None Persuasive Essay Example For Students

None Persuasive Essay Executive SummaryThis business plan details the launch of a start-up company known as the Import Export Company (IEC). The company functions as a middleman in purchasing housewares from manufacturers in China and reselling the products to retail buyers in the US and Canada. The Import Export Company is primarily an independent import/export business. The products we import from China are resold to retail buyers in the US; in addition, we export the products from China directly to retail buyers in Canada. Without maintaining inventory, the company ships the product directly from China to the US and Canada. Our product catalog focuses on housewares products that appeal to trend-minded US and Canadian consumers. Product pricing is geared toward budget-conscious consumers seeking a current look for their homes, without paying upscale prices. In 2003, China was the third largest country trading with the US, importing and exporting a combined $127 billion in goods (US Census Bureau, 2003). As of November 2003, China exported $25.1 billion in goods to the US, up 25.8% over 2002 (US Department of Commerce). The IEC has developed initial relationships with manufacturers and retailers. Our marketing plan targets a market of 160 retailers in the US that specialize in Home Furnishings and Housewares. The company has targeted fifty Canadian retailers that also meet our target market requirements. The owners are contributing $15,000 ($7,500 each) in start-up capital from personal savings, in addition to a loan of $30,000 from friends and family. The loan will be repaid at 6% interest when the company becomes stable in the second year of operations. After initial start-up expenses, the company has a starting Cash Balance of $29,880. The company is forecasting $350,500 in first year sales revenue, with a Cost of Goods projected to be 60%. Cost of Goods directly reflects our targeted 40% profit margin. We anticipate doubling our sales revenue for the first three years of operations as we develop our manufacturing and retail buyer relationships. Sales revenue increases in our second year to $701,000 and $1,402,000 in our third year. The company projects a Net Profit of $40,665 in our first year of operations, increasing to $139,944 in the second year and $317,688 in the third year. Our Cash Flow objective in the first year is to not allow our Cash Balance to fall below $15,000 in any given month. We anticipate a Net Cash Flow of $17,103 in our first year of operations, increasing to $28,382 in our second year and $114,564 in our third year. Our projections show a Cash Balance of $46,983 in our first year, increasing to $75,365 in our second year and $189,928 in our third year. ObjectivesThe objectives of the Import Export Company are to: Generate first year sales of $350,500, doubling annually for the following two years. Establish additional strategic relationships with manufacturers and retail buyers representing retail stores in the Home Furnishings and Housewares sector. Maintain net margins of 40%. MissionThe IEC imports home furnishing and housewares products from Chinese manufacturers at the lowest possible price for resale to home furnishings and housewares retail stores in the United States and Canada at competitive prices to generate volume unit sales. Company SummaryThe IEC is primarily an independent import/export business. We will import (buy) products from manufacturers in China and resell these products to retail buyers in the US, in addition to exporting the products for resale to retail buyers in Canada. As a start-up company, our primary business will be locating and sourcing unique housewares products that appeal to trend-minded US and Canadian consumers. Our sourcing will focus on housewares product manufacturers in China, from whom we will identify products for inclusion in our product catalog. We will market our product catalog to direct buyers for home furnishing and housewares retailers in the US and Canada, to whom we will sell the products. When product orders are obtained from retail buyers, an order will be issued to the manufacturer, who then produces and ships the product directly to the retail buyer. Company OwnershipThe company is co-owned by two individuals who will each maintain 50% ownership of the company. The owners have extensive experience in importing goods from Asia and selling to retail buyers in the US and Canada. The company will be formed as a Limited Liability Corporation. The company will obtain local and state business licenses. Additionally, the company will apply for an Employer Identification Number from the federal government. The company will be located in California, housed in a leased, 200 square foot furnished office space and will carry adequate business insurance. The company will not warehouse or store products, as the company will function as a middleman. ProductsThe IEC will focus primarily on importing home furnishings, housewares, and giftware products. The products will be selected for their appeal to trend-minded consumers in the US and Canada, primarily purchasers that are between 25-45 years old and concerned with current decorating trends. Products with a high value/low price position will be identified for inclusion in our product catalog. The products offered in the Import Export Companys brochure will include: Candles and candlestick holders Picture frames Clocks Throw pillows Decorative tabletop items Although products are primarily non-branded in that they do not bear any manufacturers brand name, we will provide private label orders of all products, allowing the buyers to place their companys identifying marks on the products. Private labels are generally thought to be good values by the consumers. SourcingFor sourcing imported products, the company has developed strategic relationships with several manufacturers in China. The company will focus its sourcing efforts during the first year in identifying additional manufacturers and products for inclusion in the company catalog. Sourcing goals for the next 12-months include: Developing ten new strategic relationships with manufacturers in China Identifying 20-30 new products for inclusion in the company catalog We will obtain sourcing contacts by establishing communications with manufacturers and sending email, letters, and faxes to companies identified as potential resources. We will request personal meetings with representatives of the manufacturing companies and travel to China to meet one-on-one with the companies. These resources will be identified through: Import/Export industry publications International Ch amber of Commerce Import/Export industry trade shows Internet research for housewares manufacturers in China World Trade Centers US Department of Commerce Additionally, the company has developed strategic relationships with freight forwarders and customs brokers to manage the logistics of all orders. TechnologyThe company will incorporate technology advances for logistics, order management, and online publishing to help automate the order and delivery process. Future ProductsThe company will continuously update its product catalog to include the most current home furnishings trends, remaining focused on small, high-volume products within the home furnishings sector. Products that have fallen out of fashion will be removed from the catalog unless they consistently receive buyer orders. Market Analysis SummaryThe IEC trades in the international import and export industry. The import/export industry in 2003 represented $1061 billion of goods imported into the US, an increase of 8.4% over 2002. US exports totaled $928 billion, reflecting a 3.9% increase over 2002 (US Department of Commerce). The company focuses on two areas: Import: The IEC imports consumer house wares products from China for resell to US retail buyers. In 2003, China was the third largest country with which the US trades, importing and exporting a combined $127 billion in goods (US Census Bureau, 2003). As of November 2003, China exported $25.1 billion in goods to the US, up 25.8% over 2002 (US Department of Commerce). Export: The IEC exports consumer house wares products from manufacturers in China to retailers in Canada. In 2003, Canada was the largest country with which the US trades, importing and exporting a combined $292 billion in goods (US Census Bureau, 2003). As of November 2003, US exports to Canada totaled $156 billion, up 4.9% over 2002 (US Department of Commerce). For import/export assistance, the company will utilize the consulting services of the following agencies:The Small Business Administrations (SBA) Office of International TradeThe US Department of Commerce International Trade AdministrationThe Export-Import Bank of the United StatesThe International Chamber of CommerceThe World Trade CentersMarket SegmentationThe Market Analysis chart indicates that these two sectors, assuming continued steady growth rates, will reach a combined market of $251 billion by 2008, with a Compound Average Growth Rate (CAGR) of 8.58%. Table: Market AnalysisPotential CustomersGrowth200520062007CAGRImported Goods from China to US26%$25,100,000,000$31,575,800,000$39,722,356,40025.80%Exported Goods from US to Canada5%$156,000,000,000$163,644,000,000$171,662,556,0004.90%Total8.58%$181,100,000,000$195,219,800,000$211,384,912,4008.58%Industry AnalysisThe Import Export Companys customer groups are primarily large retail chain stores that offer Home Furnishings and Housewares at low to moderate pricing. According to Dun and Bradstreet, in 2004 the Home Furnishings sector represents a $546 million industry with 347 major participants. Conservative estimates forecast an annual growth rate of 2% in the US. Manufacturing order sizes have steadily declined as the industry reacted to the worldwide recession of recent years. Large retail chains have grown through mergers and acquisitions, while buyers have increased their buying power through consolidation. Vietnam Persuasive EssayAfter identifying products that meet our criteria, we will request an initial Request For Quotation (RFQ) from the manufacturer. The manufacturer will respond with a pro forma invoice with the following information:Price per unit in US dollars (including shipping, packing, and insurance)QuantityProduct description Product specifications for weight and dimensionsPacking specificationsPayment TermsThe following are import costs for the example order: CostsCIF (landed cost)$5,000Duty (5%)$50US Tax$10Brokerage Clearance and Reforwarding$30Letter of Credit (.25%)$5Total Landed $5,095 or $5.10 per unitOur targeted markup to retailers is 40% above the wholesale price paid to the manufacturer. For example, if we purchase a product for $5.10 per unit landed cost (including all shipping and insurance costs) from the manufacturer, we would then sell that product to a retail buyer for $7.14, resulting in a net profit of $2.04 per unit. $5.10 + 40% = $7.14The Import Export Company will focus on volume sales orders of at least 1,000 units per retailer order. In this example, an order of 1,000 units at a net profit of $2.04 per unit would result in a profit of $2,040 for the company. $2.04 x 1,000 = $2,040Promotion StrategyWe believe that the most important element of promoting our company is in cultivating and maintaining personal relationships with product manufacturers and retail buyers. We will identify and establish relationships with at least ten manufacturers in our first year. We will negotiate with each manufacturer for the lowest price for each product, along with favorable terms including Letters of Credit. From these negotiations, we will determine an acceptable profit margin and unit pricing for retail buyers in the US and Canada. An electronic catalog will be created, with product descriptions, photos, retail unit pricing, volume price discounts, and credit terms for presentation to retail buyers. Marketing ProgramsAll products will be listed in an electronic product brochure/catalog, maintained in electronic file format. The brochure can be easily updated using off-the-shelf publishing software, operated by the company staff on laptop computers. Pr oduct pictures will be generated at the manufacturers facilities by company staff through the use of photo cell phones. The catalog is easily updated and accessed on the companys website, and can be emailed to customers for immediate review. We will present our catalog in-person and via email to retail decision-makers. The company will also maintain a state-of-the-art website that showcases our current product catalog. The website will provide for online ordering and order-tracking to streamline the logistics process. To reach our sales goals, we will follow the following marketing plan:Make contact with all targeted retail companies in the first three months of operations by sending letters of introduction by fax, email, and direct mail. The information provided to the retail buyers will include our product catalog in both electronic and print format. Follow up with each retail buyer at least three times. Schedule personal face-to-face meetings at the retail buyers office to establish a relationship and present our product catalog in-person, along with samples of the most popular products. Visit major industry events. Annual product conventions generally lead to the discovery of new products and new buyer leads. We will access buyers directories distributed at each event: International Housewares Show (March) New York International Gift Fair (January) Hong Kong Gifts and Housewares Fair (April) The company will maintain a budget for advertising, which will include:Print advertisements in industry publications. Catalog costs for printing and electronic formats. Travel budgets to support calling on each targeted retail buyer. Strategic AlliancesWe believe that our most important alliances are those we forge with our bank, our manufacturers, and our retail buyers. Cultivation of personal relationships with decision-makers within these organizations will position our company to meet our growth goals. Sales StrategyThe companys goal for the first year of operations is to place initial orders from thirty retail buyers. The average initial order is expected to generate revenue of $7,500 per order. We expect to write our first orders in our second month of operations. We assume a six-week lag from the day an order is written to when we receive payment. From these assumptions, we are forecasting initial orders in our first year of sales as: 30 x $7,500 = $225,000 initial order profitWe expect half of these orders to result in reorders beginning in the second half of the year, resulting in the following assumption: 15 x $7,500 = $125,500 Reorder ProfitFrom these assumptions, we are projecting initial first year sales revenue of $350,500. Our sales and marketing goals identify doubling our retail orders through our third year, resulting in sales of $701,000 in our second year and $1,402,000 in our third year. The following Sales Forecast represents our first three years of Sales and Cost of Sales. Direct Cost of Sales is tabulated as 60% of the product sales value, in correlation to our 40% margin. A detail of our first twelve months of sales is provided in the appendix of the business plan. Table: Sales ForecastSales Forecast200520062007SalesInitial Orders$225,000$450,000$900,000Reorders$125,500$251,000$502,000Total Sales$350,500$701,000$1,402,000Direct Cost of SalesInitial Orders$135,000$270,000$540,000Reorders$75,300$150,600$301,200Subtotal Direct Cost of Sales$210,300$420,600$841,200Management SummaryThe company is founded by two individuals who have over ten years of combined experience importing products from Asia and selling to retail buyers in the US and Canada. Additional management expertise will be provided by import/export consultants, a corporate attorney, and an accountant specializing in import and retail. Management TeamThe company is organized by focusing on the three major areas of sourcing, marketing, and administration. The two owners will divide responsibilities between sourcing and marketing. Administration will be handled by an administrative assistant who will manage the office while the two owners spend the majority of their time on the road, cul tivating the companys relationships with manufacturers and retail buyers. Owner #1 is well-versed in negotiating in China and will be responsible for identifying and developing relationships with housewares manufacturers in China. He will additionally be responsible for overseeing the logistics of each order. Owner #2 will be responsible for developing relationships with retail buyers in the US and Canada. A large percentage of her time will be spent making in-person sales calls and traveling to industry trade events. Personnel PlanThe following table outlines the companys personnel objectives. Initially, only the companys administrative assistant will be considered an employee. Both owners will take a distribution of the profits rather than drawing a salary. The owners anticipate taking dividends of $11,000 each in the first year, increasing to $40,000 each in the second year and $100,000 each in the third year. Additional staff will be added in subsequent years, determined by the companys cash flow and personnel requirements. Financial PlanAs a start-up company, we anticipate growth through favorable financing options and cash flow. All sales contracts will be written to minimize our risk by negotiating for favorable credit terms, including Letters of Credit. All transactions will be in US dollars to avoid any foreign exchange risk. The company assumes a 45-day collection period for all billables, reflecting the time required to manufacturer and ship the products to the US. The Import Export Company expects to utilize financing to cover these collection periods. Financing will also allow the company to avoid unnecessary risk and increase working capital. For the purpose of estimating our cash flow, we are forecasting 50% of our sales will be on credit. We will consult with our accountant to ascertain a specific tax rate. For the purpose of estimating, we have set our tax rate at 20%. We do not forecast collecting sales tax, as our purchases are for resale and not subject to sales or use taxes. We will work closely with our bank, which was selected because of its import and export programs. Initially, we will pursue secured financing options, with the bank advancing funds by using the goods we import as collateral. If we default on our secure financing obligations, the bank takes title of our shipped goods. As we are a start-up company, we will not qualify for unsecured financing until we have established a positive credit record with our bank. We may pursue a revolving line of credit through the Small Business Administrations Special Purpose loan programs for exporters, which would allow us to receive pre-export financing through the U.S. Export Import Bank. We may also pursue factoring options. As a start-up, we are primarily focused on maintaining a positive cash flow position. For this reason, a factor that buys receivables with a cash advance in exchange for a 5% fee may be a viable option. We feel that our target profit margin of 40% provides leeway to work with facto rs.