Montaña de Luz store

BUSINESS PLAN

Business Plan Prepared By
Dario Rubio
Operations Director
Company Address
City, State and Postcode
Best Numbers to be Reached

Date Prepared
March 2009

Table of Contents
EXECUTIVE SUMMARY ...................................................................................................................................4
MANAGEMENT AND ORGANISATION.........................................................................................................6
Management Team.......................................................................................................................................................6
Compensation and Ownership.....................................................................................................................................6
Contracts and Franchise Agreements..........................................................................................................................6
Board of Directors/Advisory Council..........................................................................................................................6
Infrastructure...............................................................................................................................................................6
Insurance.....................................................................................................................................................................6
Employee Plans...........................................................................................................................................................6
Organization Chart......................................................................................................................................................7
PRODUCT AND SERVICE PLAN......................................................................................................................8
Purpose of the Product/Service...................................................................................................................................8
Unique Features..........................................................................................................................................................8
Stage of Development..................................................................................................................................................8
Future Research and Development..............................................................................................................................8
Trademarks, Patents, Copyrights, Licenses, Royalties................................................................................................8
Government Approvals................................................................................................................................................8
Product/Service Limitations........................................................................................................................................8
Product Liability..........................................................................................................................................................9
Related Services and Spin-offs.....................................................................................................................................9
Production...................................................................................................................................................................9
Facilities......................................................................................................................................................................9
Environmental Factors................................................................................................................................................9
THE MDL STORE WILL BE SOCIALLY RESPONSIBLE BY LOOKING OUT FOR THE WELL BEING OF ITS
POTENTIAL CUSTOMERS. FOR ISSUES SUCH AS TRASH AND RECYCLING, PROPER DISPOSAL OF THESE
ITEMS WILL ENCOURAGED...........................................................................................................................9
MARKETING PLAN..........................................................................................................................................10
Industry Profile..........................................................................................................................................................10
Current Size.................................................................................................................................................................. .........10
Growth Potential............................................................................................................................................................... .....10
Geographic Location........................................................................................................................................ .....................10
Industry Trends............................................................................................................................................................. .........10
Seasonality Factors.................................................................................................................................................... ............10
Profit Characteristics........................................................................................................................................ .....................10
Distribution Networks..................................................................................................................................... ......................10
Basis of Competition........................................................................................................................................... ..................10

Competition Profile....................................................................................................................................................11
Customer Profile........................................................................................................................................................11
Target Market Profile.................................................................................................................................................11
Pricing Profile............................................................................................................................................................11
Gross Margin on Products.........................................................................................................................................11
Market Penetration....................................................................................................................................................11
Distribution Channels........................................................................................................................................... .................11
Sales Representatives........................................................................................................................................................ .....11
Direct Sales Force.............................................................................................................................................................. ....12

Business Plan
Advertising and Promotion........................................................................................................................................12
Packaging and Labelling...........................................................................................................................................12
Trade Shows...............................................................................................................................................................12
Future Markets..........................................................................................................................................................12
OPERATING AND CONTROL SYSTEMS.....................................................................................................13
Administrative Policies, Procedures, and Controls...................................................................................................13
Receiving Orders...................................................................................................................................................... .............13
Billing the Customers............................................................................................................................................ ................13
Paying the Suppliers............................................................................................................................................... ...............13
Collecting the Accounts Receivable.................................................................................................................................... ...13
Reporting to Management.............................................................................................................................. .......................13
Staff Development....................................................................................................................................................... ..........13
Inventory Control............................................................................................................................................. .....................13
Handling Warranties and Returns.................................................................................................................... ......................13
Monitoring the Company Budgets.............................................................................................................................. ...........13
Security Systems............................................................................................................................................ .......................14

Documents and Paper Flow......................................................................................................................................14
Planning Chart..........................................................................................................................................................14
Product Development......................................................................................................................................... ...................14
Manufacturing ................................................................................................................................................... ...................14
Financial Requirements....................................................................................................................................... ..................14
Marketing Flow Chart........................................................................................................................................................... .14
Market Penetration.......................................................................................................................................... ......................14
Management and Infrastructure............................................................................................................................ .................14

Risk Analysis .............................................................................................................................................................14
Salvaging Assets........................................................................................................................................................14
GROWTH PLAN.................................................................................................................................................15
New Offerings to Market...........................................................................................................................................15
Capital Requirements................................................................................................................................................15
Personnel Requirements............................................................................................................................................15
Exit Strategy...............................................................................................................................................................15
FINANCIAL PLAN.............................................................................................................................................16
Assumptions...............................................................................................................................................................16
Sales.................................................................................................................................................................... ..................16
Accounts Receivable........................................................................................................................................ .....................16
Inventory Purchases.......................................................................................................................................................... .....16
Accounts Payable............................................................................................................................................. .....................16
Marketing Expenses............................................................................................................................................................... 16
Administrative Expenses.................................................................................................................................... ...................16
General Expenses............................................................................................................................................. .....................16
Capital Expenditures........................................................................................................................................................... ...16
Depreciation/Amortisation.................................................................................................................................................. ...16
Cash Required.................................................................................................................................................. .....................16
Interest Rates.......................................................................................................................................................... ...............17
Income Tax.............................................................................................................................................................. ..............17
Break-even Analysis................................................................................................................................................. .............17

First Year Cash Flow Projections.....................................................................................................Exhibit #
First Year Projected Profit and Loss Statement................................................................................Exhibit #
First Year Pro forma Balance Sheet..................................................................................................Exhibit #
Three Year Cash Flow/Projected Profit and Loss Statement............................................................Exhibit #
Three Year Pro forma Balance Sheet................................................................................................Exhibit #
Financial Analysis/Ratios..................................................................................................................Exhibit #
SUPPORTING DOCUMENTS..........................................................................................................APPENDIX

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Business Plan

Executive Summary
Date

Recipient's Name, Title
Street Address
City, State Postcode
Dear __________:
Small Business venture began construction on the facility on (Date).The purpose of the venture is to
provide the local community with easily accessible produce, poultry, pork, coffee, crafts, and entertainment
activities, such as movies and documentaries, as an alternative to competing markets in Tegucigalpa. The
store was formed to provide a source of income to Montana de Luz while exploiting a niche in the market,
namely eliminating traveling costs and inconvenience for locals.
The current stage of development for the Montana de Luz business venture is start-up and initial operations.
The store provides food products and services not currently available in the village. Therefore, as the main
provider of necessities, desirable craft items and entertainment activities, the store possesses an optimal
business position.
The qualifications and business expertise of Dario Rubio, the sole management personnel, will provide the
foundation for the MDL business venture. The support system for the business is the MDL organization,
including the other executive staff Vicki Rush, Elen Costigan, and Lidia Romano.
The primary customer profile is the Honduran villager, whose unmet needs include accessible produce,
poultry, pork, coffee, and possibly craft items. The secondary customer profile is the American
volunteering at MDL and medical brigade volunteer, who has a disposable income and a desire for
souvenirs.
To maintain the goodwill of the community, the MDL small business venture will take a nonconfrontational, non-competitive market penetration plan. The business venture will capitalize on unique
products ensure other Honduran entrepreneurs are not undermined. There are no objectives to penetrate
exterior markets.

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Business Plan
The marketing aspect of the small business venture is provided through a visible presence in the community
and word of mouth.
The amount of cash required to operate the business will be determined (facility completion, costs,
electricity, freezer, souvenir supplies, door, possibly new windows, tables, shelving, projector, dvd player)
The money invested to date is ___. The finances will be handled through the Montana de Luz nonprofit
organization; the investors are therefore not anticipating financial returns. All capital will be acquired
through donations to MDL.
Respectfully Submitted,

Dario Rubio, Operations Director at Montaña de Luz

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Business Plan

Management and Organisation
Management Team
Dario Rubio, MBA, will be the chief executive officer of the business venture. Qualifications are listed in
the appendix. Other board members include the MDL executive staff. Future employees of the venture
may include older, responsible children living at MDL.
Compensation and Ownership
The stores employees will be paid at least the minimum wage, 4,000 lempira per month. Additionally, the
wage rate must take into consideration December and June bonuses, common practice in Honduras. The
children’s incentive plan will include a cut of the profits if their respective items sell in the store. A detailed
inventory of the products and their markets will have to been enacted for the children’s compensation plans.
Contracts and Franchise Agreements
Work contracts will be decided upon employment.
Board of Directors/Advisory Council
Board members will include MDL executive directors Vicki Rush, Elen Costigan and Dario Rubio.
Infrastructure
Necessary outside advisors are yet to be determined.
Insurance
Investigate food safety laws and license requirements.
Employee Plans
Incentive for the children creating the crafts is receiving a cut of the profit if their particular product is sold.
Incentives for the employee of the store need to be discussed with Dario. Bonuses will be awarded in
December and June.
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Business Plan
Organization Chart
Dario Rubio will supervise the store and under his supervision will be one employee. Children may also
have the opportunity to assist the employee by working at the store.

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Business Plan

Product and Service Plan
Purpose of the Product/Service
The purpose of the store selling products solves a problem within the village. The store provides
convenient necessary food items and small luxury items, such as crafts and coffee.
Unique Features
The unique feature of the store include: convenient location, quality of organic food products,
documentaries which provide insightful information to the community on a variety of issues, and local
crafts made by children living at MDL.
(include pictures and store layout with dimensions)
Stage of Development
The store is in the initial start-up stage and small production run. In the small production run, the children
were given the opportunity to make crafts with the idea of making a profit. This run was a success, as the
children eagerly participated in the craft making.
Future Research and Development
Research to be done includes investigating prices of food products in the local markets in order to price the
items appropriately, understanding the local businesses to avoid hurting competing entrepreneurs.
Trademarks, Patents, Copyrights, Licenses, Royalties
Look up any copyright information in regards to showing movies.
Government Approvals
Research necessary licenses and government approval for the store.
Product/Service Limitations
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Business Plan
The shelf-life and storage of the perishable food items need to be taken into consideration. The limited
dimensions of the store and the limited capacity of MDL to raise animals and plants for food will restrict
the amount of products that can be sold in the store.
Product Liability
Research liability, the extent to which MDL will held responsible for sub-par food stuffs. Research
insurance policies in regards to filing lawsuit against MDL. Research food and safety regulations to be
upheld.
Related Services and Spin-offs
Conduct future surveys within the village to better understand their changing needs.
Production
All products will be produced internally. The exact production process should be clearly defined including
the roles of the children and the employees. Careful thought should be applied to who will plant the
vegetables, tend the garden, and harvest the crop. Additionally, the acquisition and care of the animals and
who bares the responsibility for their well being should be explicitly stated.
Facilities
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Environmental Factors

The MDL store will be socially responsible by looking out for the well being of its potential customers. For
issues such as trash and recycling, proper disposal of these items will encouraged.

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Business Plan

Marketing Plan
Industry Profile
Current Size
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Growth Potential
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Geographic Location
The store is ideally located in the center of the village, surrounded by residential areas. It is also accessible
to nearby villages.
Industry Trends
Research
Seasonality Factors
Research seasonal factors and fluctuating demand during holiday months and in times of increased
consumer income. Take into consideration the different growing season of the different vegetables, for
example, plentiful in the rainy season and more scarce in the dry season. Additionally, certain foods are
consumed more often at certain times of the year, for example, pork is consumed more often during the
holidays in December.
Profit Characteristics
Profit characteristics will depend on the prices of final goods. Prices will be based on prices of similar
goods in Tegucigalpa.
Distribution Networks
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Basis of Competition
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Business Plan
Industry competes on basis of price and quality; however, skirting competition through product
differentiation is ideal.
Competition Profile
The competition is the markets in Tegucigalpa. An advantage that the MDL store will have over those
markets is that it is located in a place that can be within walking distance, eliminating the cost and time of
taking the bus to Tegucigalpa. A disadvantage of the MDL store is that it is much smaller than the variety
of markets in the capital city, and so MDL will have less variety and smaller quantity of goods.
Customer Profile
Montaña de Luz attracts at least eight different volunteer groups every year, including groups from Ohio
and North Carolina and students from the Ohio State University. It is assumed that all American volunteers
will be able to afford the crafts being sold in the store. The MDL store also serves the Honduran population
living in nearby villages.
Target Market Profile
Find out the number of people living in the village to evaluate how many potential customers there are.
Pricing Profile
Pricing of the goods in the store will be based on current market prices. It is important that the goods be
priced neither significantly higher nor lower than the market price in order to ensure both a fair price and
fairness toward any competitiors.
Gross Margin on Products
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Market Penetration
Distribution Channels
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Sales Representatives
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Business Plan
Direct Sales Force
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Advertising and Promotion
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Packaging and Labelling
Chicken and pork will need to be packaged.
Trade Shows
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Future Markets
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Business Plan

Operating and Control Systems
Administrative Policies, Procedures, and Controls
Receiving Orders
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Billing the Customers
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Paying the Suppliers
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Collecting the Accounts Receivable
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Reporting to Management
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Staff Development
Training for the staff at the MDL store can be conducted by Dario Rubio. If additional training is needed, it
will be arranged by Dario.
Inventory Control
In order to control inventory, records of the products sold and in stock must be kept at all times. This will
be done manually at the store where written records will be kept. Staff must be trained in keeping record of
what items were sold each day. In deemed necessary, those handwritten records may be transferred to a
computer at MDL. Additionally, if the children are to receive a share of the profit from the craft items they
created, it must be clear which child made the item that has been sold.
Handling Warranties and Returns
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Monitoring the Company Budgets
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Business Plan
The budget of the MDL store will be kept by Dario Rubio.
Security Systems
Currently, the store needs doors with locks for security purposes. In addition, it is possible that valuable
items and the cash box will be taken to the MDL campus, where security is greater, at the end of each day
Documents and Paper Flow
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Planning Chart
Product Development
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Manufacturing
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Financial Requirements
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Marketing Flow Chart
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Market Penetration
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Management and Infrastructure
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Risk Analysis
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Salvaging Assets
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Business Plan

Growth Plan
New Offerings to Market
Currently, the MDL store does not plan to expand. Although showing films may not be part of the initial
plan of the store, after enough money has been generated, equipment will be purchased to show films in the
yard next to the store building. Materials needed for this project include tables, chairs, a projector, a DVD
player, and a screen onto which the films will be projected.
In necessary, improvements and upgrades may be made to the MDL store building within the first few years
of operation.
Capital Requirements
Meat and vegetables will be purchased by money raised by MDL and will be part of their budget.
Personnel Requirements
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Exit Strategy
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Business Plan

Financial Plan
Assumptions
Sales
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Accounts Receivable
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Inventory Purchases
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Accounts Payable
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Marketing Expenses
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Administrative Expenses
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General Expenses
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Capital Expenditures
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Depreciation/Amortisation
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Cash Required
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Business Plan
The money required to build the store was provided by an $11,500 grant. Money was also donated for the
store construction. Materials for crafts for the children to make have been donated as well. The costs of
purchasing animals, plants and seeds are yet to be determined.
Interest Rates
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Income Tax
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Break-even Analysis
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