Business Plan

Design and Development Plans

Development Status and Tasks

The product development is currently still an idea. With research, the production process will soon initiate. The supply and product prototype are explained below with respect to the already available information.

Supply Acquisition; The company will begin by obtaining contracts with a variety of suppliers for its raw materials. Since the company targets to produce small amounts of the product in its early years, it will obtain all its raw materials from within the country, a strategy that is recommended by Kim (2005) and Carson, Bolz and Young (1972). All supplies will be delivered to the company through a courier service. Those products that are too expensive within the country will be outsourced from international suppliers. The company could also obtain some components from local manufacturers who are able to outsource their raw materials in bulk. This will lower the cost of production as well as lower the cost of labor.

Product Prototype; The company will do all its manufacturing within its facilities. After obtaining the raw materials, the company intends to do all its manufacturing within the company. It intends to acquire an array of machines that will help in mounding accessories for the company’s products to lower the cost of production (Lefteri, 2007). As mentioned earlier, the company may outsource some complete components. There are three product groups. The rechargeable product will be manufactured at about $ 12 and will be sold at $ 30. The single use non-rechargeable product will be produced at $ 2 and sold at $ 5. Finally, the NightPack Product will be manufactured at a cost of $ 25 and be resold at about $ 70. This will provide a sustainable profit for the company.

Product Development and New Product

With the present days’ ever evolving technology, every product requires moving hand in hand with the inventions. More electronic devices are being introduced to the market day after day, which are progressively consuming more power from their batteries. Additionally, the electronic devices have batteries that require more charging voltages. Thus, our portable charges will seek to introduce stronger chargers consistently. This endeavor will cost the company at least $1 million every year. The company will endeavor to introduce new products as part of maintaining the competitive advantage. Products will be at times priced a little higher during the introduction and which can charge an electronic device for a much longer period. Additionally all new products will have 12 months warranty to assure our clients of their quality nature. The product will be reviewed on a yearly basis to make sure that it is improved to a better and competitive quality. The reason behind improving the product on a yearly basis is so as to enable gathering information regarding the devices generated that year and be able predict what kind of devices to be developed in future. To continually improve our product the research and development department’s funding will rise on an annual basis to guarantee consistent innovation. Additionally since our competitors also sell the same product as we do it will be necessary to at regularly basis introduce new products. Product improvement will entail offering the product in varying colors and packaging. The different packaging will entice the customers towards purchasing the product and at all times look forward to a new packaging.  Researchers have established that customers usually get used and bored by the unchanging product features.  That forms the reasoning behind changing the features of the product.

Difficulties and Risks

For every product being introduced to the market, there will be numerous challenges and risks, which the company has to deal with. To start with, the actuality that we are not the first company to introduce a portable charger presents a challenge in introducing our product. The stiff competition calls for extraordinary measures to be undertaken. For every new product, there exist challenges of introducing the product in an already existing market, that is, risks for failure. Additionally in order to produce a charger that will be able to charge three to four electronic devices simultaneously  to a 100 percent battery charge and still maintain its small portable size model will be challenge to the company. Establishing vending machines on a very wide area will be a very huge and costly venture for the company since it is the main strategy. The vending machines present an additional challenge of breaking down requiring the technicians to move very distant areas for repairs. The company additionally expects to face the challenge of competing with the huge companies that already dominate the market and have more resources to hinder entry of another company. Therefore, the pricing challenge will be expected. In general the company though venturing in an ever dynamic industry faces the risk of failing to progress. However, through the distinct brand the company will introduce the challenges and risks will be significantly reduced.  The marketing strategies are expected to be top notch guaranteeing the company and its clients a future.

Costs

The company’s most urgent needs are research, raw materials, and labor. Employees will be paid between $ 30,000- 50,000 per year. Research must be paid for. The company will diverge over $100,000 to cover its research each year. The cost of raw materials will depend on the company’s productivity and the cost of raw materials (Kim, 2005). The cost of supplies is another cost that the company will need to settle. As mentioned earlier, the company intends to do its entire production unless there are better offers of completed components from suppliers.

The company is also still unregistered. It will be registered as a LLC and this will require funding. Other costs that the company intends to incur in the short-run include advertising costs and costs incurred in transportation. The company intends to invest a total of $ 100,000 on advertising. Costs on transportation will depend on the production and activities of the business. All these costs will be covered by the company through its accounting offices.  

Proprietary Issues

The company is currently a partnership. Each of its owners is liable for any amount of money obtain in debt by the company. It is to be registered as a limited liability company. This will help to establish it as an entity in itself and not require each of the members to be accountable for the company’s debts (Khan, 2006). The company also pays the taxes independently rather than having each of the company’s owners filing their own tax returns. Its owners are, however, still liable to paying their income taxes for the money they draw from the company in the form of bonuses and salaries. The advantage of a LLC is that company owners are protected from the debts that may be incurred by the company. This enables it to be favored for investing by other entrepreneurs. The contribution of owners will determine their control of the company. No owner will be allowed to own over 25 % of the company’s shares.

Manufacturing and Operations Plan

Operating Cycle

The company’s operation cycles will include the acquisition of supplies, production and distribution. The company recognizes the need for a short operating cycle. The company will sign contracts with the suppliers to have all supplies paid for on delivery. This will significantly lower the operation cycle. The company will keep in storage enough supplies to run one week’s production. This will both take care of late deliveries as well as assist in lowering the operating cycle. The company will also sign partnerships with distributors so as to ensure that payments are made prior to making the order. This will help to make all payments prompt and avoid putting too much money on the supply chain.

Geographical Location

The company will be located in Signal Hill California. This will serve to make the cost of acquiring supplies cheaper since most of the company’s suppliers are located in California. The company will have several retail locations in the company. These retail locations will serve both as retail centers and customer service centers.

California is also suitable for the industry due to the friendly production regulations. The regulations in the State have numerous benefits for small companies and this will serve to get the company on its feet. The company will however have to handle the high costs of labor in California. High labor costs will become a major factor in the cost of the company’s products. Employees in California are also unionized and this will require the company to meet high costs of labor.

California is a major source of copper and gold. The company will make use of copper as well as small amounts of gold. The proximity to the mines will help to make the company obtain such raw materials at friendly costs.

Facilities and Improvements

The company will acquire its first manufacturing factory within a period of six months from the date of adoption of the business plan. The manufacturing plant will preferably be placed on a 1 acre piece of land. This will allow for expansion at least in the short-run. While the land has not been identified, a land with undeveloped property in its neighborhood will be preferred so that the company can use the land in the neighborhood in future to expand. Undeveloped land is also likely to be cheaper.

The land for the location will be acquired rather than leased. This will help to avoid issues of ownership along with property appreciation. Equipment will also be acquired. However, the acquired equipment will be used rather than new to lower the cost of startup.

In the next three years, the company will require to have started full production. The company should be able to acquire equipment that will be able to produce up to 2 million pieces of the product per day. To do this, the company will require to have acquired equipment worth between $ 12-15 million. The company’s current acquisition requirements in this regard are $ 1.5 million. 

The company is considering outsourcing the production of certain companies from Alaska Battery Manufacturing Company. This company has been on the frontline of producing products that meet the required standards. The company specializes in all energy needs including batteries, generators and electricity cables. The company will also serve as the primary supplier of copper for the company.

The company intends to make an impact in the local population. First, the company will offer employment to the population in the form of permanent and temporary tenure. Secondly, the company will contribute to environment conservation efforts by participating in environment drives in the state. This will help to lower the impact of the industrial activity on the area.

Strategy and Plans

The company’s make-or-buy policy intends to make the company maximum policy while working within allowable standards of quality and environmental conservation. The company will only manufacture in-house those companies whose in-hose production will substantially lower the cost of production while taking in consideration all aspects of the market. The company will, for example, take into consideration the cost of available labor, the number of employees who are employed on a permanent basis, the equipment of the company, the quality of products and the competition.

The company will be founded on environment sustainability. All production process will be environmentally sound and the disposable products will be easily decomposable up to the reasonable limits. Since the company cannot ensure that its production process is always put up buyback programs for its products. These products will be bought back at between 10 % – 20 % of the market and re-used in production. This will assist in both reducing production cost and conserving the environment.

Regulatory and Legal Issues

The company will require acquiring various environment approvals before initiating production. The company intends to seek the Environmental Compliance Approval since it is a one package-covers-all for environment. The standards that must be met include emissions, discharges, air and noise pollution along with waste and sewage management.

The company will also require a variety of licenses before it starts operating. It will for example be required to obtain a business tax certificate since it will be operating within the city limits. Other permits include fire prevention inspection certificate, land use permit or the zoning permit, fictitious business name, waste management program, discrimination law, industrial activities storm water general permit among others (Cal gold, 2014).
References

Carson, G., Bolz, H., & Young, H. (1972). Production handbook. New York: Ronald Press Co.

Khan, T. (2006). Company Dividends and Ownership Structure: Evidence from UK Panel Data*. The Economic Journal, 116(510), 172–189.

Kim, B. (2005). Supply chain management. Singapore: John Wiley & Sons (Asia).

Lefteri, C. (2007). Making it. London: Laurence King Pub.

Cal gold,. (2014). CalGOLD Search Result. Retrieved 20 October 2014, from http://www.calgold.ca.gov/Results.aspx?location=63&businessTypes=63&greenBusiness=False