000 Other 1 Other 2 Other 3 Total non-current liabilities $120,000 $200,000 $255,000 $290,000 Total Liabilities $120,000 $200,000 $255,000 $290,000 Shareholder's equity: Common stock, no par value Paid In Capital 120,000 120,000 120,000 120,000 Retained earnings (24,000) 2,694,591 5,410,783 8,123,776 Other 1 Other 2 Other 3 Total owner's equity $96,000 $2,814,591 $5,530,783 $8,243,776 Total liabilities and owner's equity $216,000 $3,014,591 $5,785,783 $8,533,776 Balanced Balanced Balanced Balanced - - - - Statement of Cash Flows Exquisite Skills Floral Statement of Cash Flows 2016 2017 2018 Beginning Cash Balance $94,000 $2,899,356 $5,677,312 Cash Received Cash from Operations 4,000,000 4,000,000 4,000,000 Cash from Non-operations 300,000 300,000 300,000 New Current Borrowing New Long-term Liabilities 100,000 100,000 100,000 Sale of Other Current Assets Sale of Long-term Assets Other Total cash received 4,400,000 4,400,000 4,400,000 Breakeven Analysis Exquisite Skills Floral Breakeven Analysis Units Sold Net Revenue Total Operating Expense Variable Cost Total Cost Total Profit 0 $0 $1,081,609 $0 $1,081,609 -$1,081,609 8,000 $800,000 $1,081,609 $50,000 $1,131,609 -$331,609 16,000 $1,600,000 $1,081,609 $100,000 $1,181,609 $418,391 24,000 $2,400,000 $1,081,609 $150,000 $1,231,609 $1,168,391 32,000 $3,200,000 $1,081,609 $200,000 $1,281,609 $1,918,391 40,000 $4,000,000 $1,081,609 $250,000 $1,331,609 $2,668,391 48,000 $4,800,000 $1,081,609 $300,000 $1,381,609 $3,418,391 56,000 $5,600,000 $1,081,609 $350,000 $1,431,609 $4,168,391 64,000 $6,400,000 $1,081,609 $400,000 $1,481,609 $4,918,391 72,000 $7,200,000 $1,081,609 $450,000 $1,531,609 $5,668,391 80,000 $8,000,000 $1,081,609 $500,000 $1,581,609 $6,418,391 Image 4 Key Ratios Exquisite Skills Floral Financial Ratios and other Indicators 2016 2017 2018 Ratios Acid Test 0 0 0 Current Debt to Total Assets 6.90% 4.49% 3.44% Current Liabilities to Total Liabilities 0.00% 0.00% 0.00% Debt to Equity 7.11% 4.61% 3.52% Net Worth $2,814,591 $5,530,783 $8,243,776 Return on Equity 85.93% 43.69% 29.27% Sales to Net Worth 142.12% 72.32% 48.52% Total Assets to Sales 75.36% 144.64% 213.34% Working Capital $2,899,356 $5,677,312 $8,432,068 Balance Sheet Cash $2,899,356 $5,677,312 $8,432,068 Total Current Assets $2,899,356 $5,677,312 $8,432,068 Other Non-current assets $115,236 $108,472 $101,708 Total Assets $3,014,591 $5,785,783 $8,533,776 Current Liabilities $0 $0 $0 Accounts Payable $0 $0 $0 Non-current Liabilities $200,000 $255,000 $290,000 Total Liabilities $200,000 $255,000 $290,000 Statement of Operations Sales $4,000,000 $4,000,000 $4,000,000 Cost of Sales $500,000 $500,000 $500,000 Gross Margin $3,500,000 $3,500,000 $3,500,000 Operating Expense $1,081,409 $1,083,808 $1,087,007 Advertising Expenses $50,000 $50,000 $50,000 Total Payroll Expense $150,000 $150,000 $150,000 Income From Operations $2,418,591 $2,416,192 $2,412,993 Net Income (loss) $2,718,591 $2,716,192 $2,712,993 EBITDA $2,495,356 $2,492,956 $2,489,757 Important Assumptions Exquisite Skills Floral Assumptions Market Share Assumptions and Sources What percent of market share will you convert to business in year 1, 2, 3 70% What is a conservative, moderate and aggressive estimate of the market share you will convert in year 1, 2, 3 40%, 55%, 70% What is the logical, statistical basis for the estimate of market share conversion revenues earned from the business Sales Assumptions and Sources What is the percent growth rate for yr 1,2,3 etc 10%, 20%, 30% How many customer sales per month 12,000 How many customers are repeat customers 55% Average annual sales volume per customer 60 What is the average revenue per customer per sale $65 What percent of your sales will be for 'house accounts' belonging to large regular customers. What kind of terms will the have 30% What sales, use or excise tax rate applies to your sales 10 Other Property Plant and Equipment Equipment Assumptions and Sources What is included in the 'standard' equipment for each class of employee: Desk, chair, side chair, file cabinet, table, other furniture 1000 Automobile, auto insurance, gas card, mileage allowance 10000 What equipment will you purchase Computer, laptop, software, desk phone, cell phone, email account, printer, fax, scanner 20000 Tools, devices, test equipment, other 12000 Cash register, barcode scanners, merchant account input devices 15000 How much equipment is necessary in relation to increasing sales $75,000 Other Inventory Assumptions and Sources What is your estimated inventory turn rate 10% How many different items will be stocked 10 What is the estimated stock replenishment time 24 hour Capital Equipment 22000 How much capital equipment is necessary to produce 3 years sales volume $65,000 How many years will you use to depreciate this equipment 5 What is the installation and facilities preparation cost for the equipment 6 Other Facilities Assumptions and Sources How many square feet per dollar volume of sales is necessary for the business 100 How many square feet for 'operations, production' 500 How many square feet for ' sales, customer interaction' 500 Will the facilities be leased or purchased leased Who will guarantee the lease owner Other Employees and staff Assumptions and Sources How many salespeople per $$unit of sales 5 How many support people per number of salespeople 4 What is the annual salary for each employee class 15000 Personnel agency fees 12000 Other Expenses Assumptions and Sources Legal fees 500 Accounting fees 8000 Business formation fees and expenses $15,000 Audit Fees when using investor funds 9500 Brokerage Fee to raise capital 5000 Licenses $1,000 Travel expense $2,560 Required professional memberships. $500 Which expenses will the founders have to personally guarantee loan and lease amount Other Cash Flow Assumptions and Sources Interest payment on investment capital 12% Will there be sufficient cash on hand until the cash flow is positive yes Other Event Industry Assumptions and Sources How many customer events per year, month, week 12000 p.m. How many customers per event 6000 How much will these events increase your 'normal' estimate for sales 45%