business plan
Modify a business plan. There are not many parts to be modified, only the marketing strategy needs to be modified, and other parts need not be modified. The specific requirement is to add the Red Sea Strategy and Blue Sea Strategy into this part, and provide explanations and examples for each market strategy. Give specific examples.
Tower
Supply Company LLC.
Business Plan
Elyus Abker and Mateo Diaz
Founders
2018
TOWER SUPPLY COMPANY LLC. 1
Executive Summary
Tower Supply Company is a new supplier for telecommunications-infrastructure products. The company was formed for the purpose of selling and distributing wireless communications products. Over the course of its existence, Tower Supply Co. has evolved to sell to local contractors. It is owned and operated by Elyus Abker and Mateo Diaz; who founded the company in 2018 and is currently in good standing. Abker and Diaz are looking to expand their business by opening a new location in Las Vegas.
Tower Supply Co. is currently located in Lake Elsinore, Southern California. Their location conveniently locates them between the two major counties of San Diego and Los Angeles. This location allows Tower Supply CO. to have a bigger advantage over other suppliers because they are able to deliver at a faster speed. The warehouse leased to conduct business consists of 2900 square feet, allowing for adequate space to conduct the daily operations as needed.
The cost projected total is estimated to be $____________. These are the details of the project:
Las Vegas New Site Lease $____________
*See Attachment 1 for Break Down
SIte Merchandise and other Necessary Equipment $____________
*See Attachment 2 for Break Down
Product
Tower Supply Company provides a variety of products needed to complete our customer’s tasks and with today’s impossible deadlines in this industry; Companies rely on a supplier to help with the proper products and an easier way to receive these products.
Tower Supply Company’s products and service provide the following advantages to customers.
· A full range of products
· New products on the market
· Same day local delivery
· Discounts
Their goal is to become one the of the leading suppliers for California and its neighboring states within the next few years.
The Company
The Market
The Wireless communication market is expected to witness considerable growth over the next decade with fifth-generation mobile networks (5G) just rolling in. The new generation mobile network is likely to provide the capacity needed to support all mobile wireless devices.
Keys to Success
Timing is critical in this industry, Tower Supply Company is taking advantage of an opportunity to become a highly distinguished and recognized industry leader because of certain key advantages:
· The management team has a unique combination of business knowledge and experience in this market.
· Tower Supply Company has combined its expertise to offer products that customers demand.
· Tower Supply Company has established relationships with leading companies in the industry and customers.
Company Summary
Mission
The company was initially formed in 2018 by Elyus Abker and Mateo Diaz. They saw how rapidly the telecommunications industry was growing and wanted to capitalize knowing there wasn’t much competition. Through prior experience on the field we have direct knowledge of the industry, extensive research experience, Tower Supply Company has an advantage in the marketplace and can provide exactly what the customers is looking for.
Tower Supply Company is committed to continued high levels of customer service and dependability throughout our current and future locations and outside sales representatives. Tower Supply Company is striving to be one the of the leading suppliers for California and its neighboring states within the next few years. Tower Supply Company’s’ critical success factors include funding, marketing, quality sales professionals, good management, aggressive branding, increasing reach, being specific to the needs of the industry, competitive intelligence and remaining dynamic to stay ahead of the evolving telecommunication industry.
In order to achieve this goal, Tower Supply Company critical success factors will be to respond quickly to technology changes/be there early, provide high-quality materials, continue to invest time and money in marketing and advertising, continue to expand into new markets, and stay ahead of the “technology curve.” Tower Supply Company has a combined total of over 15 years’ experience in the Telecommunications industry.
Location
Regulations
Tower Supply Company is required to comply with various rules and regulations among several local, state, and federal agencies. Locally, the company is required to maintain its business license and comply with local regulations and city codes. From a State level, the company is required to comply with all State laws concerning employment law, corporate law. From a Federal level, the company is required to comply with additional consumer product laws, taxation, etc.
Tower Supply Company accounting policy follows generally accepted accounting principles. Tower Supply Company financials are turned over to the CPA on a quarterly basis. Tower Supply Company uses Quick Books for its accounting software; The fiscal year is based on year-end. Financial reporting methods include monthly, quarterly, and annual statements. An annual audit is to be performed by the firm’s CPA firm in February.
Tower Supply Company carries insurance for business liability and automobile. Additional insurance programs such as worker’s compensation will most likely be consummated by the close of the third quarter of 2020.
Market Analysis Summary
Industry
With almost 270 million
mobile phone internet users
, the United States is one of the largest mobile communication markets in the world. Over 280 million Americans are projected to
use a smartphone by 2022
. The United States is the country with the
third-most smartphone users worldwide
, trailing only China and India. The number of cellular subscribers in the United States has increased dramatically in the past decade. In 2010, The number of new subscribers exceeded 60 million, with a record 190 million net new subscribers in 2015, that is a 217% increase in five years. By the end of 2019 the number of subscribers reached 265 million. With 79% of the U.S population using a cell phone, it is obvious this industry is expected to generate increased revenues.
There are several trends that are driving this growing industry. The most significant is the use of mobile devices, statisticians predict that by 2023, mobile device users will increase to 7.33 billion globally. Social media usage, mobile device gaming and video streaming are in the early stages of what most analysts predict will be a period of explosive growth. The continuing advances in high-speed mobile services and Internet connectivity between devices keep driving innovation to new levels. Much of the industry’s focus is on providing faster data services.
Tower Supply Company continues to conduct industry analysis to stay current on the nature and dynamics of the industry. This process helps management develop insight and devise sustainable business and marketing strategies to assure future success and avoid making decisions based on blind assumptions. Tower Supply Company’ business model was developed under two areas of knowledge: understanding the industry, and by having worked for companies who are now customers of ours.
Company advantages
Effective competitive strategies are built upon understanding what defines and determines if another company is a competitor. Tower Supply Company is centralized in riverside county and has one major competitor in the county, but they are not a threat due to the array of services we offer, which includes same day local delivery, competitor price matching, volume discount and early payment discount.
Tower Supply Company’s’ outline for competitive strategy includes monitoring competitors for any changes, future plans and new products. Devising marketing strategies, compare pricing by rivals, and remain watchful of new developments and innovation by phone carriers, and respond accordingly.
Management
The company was initially formed in 2018 by Elyus Abker and Mateo Diaz. The legal name of the company is Tower Supply Company Inc. The company’s management philosophy is based on responsibility and mutual respect. Tower Supply Company was formed as a company committed to fulfill all customer needs when it comes to telecommunications infrastructure products. Tower Supply Company was capitalized from owner initial investments. These funds were used for acquiring inventory, developing equipment and a complete product line, and all cost to open our location.
Tower Supply Company capitalized on the growing telecommunications industry to create a niche market for its products. Through its research and development, Tower Supply Company has maintained a technological lead in the marketplace and provides the best quality care for the consumer.
Product/Services
Tower Supply Company provides a variety of products needed to complete our customer’s tasks and with today’s impossible deadlines in this industry; Companies rely on a supplier to help with the proper products and an easier way to receive these products.
Tower Supply Company’s products and service provide the following advantages to customers.
· A full range of products
· New products on the market
· Same day local delivery
· Discounts
Competitive Comparison
Tower Supply Company is well positioned as a significant player in the southern California area. New industry research and upgrades will be on the cutting edge to improve our products and ensure that Tower supply Company remains a leader in this field. In comparison to the other key industry players, Tower Supply Company offers a greater complement of products and services that make it a truly one-stop shop for Telecommunication infrastructure product
Marketing Strategy
Tower Supply Company developed its sales and marketing strategy by analyzing its own internal strengths and then analyzing current market conditions. This process helped Tower Supply Company create its marketing and sales strategy to leverage its competitive advantages with a unique marketing strategy, thus establishing it as one of the leading suppliers for Southern California.
The overall marketing plan for Tower Supply Company’s’ service is based on the following fundamentals:
· The segment of the market(s) planned to reach.
· Distribution channels planned to be used to reach market segments: Warehouses and sales representatives.
· Educate future employees and customers about our products.
· Substantially increase sales over 2019 levels.
· Position the company as one of the top suppliers to the industry.
· Make a major branding effort emphasizing Tower Supply Company name and array of products.
· Create new digital collateral marketing materials (Catalogs, Constant Contact).
· Media placements including social media, Internet and banner advertising.
Pricing Strategy
Tower Supply Company prices are competitive and affordable for businesses. The company has also established tier pricing for customers, Bulk purchasing discounts and price matching. Tower Supply Company manufactures 80% of its products overseas which enables the company to reduce its cost of goods sold, increase revenue, and pass on the savings to businesses and consumers.
Marketing Programs
Advertising programs include direct response advertising, relationship building, direct sales efforts. Tower Supply Company will continually inform businesses and consumers through digital collateral marketing and social media about products and new services. As an extra incentive for customers and potential customers to remember Tower Supply Company name, the company sponsors events and distributes advertising apparel with the company logo. This will be an ongoing program for the company, when appropriate and where it is identified as beneficial. The objective of incentives is to portray Tower Supply Company goals and products as an attractive functionality. It is also to show customers our appreciation.
Competitive Edge
Activities contributing to company success include identifying emerging trends and integrate them into Tower Supply Company operations, respond quickly to technology changes/be there early, provide high-quality materials, continue to invest time and money in marketing and advertising, continue to expand into new markets, and stay ahead of the “wave.”
Our future is highly dependent upon measuring resources we need in order to execute our plans and be competitive. Our method to be successful is estimating our own company growth, sales, and cash flows. Our resources are also measured in terms of people, equipment and financials. Resources are available as needed to meet the industry demand. In general, our strengths include business management, knowledge of the telecommunications industry and hands on experience in the industry.
Sales Forecast
The following table and chart illustrate the projected sales forecast of 2020 through 2022. Prior to the virus we had estimated a growth of 100% in 2020 but it drastically affected our sales, but we still plan on a 100% gain per year after 2020.
SALES FORECAST
2020
2021
2022
TOTAL SALES
$220,000
$1,029,184.00
2,058,368
COGS
$77,000
$300,000
$585,000
California Sales
$220,000
$500,000
$875,000
Nevada Sales
$0
$500,000
$875,000
Idaho Sales
$0
$0
$200,000
Personnel Plan
Factors determining future staffing include growth, demand on existing resources, future capabilities needed, and budgeting. In the future, Tower Supply Company will require a management team.
PERSONNEL PLAN
2020 (JUL-DEC)
2021
2022
CA Location Manager
$0
$54,080
$56,784
CA Warehouse Staff
$40,560
$40,560
42,588
NV Location Manager
$0
$54,080
$56,784
NV Warehouse Staff
$0
40,560
42,588
ID Location Manager
$0
$0
$56,784
ID Warehouse Staff
$0
$0
42,588
TOTAL PEOPLE
2
4
6
Total Payroll
$40,560
$189,280
$298,116
Funding
Financial Considerations
It is estimated that Tower Supply Company will have strong profits based on $2 million in sales by Year 2022. Tower Supply Company is currently seeking funding in the amount of $250,000 as a long-term loan for the purpose of opening additional locations, hiring staff, marketing, and advertising.
Use of Funds
Tower supply Company is currently seeking funding in the amount of $250,000 for the purpose of opening additional locations, inventory, hiring staff, marketing and advertising. Use and distribution of proceeds: Expand into other markets, further build the brand name through marketing, advertising, and promotion; and acquire new products to add to our inventory. Funds will also be directed into business relations, internet advertising, print advertising, and social media advertising. The initial investment will be used for our new location in the Las Vegas Market and inventory for that location. It is expected that by 2022 the company will self-finance all future new locations.
USE OF FUNDS
Use
Amount
New location Start up (Yearly Cost)
$50,000
Marketing & Advertising
$15,000
Payroll
$80,000
Inventory
$100,000
Miscellaneous
$5,000
Total
$250,000
Financial Projections
Financial projections are based on sales volume at the levels described in the revenue section and presents, to the best of management’s knowledge and belief, the company’s expected assets, liabilities, capital, revenues, and expenses. Further, the projections reflect management’s judgement of the expected conditions and its expected course of action given the hypothetical assumptions.
Annual Growth: We expect growth to increase by 100% per year on the basis that the company will be stepping up marketing and sales efforts, as well as initiating new partnerships with. These strategies are aimed to build momentum and critical mass within the company and its overall sales results.
Cost of Goods: Tower Supply Company expects that its products will bear a reasonably high markup, which translates to a relatively low cost of goods. Our cost of goods includes consideration cost of products, shipping charges and Tariff charges.
Marketing/Promotion: We group advertising, promotions, and retail outlet marketing under this category.
New Locations: We estimate that each new location will cost $250,000 to open up and we anticipate opening 2 location by 2022
Other: We estimate that we may need additional funds for other promotions, and this is set aside in a special fund.
Rent: It is assumed that rent will be an average $2500 per month per store.
Salary: Figures are estimated based on the national average for similar positions. They assume however, the hiring of a store manager and warehouse staff Per location by 2022.
Utilities: Figures are estimated. Management estimates that utilities will be at $500 per month per store.
Profit and Loss
Jan – Dec 2020
Jan – Dec 2021
Jan – Dec 2022
Total
% of Income
Total
% of Income
Total
% of Income
Income
Sales
514,592.00
100.00%
1,029,184.00
100.00%
2,058,368.00
100.00%
Total Income
$ 514,592.00
100.00%
$ 1,029,184.00
100.00%
$ 2,058,368.00
100.00%
Cost of Goods Sold
Cost of Goods Sold
150,000.00
29.15%
300,000.00
29.15%
585,000.00
28.42%
Total Cost of Goods Sold
$ 150,000.00
29.15%
$ 300,000.00
29.15%
$ 585,000.00
28.42%
Gross Profit
$ 364,592.00
70.85%
$ 729,184.00
70.85%
$ 1,473,368.00
71.58%
Expenses
Advertising & Marketing
14,681.94
2.85%
19,575.92
1.90%
29,363.88
1.43%
Bank Charges & Fees
3,755.09
0.73%
5,006.78
0.49%
7,510.17
0.36%
Car & Truck
10,522.32
2.04%
14,029.76
1.36%
21,044.64
1.02%
Equipment Rental
405.35
0.08%
540.46
0.05%
810.69
0.04%
Insurance
2,338.94
0.45%
2,338.94
0.23%
3,508.41
0.17%
Legal & Professional Services
2,118.00
0.41%
2,118.00
0.21%
3,177.00
0.15%
Meals & Entertainment
5,953.88
1.16%
7,938.50
0.77%
11,907.75
0.58%
Office Supplies & Software
21,816.30
4.24%
21,816.30
2.12%
32,724.45
1.59%
Other Business Expenses
2,438.48
0.47%
2,438.48
0.24%
3,657.72
0.18%
Rent & Lease
52,745.00
10.25%
77,000.00
7.48%
96,250.00
4.68%
Repair & Maintenance
8,276.15
1.61%
11,034.86
1.07%
16,552.29
0.80%
Repairs & Maintenance
681.42
0.13%
681.42
0.07%
1,022.13
0.05%
Service
786.00
0.15%
786.00
0.08%
1,179.00
0.06%
Shipping Expense
12,363.78
2.40%
16,485.04
1.60%
24,727.56
1.20%
Supplies & Materials
4,538.98
0.88%
4,538.98
0.44%
6,808.47
0.33%
Taxes & Licenses
37,145.88
7.22%
37,145.88
3.61%
55,718.82
2.71%
Travel
1,251.80
0.24%
1,251.80
0.12%
1,877.70
0.09%
Uncategorized Expense
40,560.00
7.88%
86,528.00
8.41%
277,680.00
13.49%
Utilities
4,825.26
0.94%
6,433.68
0.63%
9,650.52
0.47%
Total Expenses
$ 227,204.55
44.15%
$ 317,688.80
30.87%
$ 605,171.20
29.40%
Net Operating Income
$ 137,387.45
26.70%
$ 411,495.20
39.98%
$ 868,196.80
42.18%
Discount Expense
2,500.00
0.49%
3,609.00
0.35%
5,413.00
0.26%
Total Other Expenses
$ 2,500.00
0.49%
$ 3,609.00
0.35%
$ 5,413.00
0.26%
Net Other Income
-$ 2,500.00
-0.49%
-$ 3,609.00
-0.35%
-$ 5,413.00
-0.26%
Net Income
$ 134,887.45
26.21%
$ 407,886.20
39.63%
$ 862,783.80
41.92%
Projected Balance Sheet
The following table is the projected balance sheet.
Accounts
2020
2021
2022
ASSETS
Total
Total
Total
Checking Account
24,059.00
71,953.00
152,838.00
Total Bank Accounts
24,059.00
71,953.00
152,838.00
Accounts Receivable
131,220.00
262,441.00
524,883.00
Total Accounts Receivable
131,220.00
262,441.00
524,883.00
Inventory Asset
247,000.00
330,000.00
495,000.00
Total Other Current Assets
247,000.00
330,000.00
495,000.00
Total Current Assets
402,279.00
664,394.00
1,172,721.00
TOTAL ASSETS
402,279.00
664,394.00
1,172,721.00
LIABILITIES AND EQUITY
Liabilities
Total Accounts Payable
5,000.00
15,000.00
25,000.00
Credit Cards
Credit Card 1
6,000.00
10,000.00
12,500.00
Credit Card 2
4,000.00
10,000.00
12,500.00
Total Credit Cards
10,000.00
20,000.00
25,000.00
Other Current Liabilities
CA Tax and Fee Payable
28,000.00
40,000.00
80,000.00
Idaho Tax and Fee Payable
12,000.00
Nevada Tax and Fee Payable
12,000.00
40,000.00
80,000.00
Total Other Current Liabilities
40,000.00
80,000.00
172,000.00
Total Current Liabilities
45,000.00
115,000.00
222,000.00
Long-Term Liabilities
300,000.00
250,000.00
100,000.00
Personal Loan
0.00
0.00
0.00
Total Long-Term Liabilities
0.00
0.00
0.00
Total Liabilities
45,000.00
115,000.00
222,000.00
Equity
Opening Balance Equity
-19,975.00
-19,975.00
-19,975.00
Owner’s Investment
0.00
0.00
0.00
Owner’s Pay & Personal Expenses
-52,000.00
-104,000.00
-208,000.00
Retained Earnings/ Savings
43,740.00
87,480.00
174,961.00
Net Income
120,295.00
378,702.00
804,415.00
Total Equity
92,060.00
342,207.00
751,401.00
TOTAL LIABILITIES AND EQUITY
137,060.00
457,207.00
973,401.00