The Main Vision of Peter's Farmer Shop - Term Paper Example

? Peter's Farmer Shop General Mission The main vision of Peter is to sell his rights of River ford organicfarm franchise and start up his own business concentrating on farmers markets and food festivals all over Yorkshire by approaching the markets using brand names like River ford organic farm and other different channels. Objectives Peter’s main objective is to double his sales. This can be achieved by doubling his customers from 200 to 400.The more the customers the more the returns in form of profit. He wants to diversify his business into farmers markets and later on into a farm shop. Geography The location of the business is at Yorkshire, West Yorkshire, to be exact. He wants to exploit local culture and appropriate tourist base (Bangs, 2002, 102). Marketing Mix Product Peter at first wants to sell vegetables boxes to his potential customers then he has planned to develop new products that he can use to penetrate farmers markets and especially food festivals where the level of sales might have an incline. These products might be in form of food and drinks. Pricing Having the low price is unprofitable since the client does not care about pricing as a businessman thinks; therefore Peter should have average prices and compete on quality products and services for example transportation services e.t.c. He also should be able to prepare credit policies for potential customers. Promotion The question that Peter is going to ask is how will the word get out to the customers? Peter can use two types of promotion which are personal selling and advertising. Advertising in the sense that when he takes his products to the farmers market he can put up a stand and use banners to describe and differentiate the types of products he is offering. For example if he is selling fruits and vegetables, he might have pictorial messages that display these goods so that even customers are far from his stand, they can be able to tell the kinds of products that are sold by him. Personal selling comes in handy when customers want to know how these products can be used apart from the mere fact of edibility. He may also use other forms of promotion for example; ‘trade concert’, ‘catalogues’, ‘seller incentives’, ‘advertisement’, ‘network of professionals or friends’ depending on his promotional budget. Place: We know that Peter wants a location that is local to him which is within West Yorkshire. So before he chooses a location for his business he needs to think about what he wants and needs in a location and its effect on clients. He should ask himself the following questions prior to the previous statement. -Is his location important to his customers? If yes, why? Peter should choose a convenient location in terms of distance to the place of business; therefore he should research on what the customers’ needs and wants are, compare it to his business product wise and choose the best location. Ease of accessibility to consumers. -Is it consistent with his image? Image is everything. It distinguishes one business from another. Peter should choose a location that portrays his image and the image of his soon to be business. If the image and the purpose of the business are different, Peter might end up losing important consumers. -Where is the competition located? Near or distant? The best location of competitors for him should be distant. This is to curb poaching of consumers by the competition which is River ford organic farm. The idea here is to retain customers as well as getting new ones. Market Place Customers Peter should be able to identify his target customers, their needs and wants and their geographical locations. He must analyze the end consumer so as to be able to formulate different customer groups which will guide him when he is constructing a demographic profile of them which includes the following:- Age Peter should identify different age groups and what kind of products they prefer. Gender Each gender prefers specific products. It is the work of Peter to distinguish these products and be able to satisfy these customers individually to maximum satisfaction. Location The location of customers is important in that customers who are near Peter’s place of business are the ones who are likely to have their needs and wants fully satisfied by the businessman compared to those who are far from the place of business. Income The level of income for each customer varies (Bangs, 2002, 102). High income earners have a high probability of constant purchasing depending on their level of need and how they want them satisfied compared to customers who have lo w income levels. Education The level of education is also a major factor. Illiterate customers tend to purchase products because of referrals from others unlike literate customers who know what they want exactly thus creating a higher purchasing power thus their needs are always fully satisfied. Social class Social class also is another major factor in that high class customers tend to buy products in a minimal basis compared to low class who are constantly purchasing. This is widely affected by levels of income whereby we find high class customers tend to buy for long term purposes as compared to low class because of the difference in income levels. Competition In this case the major competition that Peter has to be aware of is the River ford organic farm franchisee that is going to take over his job after he sells his rights or reassign them to the franchisor. His work is to go to farm markets and food festivals and show case products of River ford organic farm and try to get customers to purchase these products. In the future they will be dealing in almost the same products and services. Another major indirect competitor although not stated is the marketing boards that are located in Peter’s town. It might prove to be a major competitor, but Peter should identify these two giants and do anything legally possible to make his products the top products in the market. This involves producing quality products at affordable prices to the consumer. He has to be able to retain customers and acquire new ones. To do this he has to research on his competitors’ products know their weakness and their strengths to have an apparent thought on how the competition operates in terms of their organisation to their production levels. Peter can achieve this through primary sources and secondary sources like newspapers and magazines. To have the upper hand, he can use eco friendly or recyclable packaging of products; he can use good pricing policies depending on the level of quality of products. Do not overcharge or undercharge because it might lead to customer evasion to the competitor. Another way of curbing competition is through offering of quality customer service. This shows the consumer that you value them as your client and gives them a sense of security in terms of purchasing products and issuance of top notch services. The more quality customer service Peter applies to his potential customers the more he retains and acquires new customers (Bangs, 2002, 52). Also another way Peter can curb competition is through quality advertising. This applies mostly where farmers markets are involved. Previously we talked about Peter’s stand in the farmers market. The method of advertising that will be appropriate needs to attract clients or capture his or her eyes towards Peter’s booth. Good advertisement equals good sales, good publicity in terms of good image for Peter’s business. Suppliers This involves the identification of potential suppliers of products that Peter as a business man can use. He should get their names and addresses for security purposes of the business in terms of capital issuance and image of the business. The wrong suppliers can break a business which may lead to liquidation or worse case scenarios bankruptcy or dissolution. He should be able to choose suppliers according to their history and reliability in the industry, the type and amount of inventory that is going to be issued to him by the suppliers...the higher the better, the credit and delivery policies that the suppliers are able to give to Peter. Finally it is wise for Peter to get back up suppliers just in case the relationship of the original suppliers and Peter did not work out in the positive direction. Operational Plan Production This involves the place and the skill that is used when production of products is underway. Peter should be able to decipher the best techniques that can be used for production. These techniques include farming, processing farm inputs and finally packaging finished products. Peter should identify and do away with processes in the production cycle that do not add value. Quality is another area that Peter should be strongly up holding. This is because low quality in products will lead to low sales and the return in investment will be low. Customer service also is a major hindrance to most businesses in this industry, so Peter should ensure that he and his customers have a well based communication system. This means listening to his customers needs and wants and providing them with specified goods and it does not stop there, in that him being the professional, he should be able to offer good advice to customers with regards to products because some customers might come to his place of business to make a purchase but are still undecided (Bangs, 2002, 75). His job involves assisting clients to make decision when purchasing. Inventory control is another area that Peter should be concerned with. Here the use of resources should be in the form that there is no wastage of resources and minimal costs that are incurred should be able to produce maximum output. Product development involves the processes that transform an input or raw material to a finished usable product with less incurred expenses. Inventory Peter should ask himself what kind of inventory he wants to keep. It may be raw materials, finished products, and supplies. It depends on the target customers. In this case he should choose finished products because his target market is not industrial consumers but commercial consumers. He also should be able to determine what is the average value in stock for example the investment he shall part with to acquire this inventory so that he has the ability to calculate the rate of return compared to other industry averages like River ford organic farm and other businesses in the farmers market. Sometimes consumer’s wants and needs for products are in such a way that they are only acquired seasonally. In such a scenario Peter can use storage facilities to store goods for future purchasing. A good example is where fruits are involved. Some fruits are seasonal and when customer’s needs for these products reaches its pick, they will want to purchase them but cannot due to issue of seasonality. Peter should create storage facilities. In doing so he is able to cater for the needs of the potential consumer and may end up retaining a customer in the process. Personnel Here Peter should be able to assess the level finished work, and find out the employees that can work for him. For example, if it is one employee; he needs to record the type of labour to be done by the employee. It might be skilled unskilled or professional. Before doing so Peter should interview people so as to get the right man for the right job whose production is of quality in nature. Peter should discuss the methods of payment structure of this employee according to the work done. He should issue tasks according to training and skills that the employee has. Financial plan This is a helps us arrive at an estimate of Peters company in the future. It outlines when Peter will be able to break-even and further than that it states the cost of expenses and the profit projections that he will incur in the future. It includes the ‘Profit’ and ‘loss’ statement, and the ‘cash flow’ statement. Profit and loss statement This is where all costs incurred are matched against the amount of goods sold and the difference is the profit or loss. One year profit and loss projections: Revenue (Sales) Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec -13 Total Revenue (Sales)   Cost of Sales Total Cost of Sales   Gross Profit   Expenses Salary expenses Payroll expenses Outside services Supplies (office and operating) Repairs and maintenance Advertising Car, delivery and travel Accounting and legal Rent & Related Costs Telephone Utilities Insurance Taxes (real estate, etc.) Interest Depreciation Other expenses (specify) Other expenses (specify) Other expenses (specify) Misc. (unspecified) Total Expenses   Net Profit Before Taxes Income Taxes Net Operating Income Cash flow Projection This is detailed plan of how much Peter needs to start his business and how it will be projected for one year so he can understand clearly how much he will need every month after starting so as to pay for his operating expenses. Cash flow projections for one year: Pre-Startup Jan 13 Feb 13 Mar-13 April 13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Total (end of year) 1.   Cash on Hand (beginning of month)   0 0 0 0 0 0 0 0 0 0 0 0 0                               2.   INCOME                               a) Cash Sales                               b) Other income (credit accounts)                               b) Loan / other cash injections                             3.   TOTAL CASH RECEIPTS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4.   Total Cash Available (before cash out) 0 0 0 0 0 0 0 0 0 0 0 0 0 0                               5.   CASH PAID OUT                               a) Purchases (goods for sale)                                 Purchases (specify)                                 Purchases (specify)                               b) Wages (exact withdrawal)                               d) Holiday pay                               e) Tax deduction (on wages)                               f) Payroll tax                               g) External services                               h) Supplies (office & oper.)                               i) Repairs & maintenance                               j) Marketing, advertising                               k) Car, delivery & travel                               l) Accounting & legal                               m) Rent                               n) Telephone, postal expenses                               o) Utilities                               p) Insurance                               q) Taxes (real estate, etc.)                               r) Interest                               s) VAT                               t) Other expenses (specify)                                 Other (specify)                                 Other (specify)                               u) Miscellaneous                             SUBTOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0 0   v) Loan down payment                             w) Capital purchase (specify)                               x) Other startup costs                             y) Reserve and/or Escrow                               z) Owners' Withdrawal                             6. TOTAL CASH PAID OUT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7.   Cash Position (end of month) 0 0 0 0 0 0 0 0 0 0 0 0 0 0     ESSENTIAL OPERATING DATA (non cash flow information)                         Sales Volume                             Accounts Receivable                                 Bad Debt (end of month)                                 Inventory on hand (eom)                                 Accounts Payable (eom)                             Depreciation                             Bibliography Bangs, D. H., 2002. The Business Planning Guide: Creating a Winning Plan for Success. Chicago, IL: Kaplan Pub. Read More