Monday, October 14, 2019
Toy Business Plan Essay Example for Free
Toy Business Plan Essay 1.     executive summary This project proposal is being submitted in fair view of globalised businesses and the success it has achieved. Internet technology is enabling to the growth of SMEs apart from multinational businesses. There is greater scope for new opportunities with optimized skill and knowledge invested as the basic requisite to begin any venture. Times always change and so also generation of entrenpreneurs. There are many advancements in the present technology times, the present generation of people are much faster, quickly grasp and in possess potential abilities at a young age to start off businesses on ownership. On a single platform there is a rapid growth of business with the skills and expertise knowledge in a particular field. There are many developments, changes happening around the world and essentially among all financial independence is the most important in order to live well. With this view, after coming to an understanding, that people who possess excellent business skills and have adequate knowledge to run a business, this business plan of toy currency has been prepared with a motive to serve customers and to provide employment to other people as an income source. Toddlers are the precious customers who are going to making this business much bigger. Toddlers are most individualistic in perception, who do not permit others to involve in play time. Toy currency is being extended to children who are one year old or above who can learn and understand about currency coins, denominations and how it is counted and used. Although the idea of money is a big word for children who are one year old, pronunciation of dollar currency, learning about denominations, counting currency are some of the basics that are being promoted to children. Objective 1 Objective Time frame  ·Ã‚        Dollar currency An excellent product.  ·Ã‚        Educational toy for children Business that can tap toy market.  ·Ã‚        Age group 1year and above Returns in a span of 6-12 months Objective 2 Objective Time frame  ·Ã‚        To entertain and educate children.  ·Ã‚        To market innovative and useful toy products 6-12 months  ·Ã‚        To be a leader in toy industry 3-5 yrs. cash flow graphic 2.     Introduction 2.1.  Purpose The purpose of this business plan is to start a dollar currency game for toddlers as a promotion of education. The proposed education game is non-hazardous and extremely attractive for toddlers as a tool for pre-school learning at home. This business plan requires minimum investment and minimum number of workers whereas its idea is to reach a large pool of customers on a global level. Although the business is not too motivated towards making quick profits, with the entrepreneurs experience and energy, this business would like to expand in future years on a consistent pace marking a reputation in the market. 2.2.  Description of the product/service Product distribution rights are freely available in retail chain and wholesale market apart from franchise outlets. However, the distributors and franchisees are expected to have a permit license to sell toys and also must abide by the legal terms and conditions that are provided by the company. Further wholesalers and retailers are not authorized to claim any legal rights about the toy apart from distribution and sale. The entire ownership and copyrights of toys rest with the manufacturing company. Further apart from consumer market, the toy would also be available for preparatory model schools, kindergarten and upper kindergarten schools. This is permitted in order to bring awareness among schools that such educational toys are also being promoted in order to make teaching skills much easier. 2.3.  Background The motive behind this business is to start an independent unit which is both useful and that sells all through the year without any halt. Both entrepreneurs have excellent business skills, one with a degree in MBA and the other with M.A (Child psychology) Both are of the view that launching an educational toy would be a massive success as this product is presently not available in the market and with this innovative idea, entrepreneurs are also of the opinion that the business would also provide employment to those who are jobless. Appendix I : Details of proprietors. Purchase of on-going concern is also a good idea, as most of the manufacturing equipment, office systems, and manpower are readily available for takeover whereas minimum operating expenses and start-up expenses are the only major expenses.  Another opinion is also stated here that a new set up of business is also a good idea whereas extra efforts and care is required until business takes its shape for start-off and take-off. 2.4.  Assumptions There are absolutely no assumptions that do not materialise or work in a practical manner. This proposed business being a mathematical and educational toy/game for kids; there are no misconeptions about the acceptance and success of currency toy/game in the toy market. 2.5.  Definitions Toy dollar currency : This means that U.S currency in wood or plastic form is designed only for learning or for playing for little children. This currency carries no commercial value or resale value. Wholesaler : Wholesaler is a licensed toy seller who is authorised to distribute toy dollar currency game to retail stores, schools, educational institutions or any other place where pre-school training or learning is provided. Franchisees : Franchisees are those who enter into contract with the entrepreneurs that no other product franchise would be undertaken within the contract period and carry exclusive rights to market toy dollar currency at a global pace with the medium of Internet or through any other effective marketing tool under the disclosure of owners of business. 3.     GENERAL analysis 3.1.  Business Mission The mission of business is to promote healthy, innovative and knowledgeable products for growing generation. In this global arena, it is required that kids have to be in a learning environment which would shape kids in a better way in development of personalities. Globalisation has evolved several global businesses wherein every business produces a new product, new idea, new promotion and motive is ultimately to make quick profits whereas our mission is far distant to such speedy money sources. Business must extend a product that is useful to consumers and in return consumers take care of companies to grow and prosper which is the give-n-take policy of this business. In fact businesses must grow along with consumers which gives a complete satisfaction both to consumers as well to entrepreneurs. The purpose of this product is to assist kids to learn about dollar currency counting in the initial stages of learning. Especially toddlers taste every toy and find out what it is meant for. That is the origin of child psychology. Whether it is a candy or a toy, toddler identifies only by tasting it. Toddlers prefer exclusive premise for breakfast, lunch and dinner and so also for play time. At times, if there is a disturbance to privacy or interest, toddlers yell in order to tell how big and important the meal and play time is. In such instance, a think over plan is here to provide knowledge to toddler about dollar currency beginning from cents. This toy comes in a 30L x 15B box with a 3 steel/plastic rods fixed in it. Coins beginning from 1 cent to 100 cents are fixed to enable toddler to learn counting of cents.    The second rod contains coins beginning from 1 dollar to 100 dollars. The third rod contains coins beginning from 1 million to 100 million. The rods cannot be removed and neither the coins. The toddler can only push from one end to the other by counting cents, dollars and millions. Three colors are chosen for three rods and also for coins for easy identification of coins denomination. There is a provision for learning addition, subtraction, multiplication and division (BODMAS) whereas it is not a must for toddlers. The market served would be entire domestic market and also depending on the marketing methods, export of sales to other countries are expected. In the initial period of launch of product, the owners are expecting a good feedback from wholesalers and franchisees. The pricing of toy would be reasonable costing $5.00 and after when sales pick up in a span of one year or more, there is a probability to increase the selling price by another $1.00. Primarily the owners would like to tap success in toy market by launching this product and also with the motive to satisfy customers who are looking for such educational promoting product. Owners would like to consult parents, buyers and other distributors for feedback and also consider opinions about the product from time to time. Goal of business would be to run a self-sufficient business apart from offering employment to others, as jobs have become necessary particularly in a country like U.S where people are working 16-18 hrs per day doing two or more part/full time jobs, the owners believe that ‘live and let others also live’. Owners are also of the fact that, money making in business is important whereas customer satisfaction is equally important.  Many businesses in the past have proved this fact that ethics in business are very important in order to grow consistently and to stay in business market. Individuals who are educated and mastered the skills for doing excellent business can very well float a business independently instead of working elsewhere and as a matter of fact, there are many housewives and couples who have begun businesses in kitchen which have later grown to be multinationals which reiterates that skill, dedication and customer satisfaction are three variables that have to be looked into to enter business field. 3.2.  Business Structure and Management The proposed business would be a private limited company with two important entrepreneurs as the driving force behind the business plan.  The management considers the advice of business consultants, accountants and legal experts in order to incorporate a private limited company, establish manufacturing unit, and commence business with administrative staff viz., accountant, marketing manager, reception desk and skilled labor . While accountant would be taking care of complete financial system of company, marketing manager would be completely responsible for marketing the product and inform management on daily basis about the feedback and response from the market. Reception would be responding to enquiries for distributors, wholesalers, retailers and other educational institutions and provide complete information to management on every day basis. Workforce would be approximately less or equal to 10 individuals in order to manufacture plastic coins and rods, make carton boxes, arrange and pack and load into transport or deliver the product to the destination.  There should also be provision for trucks, drivers and helping boys to load cartons from one place to another. Further company’s web site neatly designed providing a complete set of information about product, facility for online purchase, email, enquiry form should be made available in order to tap online sales for the product. 3.3.  Market Environment Management is confident that the product would be very well accepted in the market and would increase sales in the first month of its launch. The reason for this assessment is due to the fact that there is no other isolated currency toy in the market at present whereas other games include business as a concept for the age group of above 8yrs which are called as ‘monopoly’ . This game encourages children to count paper currency, buy hotels, resorts, which explain children that business and personal income can be earned in various forms and methods by doing buying and selling with the medium of currency. Similarly, a toddler hardly when one year old, when begins to learn alphabets and digits, a concept of currency counting helps child to gain knowledge about money and how it is counted and what are its forms. This game faces absolutely no competition as it is the first ever toy that is being launched in market for this age group of one year and above especially when it is coming in educational promotion. This does not mean that educational toys are not available in the market. There are many for kindergarten for learning alphabets, maths, science and many other I.Q games and toys. This particular model of toy is not available in the market and with this stance, when a discussion was held, many toy market experts were of the opinion that toy price being moderately low, there is absolutely no question as to why the product cannot tap success and above all, all group of consumers would evince interest in buying this product as it was revealed in a survey. 3.4.  Plant Equipment Plant and equipment required for starting this venture is no more than $50,000 which includes operating expenses. Machinery for manufacture of plastic coins, embossing of currency in various denominations, colouring, printing and steel rods manufacturing machinery and machinery for making 3015 plastic boxes. This is the major equipment that is required in order to manufacture toy currency. 3.5.  Skills Assessment There is a consultant who is experienced and who is an expert in toy market especially in designing currency, who is hired by management until the commencement of business. The guidance of expert is proving to be the most precious for the management in order to train the labor to perform and produce the desired quality of toy. One of the owners is an MBA graduate who completely acquainted with business skills to motivate labor, and maintain good HR practices with workers and employees. Apart from this capital budget, finance budget and forecast of sales is also an expertise field of this MBA graduate entrepreneur. The other owner who is M.A in psychology understands and has the ability to promote this educational toy to schools and educational institutions for bringing awareness about toy currency and its important in development of child psychology. The importance of money can never be taken for granted and it is important for parents and society to train children as how to handle money matters and how a currency can be useful in day-to-day life. In a way, this can be described as teaching of money management for children. 3.6 Risk Analysis At present, owners do not foresee any risks in commencement of business. The SWOT analysis reveals that a great strength and energy exists with owners with the fact that an innovative product is being launched with a motive to serve and educate customers. This concludes another fact that motives matter most in business and good businesses thrive on honest motives. Apart from this, MBA graduate is fully conversant with business laws, legal and corporate laws. M.A child psychology helps even better to launch more number of good toys in the market which is also another strength of the making this business plan a success. There are no possible weaknesses in the business with the fact that both the entrepreneurs have a mixed strength and good motives. Unless there is a massive unforeseen loss or event that hampers the production of business, there is no scope for any crop up of weaknesses. Opportunities are many in toy market. In fact toy market is never saturated unlike other industries. There is always something new and also there is no end for demand and supply. Threats in toy market are although at a moderate percentage, the proposed toy currency is free from any hazards as the children cannot dislocate coins and have to sit at one place and play as long as the interest goes on. Record the SWOT details in Appendix:II 4.     operational plan 4.1.  Key Business Objectives Key business objectives in â€Å"SMART†system are as follows: S – Specific : To promote toy currency as a good product in toy market. The objective of the business is to promote educational products to children under the age of 5. Certainly the motive is not behind making quick money and rather serving customers useful products and definitely making a new pattern of design and mark in business. Therefore, there is a professional code in starting this business which is why the objectives of business are very specific. M – Measurable : The performance of business is forecasted to do extremely well with toy currency entry into the market. Initial sales volume is expected to sell approximately 10000 toys in the first 5 months of launch and thereafter there is a proposal to increase 1000 nos by every month. As this is only an assumption whereas when the product truly available in market, the sales are expected to rise above assumptions. In a span of three years, i.e. by 2010, the business is expected to be really doing well with a proportionate share of sale of product in the toy market. A – Achievable : The targets set before Achievable targets within the limitations of business. Depending on the orders that would be received from various distributors, the production would be made. Although, the start-up appears to be at a low pace, there is a guarantee that future targets would be quite achievable depending on the sales and order volumes recorded each year. R – Results oriented : This business is quite practical and extends knowledge and comfort to customers. There would be no difficulties or any problems that can occur with the usage of product. The product is absolutely result-oriented and there is a premonition that by the end of first month of production, there may be a requirement to double the production in order to meet the demand of product. T – From the very first day business , management is active working operations, collecting feedback, finding new customers, distributors, picking up of orders and paying more attention that quality of goods is perfect. Initially at the end of every month, there would be a trial balance, balance sheet for taking note of sales and profits. Once the financial statements are indicating good sales track and profits, quarterly PL and thereafter half-yearly and yearly. For any business to mark success, time is the essence whereas for this project, there are absolute guarantees for success with the fact that this is an innovative product being manufactured in the interest of future generation of children. Objective 1  ·Ã‚        Objective Time frame  ·Ã‚        Conduct a professional standard  ·Ã‚        Run an efficient business 1-5 yrs  ·Ã‚        Practice business ethics 4.1.1.                                                             Implementation Strategy In this stage of implementation, firstly the incorporation certificate is to be obtained that a private limited company is being incorporated with the name â€Å"Currency Point Pvt Ltd†The two directors would be Bill Joe and Charles who would be busy in commencement of business operations. A suitable location is to be selected for installing machinery to begin production. The premises would include both production and administrative office. Staff and workers have to attend regularly until orders are picked up. Advertisement through brochures, television, classified ads and websites would enable fast pick up of sales. Further designing of website and launching for marketing is also essential. Preparation of monthly sales report, marketing report, Income and expenditure statement and targets for future months have to be recorded on a monthly basis. Suitable guidance, training and advice must be provided to workers and employees in both administration and in production. It is also good to retain employees with the fact that frequent new appointments require excessive time in recruitment, training and guidance. Appendix:IV Development Brief description rationale Cost 2008  ·Ã‚        First year of commencement of business. The objective is to market product and record sales as much as possible 10000 2009  ·Ã‚        Market and sell the product and aim to record a higher sales volume. 20000 2010  ·Ã‚        Increase business volume by exporting and also open RD centre for working on new educational toys for children. 30000 4.2 Marketing 4.2.1Market Research According to the market research conducted, toy currency is not available in the market which is designed especially for toddlers between the age group of 1 and 1 ½ years. 4.2.2       Positioning in the Market There is zero competition from competitors as there are no companies which are manufacturing this product and in fact the management owns the complete credibility of the product from the groundwork till the launch of product into the market. 4.2.3       Pricing Strategy Pricing of the product is fixed at an affordable rate keeping in the view of both poor and middle class families. Toy currency is fixed at $5.00 as MRP price in the market. 4.2.4       Target Market The market focus would be all through the United States and Europe and thereafter marketing would be shifted to Asia, Africa and other parts of the world. Here at this, it is important to take note that if orders being booked for Europe, company management would consider the opinion of customers whether the toy currency should be indicated as ‘Euro’ for European buyers and so also for other parts of the world. It is true that toy is being manufactured in dollar currency, wheras if other global customers prefer regional currencies, a provision is included to manufacture according to the currency required. However, this is only a provision and not mandatory to meet as an obligation in order increase order supplies. Toy currency is aimed at entertaining toddlers whereas if it is entertaining upper age group, this business appreciates the interest. There are no limitations or no rules for customers to buy this product. It is displayed in retail stores for $5.00 and any number of volumes can be purchased with proper billing system. 4.2.5                                                   Distribution Licenced distributors for toys are permitted to distribute toy currency after signing a contract with the company. Depending on the orders, each distributor generates, fixed incentive would be paid. E.g. 500 orders per month would give an incentive of 0.25 cents x 500 = $125.00. This rate of incentive is also applicable for franchisees. Further franchisees are not permitted to promote any other product other than toy currency. 4.2.6                                                   Promotional Strategy Visiting Montessori schools, collecting data about distributors, franchisees, advertisement are some of promotional strategies. These efforts are made in order to market toy currency in various places. The company would like to stay focused with this product at least for a period of 3 years until business is stabilised. Further company promises excellent customers service, packing and forwarding , apart from good methods of publicity through door-to-door campaign, brochures and schools. 4.2.7                                                   Sales Targets The first year of selling is targeted to be at least 10,000 nos. The second year of selling is targeted to be 50,000 nos and the third year of selling is targeted to be 100000 and above. One of the reason to target an increase by 100 fold is the pricing of toy currency is at an affordable rate and it can purchased by every parent. 4.3. Financial Plan. 4.3.1       Start-up Capital Description Budget-Amt Incorporation expenses $ 1,000 Premises for Rent $ 4,000 Machinery $ 60,000 Installation $     500 Electricity and fixtures, fittings $  1,000 Raw materials $ 10,000 Miscellaneous $     500 Total $ 77,000 Loan financing $ 100,000 Here there is a margin of $ 23000 as a safe mode of operation in order to meet other expenses if any occur at the time of production. 4.3.3 Assessment of Financial Viability of Proposed Business Owners are not investing any amount and financing of $100000 is sought from SBA or from other FIs and the repayment would be yearly $ 5000 which would take 20 months to refund entire loan amount. The cost of manufacturing of each toy currency box at production level would be $4.00 and with a profit of $1.00 the product would be marketed in consumer market. This margin of profit if it is maintained, depending on the sales, the company can record huge volume of business even in the first year of business. For e.g. $ 5.00 x 10,000 = 50,000 (profit = S.P – C.P, $ 50,000 $ 40,000 = $ 10,000) If it is assumed that in the first 6 months on an average there is a sale of 10,000 nos the profit is $ 10,000 and this is after payment of salaries and expenses, which is reasonably good. Breakeven = Operating expenses / Gross profit margin Operating expenses Gross profit margin Breakeven 2008 $ 15,000  $ 20,000 0.75 2009 $ 10,000 $ 120,000 0.83 2010 $ 12,000 $ 220,000 0.054 4.3.4       Cash Flow/Cash Position  Cash flow on monthly basis is expected to be moderately good. It can be further calculated as on an average if there is a sale of 200 nos per day 15 x $ 5.00 = $ 750 and monthly cash flow would be $ 750 x 26 (exclude Sundays) $ 19,500. If this is carried forward on for 12 months $ 19,500 x 12 = $ 234,000. The proposed annual cash flow at the end of three years would be $ 234000 x 3 = $ 702,000. Out of the above, it is required to exclude salaries, tax payments and raw material expenses or any other expenses such as depreciation to machinery, rent and payment of electricity bills. 4.3.5                            Profit and Loss Depending on the sales, a forecast of profit is made approximately to $ 10,000 in the first year as $ 10,000 and for three years the profit would be $ 30,000. 4.3.6                            Balance Sheet The equity share capital which is invested to an extent of $ 100,000 is used in fixed assets and in commencement of business. 4.3.7 Ratio Calculations Profitability = Earnings after Taxes / Sales I year : 12000/100,000 = 0.12 II year : 28000/200,000 = 0.14 III year: 192000/300,000 = 0.64 Return on Assets = Earnings after Assets / Total Assets APPENDIX I – CURRICULUM VITAE OF DIRECTORS Name : Bill Joe Age    : 26 yrs Education : M.B.A from Kelloggs school of business. Experience : 2 years as Business executive in Stand Still Toys Ltd., Los Angeles. Skills Category Grading of Skills Underdeveloped        Well Developed List of relevant skill categories 1 2 3 4 5 Dynamic, energetic and potential abilities √ Excellent business and marketing skills √ Good and hardworking √ Name : Charles Age   : 26 yrs Education : M.A in Child psychology from St.Mary’s University, California Experience : 2 years as Schoolteacher in St.Paul’s model school, Los Angeles. Skills Category Grading of Skills Underdeveloped        Well Developed List of relevant skill categories 1 2 3 4 5 Dynamic, energetic and potential abilities √ Excellent educational skills √ Good and hardworking √ APPENDIX II – SWOT ANALYSIS STRENGTHS WEAKNESSES  ·Ã‚        Education and experience OPPORTUNITIES THREATS  ·Ã‚        Great scope for developing new toys. APPENDIX III – TIMELINE OF GOALS OBJECTIVES First Year Operation Development Brief description rationale Cost First year-2008 Establishing business  ·Ã‚        Production, marketing and selling. $ 100,000 Second year-2009 Pick up of sales  ·Ã‚        Increase in sales volume $ 200,000 Third year-2010 Stabilise business  ·Ã‚        Domestic and export market $ 300,000 APPENDIX IV – MARKETING IMPLEMENTATION PLAN BUDGET  Marketing Plan Implementation Plan Budget for MI First year-2008 Establishing business and reach out for consumers Production and supply of product in domestic market. $ 100,000 Second year-2009 Identify new areas Increase in sales volume $ 200,000 Third year-2010 Stabilise business Domestic and export market $ 300,000 Appendix V Cash Flow Projections Cash flow statement Sources of funds 2008 2009 2010 Beginning cash 40,000 50,000 60,000 Sales / Income 100,000 200,000 300,000 Contributed capital 100,000 Available cash $140,000 $250,000 $360,000 Usage of funds Salaries 15,000 25,000 30,000 Operating expenses 15,000 10,000 12,000 Loan payments 0 5,000 5,000 5,000 Tax payments 2,000 2,000 2,000 Total cash out $27,000 $47,000 $49,000 Net cash flow $140,000 $250,000 $360,000 PROFIT AND LOSS Profit and Loss Account  2008 2009 2010 Total Sales 100,000 200,000 300,000 Cost of sales 80,000 160,000 240,000 Gross profit 20,000 40,000 60,000 Expenses Electricity, phone and internet 1,000 1,000 1,000 Travelling charges 1,000 500 500 Marketing 1,000 500 500 Raw material 5,000 10,000 20,000 Net profit $12,000 28,000 $38,000 BALANCE SHEET Balance Sheet 2008 2009 2010 Assets Cash and dues 40,000 35,000 30,000 Machinery 60,000 60,000 60,000 Total Assets Liabilities Loan 100,000 95,000 90,000 Total Assets 100,000 95,000 90,000 Total Liabilities 100,000 95,000 90,000 References The Business Plan is not Just a Plan, but Selling a Document Accessed January 11, 2008 http://www.1000ventures.com/business_guide/bp_startup_byvk.html Get the most out of your planning by setting smart objectives Accessed January 11, 2008 from http://www.smartmonkeymarketing.co.uk/news.php?a=20070612-1-SmartObjectives Three year projected income statement Accessed January 11, 2008 http://www.state.co.us/oed/sbdc/business/threeyear.pdf NxLeveLâ„ ¢Ã‚ Entrepreneur Business Plans Accessed January 11, 2008 http://www.nxlevel.org/download/123321_c_sU128881_s_i1591/e+bp+sum.doc
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