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SWOT Analysis分析-张家口茶叶市场计划

时间:2016-06-03 10:16:22 来源:www.ukthesis.org 作者:英国论文网 点击联系客服: 客服:Damien
Marketing Plan营销计划
SWOT AnalysisSWOT分析
 
在这部分中,SWOT分析已经被用来帮助企业评估的优势,劣势,机会和威胁的各种处境。
张家口的人口是653000人,一个古文化街半径5英里范围内则有70000个人生活。这70000个人中,有38%个或26600个人中,年龄都是在26岁至50岁之间--作为我们的目标年龄的对象。鉴于我们的高档茶的选择,基于当地的收入水平张家口的人口普查数据,我们估计3 / 4的人已存在品牌忠诚或经济条件的约束,会阻止他们访问我们的茶馆。例如,最著名的茶叶零售店是张沂源垄断多年的茶叶零售市场。我们当地的目标市场大概有7000人。然而,有超过10000名学生从初中和一所高中附近的街道中。这是目标群体是针对荷兰甜点。基于旅游产业形成张家口旅游管理的研究,在本市的国内和国际旅游市场与旅游经济的迅速发展日益增多。2013从一月到十月,张家口接待国内和国际游客超过2330万3700,以32.31%的同比增速;此外,旅游收入与¥156亿3200万,同比增长46.78%。特别是,在十月,有232万是7000名来自国内外的游客,随着逐年增长,旅游收入22%¥15亿5800万,与同比增长35.52%。In this section, the SWOT analysis has been employed to help business to evaluate the strengths, weaknesses, opportunities and threats involved in Sweet & Bitter. SWOT analysis is a marketing method for structured planning for businesses. The goal of Sweet & Bitter is to provide the finest premium tea and pastries at an accessible and affordable price to satisfy middle to upper-middle income residents and tourists of the Ancient Culture Street in a relaxed and quiet atmosphere. 
 
The population of Zhang Jiakou is 653,000, with 70,000 living within a 5 mile radius of Ancient Cultural Street. Of these 70,000 people, 38%, or 26,600, are between the ages of 26 and 50 - our target age group of tea. Given our upscale tea selection, and based on Zhang Jiakou census data for local income levels, we estimate that 3/4 of these people have pre-existing brand loyalties or economic constraints that would discourage them from visiting our tea house. For instance, the most famous tea retail shop is Zhang Yiyuan which monopolizes the tea retail market for years. Our local target market could be roughly 7,000 people. However, there are more than 10,000 students from two junior high schools and one senior high school near the street. This is the target group of Dutch desserts. Based on the study of tourist industry form Zhang Jiakou Tourist Administration, the domestic and international tourism markets in this city are rising day by day, and the tourism economy is rapid developing. From January to October in 2013, Zhang Jiakou received domestic and international tourists over 23.3037 million, with year on year growth 32.31%; besides, the tourism revenue was ¥15.632 billion, with 46.78% of year on year growth. Especially, in October, there were 2.327 million tourists from home and abroad, with 22% of year on year growth and the tourism revenue was¥1.558 billion, with 35.52% of year on year growth.#p#分页标题#e#
 
Strength 
 
Chinese are believed to have enjoyed tea drinking for more than 4,000 years, and have formed the Chinese tea culture. Meanwhile, tea is helpful to physical fitness. 8 kinds of loose tea will be offered, including white tea, Oolong tea, red tea, black tea, green tea, fruit tea and flower tea. Tea will be served hot and iced; high quality loose tea is prepared for the locals. Also, Sweet&Bitter will offer daily Dutch pastries in order to accompany tea orders. Compare to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Moreover, Tea sets are important for Chinese tea culture showing the art and technique of tea, which mainly includes teacups, a tea board, warm pitcher, tea wash, a tea clip and a tea spoon. There are different materials of the tea sets, according to the characteristics of customers’ demand, bamboo tea sets, vitreous tea sets and white porcelain tea sets will be provided only. As souvenirs, limited price and easy to carry are the most considerable items. Added to this, Sweet & Bitter will offer a selection of pre-made gift baskets within pastries and teas based on different festivals, furthermore creative design gifts tend to satisfy students’ demand.
 
Weakness
 
It has been indicated that Zhang Yiyuan is the most famous tea house in Zhang Jiakou, they have built up strong brand loyalty and have a large number of loyalty customers as well. As a result, Zhang Yiyuan has taken most of the market share in Zhang Jiakou, it would be harder for new entrants in the tea house market to attract customers. As a new brand in Zhang Jiakou, it has been indicated that the brand name and brand loyalty of Sweet & Bitter is weak and it needs time to build up. 
 
Opportunity & Threat
 
The tea house is a highly competitive market in Zhang Jiakou. Zhang Yiyuan is the tea house who dominated the tea house market in Zhang Jiakou. As a famous local tea house, it has large competitive advantages in the market (Gardner, J.C. & McGowan,Carl B.,Jr, 2010). The requirement of the entrant to the tea house markets is relatively low.  It has been shown by evidence that tea house serves major portion in the non-alcoholic beverage market in Zhang Jiakou. More importantly, in Zhang Jiakou, Zhang Yiyuan has offered their promote their tea house largely on TV and local news paper. Even though the tea house market seems like very flourish, the quality concerns about tea in Zhang Jiakou is still a major barrier for tea house in Zhang Jiakou. In order to face the threat and take the opportunities in the tea houses in Zhang Jiakou, it is very crucial for Sweet & Bitter to capitalize on the market. Price strategy and marketing strategy are very important for the new tea house to be success in the industry.#p#分页标题#e#
 
Strengths 
Variety tea options for customers
Daily Dutch pastries
Personalized tea sets
Gift baskets Weakness
Low brand loyalty
Low product differentiation
Opportunities
High demand in local market
Large annual sales Threats
Threat of substitutes
Threat of consumers switching to other products
 
 
Market Strategy
As a newly started tea house, it is very important for it to establish competitive advantage over other tea houses. Also, the ability to successfully differentiate new products with existing products is very crucial. The degree of competition is high in the drink shops is monopolistic. In order to face the threats from large franchised drink shops, appropriate price strategy and cost strategy should be employed (Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009).
Firstly, in the drink shop market in Zhang Jiakou, buyers have power over suppliers as they identify tea houses by their brand name and they are less likely to be price sensitive. Brand loyalty for customers is very special, for example, the loyal customer for Zhang Yiyuan (the most famous local tea house) can taste the difference between Zhang Yiyuan and other tea house. More importantly, tea can be seen as normal goods in Zhang Jiakou, the price is almost the same among different brands. The buyers have dominated power in the market as they have brand preferences. Also, the consumers for tea and Dutch pastries are mainly tea houses. Added to this, it should be acknowledged that the threat of substitutes in the soft drink industry is relatively high as the fixed cost for starting a tea house is cheap (Calef, R.H. 1992). As a result, the barriers to entry the industry is lower for new entrants. On the other hands, the power of supplier is not as substantial as buyers, as the majority of inputs are normal commodities.
 
Position Strategy
More importantly, for customers who do not have brand loyalty or brand preference, they will select the tea house with the most competitive,most reasonable price along with the best environment. Added to this, it should be noted that there have been many other substitutes in the market as well, such as coffee, soft drinks and other non-carbonated drinks in the market. The price strategy should be used carefully to avoid loss in sales.#p#分页标题#e#
 
Moreover, the tea and Dutch pastries of Sweet & Bitter tea house are designed to be expensive and luxury products in the market with great flavor and taste as those favorite and popular products. As the tea house market in Zhang Jiakou is highly concentrated, the top two players yield 70.5% of the total sales.  In order to make the products more valuable to customers, the package of the gift sets and design for the tea house may be luxury as it will make the tea house more luxury and special compare to other tea houses in Zhang Jiakou.
 
The Opportunity Matrix (Ansoff, H,. 1957)
Existing Products New Products
Existing Markets Division I Division III
New Markets Division II Division IV
 
From above opportunity matrix table, it has been shown that the new tea house to the market is aimed to attracting new customers from people who do not drink tea and who do not eat Dutch pastries before and take customers from the existing market as well (Davie, P. 1995).
 
Points of differentiation
Sweet & Bitter will offer daily Dutch pastries in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Sweet & Bitter will offer daily Dutch pastries  in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers.
 
Moreover, Sweeter & Bitter has employed the USP theory which is the Unique Selling Proposition. It is introduced by Rosser Reeves (1953) in last 50s. By USP theory, it means that it is very essential for Sweet & Bitter to promote their special functions of products for consumers. Therefore, for Tea provide in Sweet & Bitter, all of the tea are selected carefully to ensure the quality. More importantly, the Dutch pastries are made by import ingredients and the receipts. As a result, the high quality of the tea and the authentic of Dutch pastries would help Sweet & Bitter different from other tea houses in Zhang Jiakou.
 
Pricing Strategy
Depending on pricing regulation of Price Bureau of Zhang Jiakou together with the cost and market, Sweet & Bitter, price is the most important factor for marketing new products. It should be acknowledged that no matter at what content consumers prefer the products, they would always make buy decision according to their purchasing ability. Currently, it has been shown that the purchasing power of Chinese residents havehas become stronger and stronger. Therefore, the pricing strategy for Sweet & Bitter is high pricing strategy. The average price for Tea in Zhang Jiakou is at ¥50-100 per pot. For our tea, we set price at range of ¥40-200. By using this pricing strategy, the price range for the products in Sweet & Bitter has included lower price products which are lower than other tea houses and higher price products which are higher than other tea houses. As a result, consumers in all range can be satisfied according to their purchasing power. And more importantly, no matter which product consumers purchase, they will receive the same quality service.  #p#分页标题#e#
 
Sales process and promotion mix
The promotion for the new products in the market will contribute heavily as well. Since the tea house market is very competitive in Zhang Jiakou market, Sweet & Bitter tea house should stimulate sales through a series of incentive marketing techniques. Specifically, the promotion for consumers in different locations such as convenience store and supermarket is a good choice. Cash-back for a specific amount consumed and etc. Also, bundling sale is a good promotion strategy as well for new products in the market. Together with all tea and Dutch pastries products available, Sweet & Bitter can sell a bundle at a good price for their consumers (Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012). 
 
Through effective promotion strategy, the products information can be delivered to consumers in order to stimulate their purchasing willingness. As a result, the market wouldcould be expanded. It has been indicated that advertisements have played a role of bridge between products and consumers. Traditionally, consumers know the products through advertisements firstly. Advertisement is the most often used promotion tools for most businesses.  Even though it is very expensive, aAdvertisements can bring information visually to customers; the coverage of advertisements is large as well. Therefore, Sweet & Bitter we would use Advertising (print, broadcast, Internet), Brochures & collateral materials, "Customer experience" enhancements and Directories as our main promotion strategies (as shown in the Table 4.3). 
 
 
Activity Appropriate Maybe Not Appropriate Top Priority?
Advertising (print, broadcast, Internet)
Alliances
Annual reports & reviews
Associations
Book and publication writing
Brochures & collateral materials #p#分页标题#e#
Customer advisory boards
"Customer experience" enhancements
Customer surveys
Direct mail
Directories
Event sponsorships & trade shows
Internet-based marketing
Newsletters
Promotional giveaways
Press relations campaign
Pricing strategies
Referral sources campaign
Seminars & public speaking
Signage (vehicle, office, roadside)
Trade shows
Yellow Pages TM
Website - unique domain/development
Table 4.3
 
Compare the local cost for advertising to the budget of Sweet & Bitter, the estimated costs for the top priority marketing techniques from the above list have been shown in the following Table 4.4. It has been indicated that the estimated cost for Advertising (print, broadcast and Internet) is €¥3,500, for Brochures & collateral materials is €¥2,000, for 'Customer experience' enhancements is €¥1,000 and for Directories is €¥1,500. All of the staffs relates to marketing techniques for Sweet & Bitter tea house is managed by Henry, the store manager. #p#分页标题#e#
Top Priority Marketing Techniques
(from above list) Steps needed to implement Estimated Costs Timing / Deadlines Person Responsible 
1.Advertising (print,broadcast, Internet) Design advertisements and contact printer companies €RMB 3500 December Henry
2.Brochures & collateral materials Contact printer companies €RMB 2000 December Henry
3."Customer experience" enhancements Build online board for customer communication € RMB 1000 December Henry
4.Directories Contact city community €RMB 1500 December Henry
Table 4.4
Chapter 5 Financial analysis (I have not collected enough exact data to finish the following statement yet)
5.1 Start up Expenses 
Total Start-Up Cash Needed
Sweet &Bitter is a new company and the equipment account for a large part in our beginning needs. And our financing will come from two partners’ capital and a short period loan. Long-term assets, short-term assets and other suppliers are initial budget as followed. 
Equipment for pastry:
Double layer within four single controlling sets oven (RQL-Y-2)         €4998RMB625
Waffle maker (UWB-2)
€800RMB100
Blender for eggs, flour and cream (HM-980)
€900RMB112.5 
Refrigerators double-door (GD1.0L4S)
€9757800RMB
Others
€3753000RMB
Tea equipments
Tea racks
€17000RMB2125
Hot water and steam machine 
€7506000RMB
Dishwasher 
€9757800RMB
#p#分页标题#e#
Coffee maker
€722.55780RMB
Other appliances
€3753000RMB
Iced shaker
€162.51300RMB
Furniture
About €40,000RMB5000
Expensed supplies €1000RMB125
Napkins, stirrers, cleaning supplies, tasting cups 
5.2 Assumptions sheet 
Total Startup Cash Needed (to Make First Sale)
Capital Investments Amount(€RMB)
 
Property(rental for half year) 42,0005,250
Furniture and fixtures 99,40012,425
Computer and music equipment 8,0001,000
Other equipment 10,0001,250
159,40019,925
 
Operating Expenses Amount
Legal, accounting, and professional services 10,0001,250
Advertising and promotions 8,0001,000
Licenses and permits 30,000d3,750*0.08% *24
Prepaid insurance 2,000250
Salary and wages 62550,000
Tools and supplies 2,000250
Starting inventory 8,0001,000
Cash (working capital) 3,000375
Other expense 1 10,0001,250
Other expense 2 1,25010,000
Total Startup Cash Needed = 260,40032,550
Table 5.2
Total Startup Cash Needed (to Make First Sale) for Sweet & Bitter has been shown in the Table 5.2. All the numbers are projected in order to make the Startup cash table. The real numbers may be varied from the table when implement the plan. 
 
Pro forma financial statements 
The projected annual sales based on the current economic environment in Zhang Jiakou have been shown in the following Table 5.3 for the first three years. It has been shown that according to Table 5.3, the annual sales for all kind of products would increase from year to year as more and more consumers would choose to try Sweet & Bitter. #p#分页标题#e#
Annual sales
Year 1 Year 2 Year 3
Sales
Hot Tea ¥52,400 ¥62,000 ¥66,000 
Iced Tea ¥22,400 ¥24,000 ¥25,500 
Dutch Pastries ¥14,400 ¥15,000 ¥16,000 
Tea Sets ¥3,000 ¥3,200 ¥3,400 
Gift Baskets ¥3,895 ¥4,000 ¥4,200 
Loose Teas ¥10,150 ¥10,920 ¥13,104 
Total Sales ¥194,245 ¥211,120 ¥228,204 
 
Annual sales
Year 1 Year 2 Year 3
Sales
Hot Tea €6,550 €7,750 €8,250
Iced Tea €2,800 €3,000 €3,188
Dutch Pastries €1,800 €1,875 #p#分页标题#e#€2,000
Tea Sets €375 €376 €377
Gift Baskets €487 €500 €525
Loose Teas €1,269 €1,365 €1,638
Total Sales €13,281 €14,866 €15,978
Units 11,068 12,388 13,315
 
Table 5.3
Based on Table 5.3, the income statement for Sweeter & Bitter has been shown in the following Table 5.3a:
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 8,000 3,000 5,500 5,600
> > + Purchases (direct materials) 10,000 20,000 20,000 20,000
> > + Production wages* 85,000 90,000 91,000 91,000 #p#分页标题#e#
. > . - Closing inventory 3,000 5,000 4,800 5,200
(Less) Cost of goods sold (COGS) 5,000 5,500 5,600 5,500
Gross profit (or income) 95,000 102,500 106,100 105,900 409,500
-
Expenses
Amortization expense 3,000 3,000 3,000 3,000 12,000
Advertising & marketing 2,000 2,000 2,000 2,000 8,000
Bad Debts 0 0 0 0 0
Insurance 500 500 500 500 2,000
Interest expense 500 500 500 500 2,000
#p#分页标题#e#
Maintenance 2,000 2,000 2,000 2,000 8,000
Management fees 1,000 1,000 1,000 1,000 4,000
Office expenses 1,000 1,000 1,000 1,000 4,000
Rent or mortgage interest 21,000 21,000 21,000 21,000 84,000
Salary - owner 5,000 10,000 10,000 15,000 40,000
Storage 3,000 3,000 3,000 3,000 12,000
Travel (other) 0 500 780 1080 2,360
Utilities 1,000 1,200 1,260 1,380 4,840
Vehicle expenses 1,000 1,000 #p#分页标题#e#1,000 1,000 4,000
Wages (staff) 12,500 12,500 12,500 12,500 50,000
Total expenses 53,500 59,200 59,540 64,960 237,200
Earning (or loss) before taxes 41,500 43,300 46,560 40,940 172,300
. . Less Income Taxes 8,300 8,660 9,312 8,188 34,060
Net Earnings (or loss) 33,200 34,640 37,248 32,752 137,840
 
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 1,000 375 688 700
> > + Purchases (direct materials) #p#分页标题#e#1,250 2,500 2,500 2,500
> > + Production wages* 10,625 11,250 11,375 11,375
. > . - Closing inventory 375 625 600 650
(Less) Cost of goods sold (COGS) 625 688 700 688
Gross profit (or income) 11,875 12,813 13,263 13,238 51,188
-
Expenses
Amortization expense 375 375 375 375 1,500
Advertising & marketing 250 250 250 250 1,000
Bad Debts 0 0 0 0 0
Insurance 62.5 #p#分页标题#e#62.5 62.5 62.5 250
Interest expense 62.5 62.5 62.5 62.5 250
Maintenance 250 250 250 250 1,000
Management fees 125 125 125 125 500
Office expenses 125 125 125 125 500
Rent or mortgage interest 2,625 2,625 2,625 2,625 10,500
Salary - owner 625 1,250 1,250 1,875 5,000
Storage 375 375 375 375 1,500
Travel (other) 0 62.5 97.5 135 295
Utilities #p#分页标题#e#125 150 158 173 605
Vehicle expenses 125 125 125 125 500
Wages (staff) 1,563 1,563 1,563 1,563 6,250
Total expenses 6,688 7,400 7,443 8,120 29,650
Earning (or loss) before taxes 5,188 5,413 5,820 5,118 21,538
. . Less Income Taxes 1,038 1,083 1,164 1,024 4,258
Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230
 
Table 5.3a
5.3.1 Opening Day Balance Sheet (beginning of the year) 
Table 5.3.1 has shown the opening day balance sheet (beginning of the year) based on the start up expense and assumption sheet for Sweet & Bitter. 
 
Assets Liabilities
Current Assets Current Liabilities #p#分页标题#e#
Cash in bank 50,000 Accounts payable 5,000
Accounts receivable 0 Short-term loans 0
Inventory 8,000 Other payments due in 12 months 10,000
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 18,000 Less ITC (deductables) (0)
Net amount payable or (refundable) 15,000
Total current liabilities 15,000
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000
Buildings 0 Mortgage 0
Less amortization 0 Total long-term liabilities 100,000
Net land & buildings 99,400
Total Liabilities (L) 115,000
Computer and music Equipment 8,000
Less amortization 0 #p#分页标题#e#Owners' Equity
Net equipment 8000 Investment 60,400
Retained Earnings 0
Other Equipment 10,000
Less amortization 0 Total owners' equity (E) 60,400
Net vehicles 10,000
Total Assets (A) 175,400 Total liabilities and equity (L+E) 175,400
 
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 6,250 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 2,250 Less ITC (deductables) 0
Net amount payable or (refundable) 1,875
Total current liabilities #p#分页标题#e#1,875
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500
Buildings 0 Mortgage 0
Less amortization 0 Total long-term liabilities 12,500
Net land & buildings 12,425
Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization 0 Owners' Equity
Net equipment 1000 Investment 7,550
Retained Earnings 0
Other Equipment 1,250
Less amortization 0 Total owners' equity (E) 7,550
Net vehicles 1,250
Total Assets (A) 21,925 Total liabilities and equity (L+E) 21,925
 
Table 5.3.1
 
5.3.2 Profit and Loss projection (12 months) 
 
Table 5.3.2 has shown the Profit and Loss projection for next 12 months based on the Performa statement and assumption sheet.
#p#分页标题#e#
 
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 1,000 375 688 700
> > + Purchases (direct materials) 1,250 2,500 2,500 2,500
> > + Production wages* 10,625 11,250 11,375 11,375
. > . - Closing inventory 375 625 600 650
(Less) Cost of goods sold (COGS) 625 688 700 688
Gross profit (or income) 11,875 12,813 13,263 13,238 51,188
-
Expenses
Amortization expense #p#分页标题#e#375 375 375 375 1,500
Advertising & marketing 250 250 250 250 1,000
Bad Debts 0 0 0 0 0
Insurance 62.5 62.5 62.5 62.5 250
Interest expense 62.5 62.5 62.5 62.5 250
Maintenance 250 250 250 250 1,000
Management fees 125 125 125 125 500
Office expenses 125 125 125 125 500
Rent or mortgage interest 2,625 2,625 2,625 2,625 #p#分页标题#e#10,500
Salary - owner 625 1,250 1,250 1,875 5,000
Storage 375 375 375 375 1,500
Travel (other) 0 62.5 97.5 135 295
Utilities 125 150 158 173 605
Vehicle expenses 125 125 125 125 500
Wages (staff) 1,563 1,563 1,563 1,563 6,250
Total expenses 6,688 7,400 7,443 8,120 29,650
Earning (or loss) before taxes 5,188 5,413 5,820 5,118 21,538
. . Less Income Taxes 1,038 1,083 #p#分页标题#e#1,164 1,024 4,258
Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230
 
Table 5.3.2
 
It has been shown that Sweet & Bitter has positive net earnings in the first quarter to the fourth quarter. And the net earnings have shown an increasing trend overall. In the first 12 months, it has been shown that the net earnings is €¥137,840. 
Cash flow (12 months) 
Cash Flow Statement for a Small Business
12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Receipts (Cash In)
Cash sales 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,838
Collections from accounts receivable 0 0 0 0 #p#分页标题#e#0 0 0 0 0 0 0 0
Owners' capital 0 0 0 0 0 0 0 0 0 0 0 0
Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 10,000,250
Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 0 0
Other cash received (specify) 0 0 0 0#p#分页标题#e# 0 0 0 0 0 0 0 0
Total Cash In 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,8385,088
 
Cash Disbursements (Cash Out)
Advertising & promotion expense 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67
Bank charges & interest 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67#p#分页标题#e# 166.67
Business licenses & permits 24 24 24 24 24 24 24 24 24 24 24 24
Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0
Equipment Payments 0 0 0 0 0 0 0 0 0 0 0 0
Government Remittances (taxes, VAT, etc) 0 0 0 0 0 0 0 0 0 #p#分页标题#e#0 0 0
Interest expense 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67
Insurance 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67
Loan/line of credit payments 0 0 0 0 0 0 0 0 0 0 0 10,000
Management salaries (owners draw) 1,000 1,000 3,000 3,000 3,000 4,000 #p#分页标题#e#3,500 3,500 3,000 5,000 5,000 5,000
Office supplies & expenses 400 400 200 300 300 400 450 250 300 350 350 300
Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250
Professional fees (accounting, legal) 1,000 1,000 1,000 1,000
Rent or mortgage payment 21,000 21,000 21,000 21,000
Repairs & Maintenance 300 300 300 300
Storage 3,000 #p#分页标题#e#3,000 3,000 3,000
Telephones/communications 500 500 500 500
Travel 0 580 780 1,080
Utilities 1,000 1,200 1,260 1,380
Vehicle expenses 1,000 1,000 1,000 1,000
Wages & salaries (staff) 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67
Total Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4 10357.4 38747.4 11957.4 11959.4 51167.4
 
Cash Flow Summary #p#分页标题#e#
Opening Balance 50,000 69,993 88,986
81,378
101,471
121,564
111,976
131,919
151,562
143,314
161,457
179,700
 
Add: Cash In 28,000 27,000 30,000 30,000 30,000 30,000 30,500 30,000 30,500 30,100 30,200 30,700
Subtract: Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4 10357.4 38747.4 11957.4 11959.4 51167.4
Closing cash balance - surplus or (deficit) 69,993 88,986
81,378
101,471
121,564
111,976
131,919
151,562
143,314
161,457
179,700
159,232
 
Cash Flow Statement for a Small Business
12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 #p#分页标题#e#Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Receipts (Cash In)
Cash sales 438 422 469 469 469 469 477 469 477 470 472 480
Collections from accounts receivable 0 0 0 0 0 0 0 0 0 0 0 0
Owners' capital 0 0 0 #p#分页标题#e#0 0 0 0 0 0 0 0 0
Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 1,250
Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 0 0
Other cash received (specify) 0 0 0 0 0 0 0 0 0 0 0 0
Total Cash In 438 422 469#p#分页标题#e# 469 469 469 477 469 477 470 472 1,730
 
Cash Disbursements (Cash Out)
Advertising & promotion expense 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375
Bank charges & interest #p#分页标题#e#20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375
Business licenses & permits 3 3 3 3 3 3 3 3 3 3 3 3
Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0
Equipment Payments 0 0 0 0 0 0 0 0 0 0 0 #p#分页标题#e#0
Government Remittances (taxes, VAT, etc) 0 0 0 0 0 0 0 0 0 0 0 0
Interest expense 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375
Insurance 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375
Loan/line of credit payments 0 0 0 0 0 0 0 0 #p#分页标题#e#0 0 0 1,250
Management salaries (owners draw) 125 125 375 375 375 500 438 438 375 625 625 625
Office supplies & expenses 50 50 25 37.5 37.5 50 56.25 31.25 37.5 43.75 43.75 37.5
Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250
Professional fees (accounting, legal) 125 #p#分页标题#e# 125 125 125
Rent or mortgage payment 1,250 1,250 1,250 1,250
Repairs & Maintenance 37.5 37.5 37.5 37.5
Storage 375 375 375 375
Telephones/communications 62.5 #p#分页标题#e# 62.5 62.5 62.5
Travel 0 72.5 97.5 135
Utilities 125 150 158 173
Vehicle expenses 125 125 125 125
Wages & salaries (staff) 520.8338 520.8338 #p#分页标题#e#520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338
Total Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669
 
Cash Flow Summary
Opening Balance #p#分页标题#e#6,250 8,749 11,123 10,172 12,684 15,196 13,997 16,490 18,945 17,914 20,182 22,463
 
Add: Cash In 438 422 469 469 469 469 477 469 477 470 472 480
Subtract: Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669
Closing cash balance - surplus or (deficit) 8,782 11,266 16,012 12,973 15,485 20,331 16,887 19,347 #p#分页标题#e#23,984 20,973 23,242 29,057
 
5.3.4 Projected balance sheet (end of year)
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 1,898,408 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 24,730 Less ITC (deductables) 0
  Net amount payable or (refundable) 1,875
  Total current liabilities 1,875
 
Fixed Assets Long-term Liabilities #p#分页标题#e#
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500
Buildings 0 Mortgage 0
Less amortization -1,250 Total long-term liabilities 12,500
Net land & buildings 11,175
  Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization -62.5 Owners' Equity
Net equipment 938 Investment 7,550
  Retained Earnings 17,230
Other Equipment 1,250
Less amortization -188 Total owners' equity (E) 24,780
Net vehicles 1,063
Total Assets (A) 39,155 Total liabilities and equity (L+E) #p#分页标题#e#39,155
   
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 1,898,408 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 24,730 Less ITC (deductables) 0
  Net amount payable or (refundable) 1,875
  Total current liabilities 1,875
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) #p#分页标题#e#12,500
Buildings 0 Mortgage 0
Less amortization -1,250 Total long-term liabilities 12,500
Net land & buildings 11,175
  Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization -62.5 Owners' Equity
Net equipment 938 Investment 7,550
  Retained Earnings 17,230
Other Equipment 1,250
Less amortization -188 Total owners' equity (E) 24,780
Net vehicles 1,063
Total Assets (A) 39,155 Total liabilities and equity (L+E) 39,155
Assets Liabilities
Current Assets Current Liabilities#p#分页标题#e#
Cash in bank 189,840 Accounts payable 5,000
Accounts receivable 0 Short-term loans 0
Inventory 8,000 Other payments due in 12 months 10,000
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 197,840 Less ITC (deductables) (0)
Net amount payable or (refundable) 15,000
Total current liabilities 15,000
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000
Buildings 0 Mortgage 0
Less amortization (10,000) Total long-term liabilities 100,000
Net land & buildings 89,400
Total Liabilities (L) 115,000
Computer and music Equipment 8,000
Less amortization #p#分页标题#e#(500) Owners' Equity
Net equipment 7,500 Investment 60,400
Retained Earnings 137,840
Other Equipment 10,000
Less amortization (1,500) Total owners' equity (E) 198,240
Net vehicles 8,500
Total Assets (A) 313,240 Total liabilities and equity (L+E) 313,240
 
 Ratio analysis 
Current Ratio = Current Assets / Current Liabilities = 197,84024,730/1,87515,000 = 13.19
Current ratio has been used to measure the liquidity of Sweet & Bitter. It has been shown that the current ratio for Sweet & Bitter is 13.19 which mean the liquidity of Sweet & Bitter is good. 
 
Debt - Equity Ratio = Total Liabilities / Shareholders' Equity = 14,37515,000/24,780198,240 = 0.580105
 
Debt - Equity ratio is the leverage ratio which is used to measure the relationship between obligations for suppliers, creditors, lenders and suppliers and what the shareholders have committed. 
 
Gross Profit Margin = Gross Profit / Net Sales = 137,840 / 409,500 = 33.66%
 
From the ratio analysis, it has been shown that Sweet & Bitter has the ability to repay their liabilities with good return for investors. 
5.5 Break Even Analysis 
In this part, the break even analysis has been used to measure the business performance of Sweet & Bitter. By using break even analysis, the break even point is in compare the dollar units to the revenue. It is useful to analyze the pricing strategy for Sweet & Bitter as well. 
Break-even analysis depends on the following variables: 
Selling price per unit: The amount of money charged to the customer for each unit of product or service.
#p#分页标题#e#Total fixed costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.
Variable unit cost: Costs that vary directly with the production of one additional unit. 
Total variable cost: The product of expected unit sales and variable unit cost, i.e. expected unit sales times the variable cost.
Each of these variables is interdependent on the break-even point analysis. If any of the variables changes, the results may change. 
Total Cost: The sum of the fixed cost and total variable cost for any given level of production, i.e., fixed cost plus total variable cost. 
Total Revenue: The product of forecasted unit sales and unit price, i.e., forecasted unit sales times unit price. 
Q = FC / (UP - VC)
where: 
Q = Break-even Point, i.e., Units of production (Q), 
FC = Fixed Costs 
VC = Variable Costs per Unit 
UP = Unit Price 
Therefore, 
Break-Even Point Q = Fixed Cost / (Unit Price - Variable Unit Cost) = 159,40019,92511,175 / (194,24524,280/50,000 -101,00012,625/50,000) =85,47328,471 units
Therefore, the break-even point quantity for Sweet & Bitter is 85,473 units. It means that Sweet & Bitter has to sell 85,474 units of products in order to reach the break even point. At this point, Sweet & Bitter would product a zero profit, but it can cover all the cost. It means that Sweet & Bitter would make profit as long as it can sell any units more than 85,47328,471 units. From the forecast sales, it has been shown that in the first three years, Sweet & Bitter can sell 36,771 units. It means that it cannot break even in the first three years. Therefore, the company should lower their costs or try to increase their sales in order to achieve the break even point. 
Units 11,068 12,388 13,315
Year 1 2 3
 
Implementation Plan & Timeline
 
Timescale For Workshop Project - SAMPLE
 
Task #/Name Person 
Responsible Month of Action for Task Assigned
Sept #p#分页标题#e#Oct Nov Dec
Finalize planning permission Joe X
Apply for loan Jane X
Finalize suppliers Susan X
Liase with local building inspector Henry X
Seek Builders Joe X
Tender Information Joe X
Supervise Builders Joe X
Plan shop and interior design Jane /Susan X
Marketing materials created and distributed Henry X
Chapter 4 Marketing Plan
4.1 SWOT Analysis
In this section, the SWOT analysis has been employed to help business to evaluate the strengths, weaknesses, opportunities and threats involved in Sweet & Bitter. SWOT analysis is a marketing method for structured planning for businesses. The goal of Sweet & Bitter is to provide the finest premium tea and pastries at an accessible and affordable price to satisfy middle to upper-middle income residents and tourists of the Ancient Culture Street in a relaxed and quiet atmosphere. 
 
The population of Zhang Jiakou is 653,000, with 70,000 living within a 5 mile radius of Ancient Cultural Street. Of these 70,000 people, 38%, or 26,600, are between the ages of 26 and 50 - our target age group of tea. Given our upscale tea selection, and based on Zhang Jiakou census data for local income levels, we estimate that 3/4 of these people have pre-existing brand loyalties or economic constraints that would discourage them from visiting our tea house. For instance, the most famous tea retail shop is Zhang Yiyuan which monopolizes the tea retail market for years. Our local target market could be roughly 7,000 people. However, there are more than 10,000 students from two junior high schools and one senior high school near the street. This is the target group of Dutch desserts. Based on the study of tourist industry form Zhang Jiakou Tourist Administration, the domestic and international tourism markets in this city are rising day by day, and the tourism economy is rapid developing. From January to October in 2013, Zhang Jiakou received domestic and international tourists over 23.3037 million, with year on year growth 32.31%; besides, the tourism revenue was ¥15.632 billion, with 46.78% of year on year growth. Especially, in October, there were 2.327 million tourists from home and abroad, with 22% of year on year growth and the tourism revenue was¥1.558 billion, with 35.52% of year on year growth.#p#分页标题#e#
 
Strength 
 
Chinese are believed to have enjoyed tea drinking for more than 4,000 years, and have formed the Chinese tea culture. Meanwhile, tea is helpful to physical fitness. 8 kinds of loose tea will be offered, including white tea, Oolong tea, red tea, black tea, green tea, fruit tea and flower tea. Tea will be served hot and iced; high quality loose tea is prepared for the locals. Also, Sweet&Bitter will offer daily Dutch pastries in order to accompany tea orders. Compare to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Moreover, Tea sets are important for Chinese tea culture showing the art and technique of tea, which mainly includes teacups, a tea board, warm pitcher, tea wash, a tea clip and a tea spoon. There are different materials of the tea sets, according to the characteristics of customers’ demand, bamboo tea sets, vitreous tea sets and white porcelain tea sets will be provided only. As souvenirs, limited price and easy to carry are the most considerable items. Added to this, Sweet & Bitter will offer a selection of pre-made gift baskets within pastries and teas based on different festivals, furthermore creative design gifts tend to satisfy students’ demand.
 
Weakness
 
It has been indicated that Zhang Yiyuan is the most famous tea house in Zhang Jiakou, they have built up strong brand loyalty and have a large number of loyalty customers as well. As a result, Zhang Yiyuan has taken most of the market share in Zhang Jiakou, it would be harder for new entrants in the tea house market to attract customers. As a new brand in Zhang Jiakou, it has been indicated that the brand name and brand loyalty of Sweet & Bitter is weak and it needs time to build up. 
 
Opportunity & Threat
 
The tea house is a highly competitive market in Zhang Jiakou. Zhang Yiyuan is the tea house who dominated the tea house market in Zhang Jiakou. As a famous local tea house, it has large competitive advantages in the market (Gardner, J.C. & McGowan,Carl B.,Jr, 2010). The requirement of the entrant to the tea house markets is relatively low.  It has been shown by evidence that tea house serves major portion in the non-alcoholic beverage market in Zhang Jiakou. More importantly, in Zhang Jiakou, Zhang Yiyuan has offered their promote their tea house largely on TV and local news paper. Even though the tea house market seems like very flourish, the quality concerns about tea in Zhang Jiakou is still a major barrier for tea house in Zhang Jiakou. In order to face the threat and take the opportunities in the tea houses in Zhang Jiakou, it is very crucial for Sweet & Bitter to capitalize on the market. Price strategy and marketing strategy are very important for the new tea house to be success in the industry.#p#分页标题#e#
 
Strengths 
Variety tea options for customers
Daily Dutch pastries
Personalized tea sets
Gift baskets Weakness
Low brand loyalty
Low product differentiation
Opportunities
High demand in local market
Large annual sales Threats
Threat of substitutes
Threat of consumers switching to other products
 
Market Strategy
As a newly started tea house, it is very important for it to establish competitive advantage over other tea houses. Also, the ability to successfully differentiate new products with existing products is very crucial. The degree of competition is high in the drink shops is monopolistic. In order to face the threats from large franchised drink shops, appropriate price strategy and cost strategy should be employed (Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009).
Firstly, in the drink shop market in Zhang Jiakou, buyers have power over suppliers as they identify tea houses by their brand name and they are less likely to be price sensitive. Brand loyalty for customers is very special, for example, the loyal customer for Zhang Yiyuan (the most famous local tea house) can taste the difference between Zhang Yiyuan and other tea house. More importantly, tea can be seen as normal goods in Zhang Jiakou, the price is almost the same among different brands. The buyers have dominated power in the market as they have brand preferences. Also, the consumers for tea and Dutch pastries are mainly tea houses. Added to this, it should be acknowledged that the threat of substitutes in the soft drink industry is relatively high as the fixed cost for starting a tea house is cheap (Calef, R.H. 1992). As a result, the barriers to entry the industry is lower for new entrants. On the other hands, the power of supplier is not as substantial as buyers, as the majority of inputs are normal commodities.
 
Position Strategy
More importantly, for customers who do not have brand loyalty or brand preference, they will select the tea house with the most competitive,most reasonable price along with the best environment. Added to this, it should be noted that there have been many other substitutes in the market as well, such as coffee, soft drinks and other non-carbonated drinks in the market. The price strategy should be used carefully to avoid loss in sales.#p#分页标题#e#
 
Moreover, the tea and Dutch pastries of Sweet & Bitter tea house are designed to be expensive and luxury products in the market with great flavor and taste as those favorite and popular products. As the tea house market in Zhang Jiakou is highly concentrated, the top two players yield 70.5% of the total sales.  In order to make the products more valuable to customers, the package of the gift sets and design for the tea house may be luxury as it will make the tea house more luxury and special compare to other tea houses in Zhang Jiakou.
 
The Opportunity Matrix (Ansoff, H,. 1957)
Existing Products New Products
Existing Markets Division I Division III
New Markets Division II Division IV
 
From above opportunity matrix table, it has been shown that the new tea house to the market is aimed to attracting new customers from people who do not drink tea and who do not eat Dutch pastries before and take customers from the existing market as well (Davie, P. 1995).
 
Points of differentiation
Sweet & Bitter will offer daily Dutch pastries in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers. Sweet & Bitter will offer daily Dutch pastries  in order to accompany tea orders. Compared to other tea houses in Zhang Jiakou, it is the main strength of Sweet & Bitter as other tea houses do not provide Dutch pastries to their customers.
 
Moreover, Sweeter & Bitter has employed the USP theory which is the Unique Selling Proposition. It is introduced by Rosser Reeves (1953) in last 50s. By USP theory, it means that it is very essential for Sweet & Bitter to promote their special functions of products for consumers. Therefore, for Tea provide in Sweet & Bitter, all of the tea are selected carefully to ensure the quality. More importantly, the Dutch pastries are made by import ingredients and the receipts. As a result, the high quality of the tea and the authentic of Dutch pastries would help Sweet & Bitter different from other tea houses in Zhang Jiakou.
 
Pricing Strategy
Depending on pricing regulation of Price Bureau of Zhang Jiakou together with the cost and market, Sweet & Bitter, price is the most important factor for marketing new products. It should be acknowledged that no matter at what content consumers prefer the products, they would always make buy decision according to their purchasing ability. Currently, it has been shown that the purchasing power of Chinese residents havehas become stronger and stronger. Therefore, the pricing strategy for Sweet & Bitter is high pricing strategy. The average price for Tea in Zhang Jiakou is at ¥50-100 per pot. For our tea, we set price at range of ¥40-200. By using this pricing strategy, the price range for the products in Sweet & Bitter has included lower price products which are lower than other tea houses and higher price products which are higher than other tea houses. As a result, consumers in all range can be satisfied according to their purchasing power. And more importantly, no matter which product consumers purchase, they will receive the same quality service.  #p#分页标题#e#
Sales process and promotion mix
The promotion for the new products in the market will contribute heavily as well. Since the tea house market is very competitive in Zhang Jiakou market, Sweet & Bitter tea house should stimulate sales through a series of incentive marketing techniques. Specifically, the promotion for consumers in different locations such as convenience store and supermarket is a good choice. Cash-back for a specific amount consumed and etc. Also, bundling sale is a good promotion strategy as well for new products in the market. Together with all tea and Dutch pastries products available, Sweet & Bitter can sell a bundle at a good price for their consumers (Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012). 
 
Through effective promotion strategy, the products information can be delivered to consumers in order to stimulate their purchasing willingness. As a result, the market wouldcould be expanded. It has been indicated that advertisements have played a role of bridge between products and consumers. Traditionally, consumers know the products through advertisements firstly. Advertisement is the most often used promotion tools for most businesses.  Even though it is very expensive, aAdvertisements can bring information visually to customers; the coverage of advertisements is large as well. Therefore, Sweet & Bitter we would use Advertising (print, broadcast, Internet), Brochures & collateral materials, "Customer experience" enhancements and Directories as our main promotion strategies (as shown in the Table 4.3). 
 
Activity Appropriate Maybe Not Appropriate Top Priority?
Advertising (print, broadcast, Internet)
Alliances
Annual reports & reviews
Associations
Book and publication writing
Brochures & collateral materials
Customer advisory boards#p#分页标题#e#
"Customer experience" enhancements
Customer surveys
Direct mail
Directories
Event sponsorships & trade shows
Internet-based marketing
Newsletters
Promotional giveaways
Press relations campaign
Pricing strategies
Referral sources campaign
Seminars & public speaking
Signage (vehicle, office, roadside)
Trade shows
Yellow Pages TM
Website - unique domain/development
Table 4.3
 
Compare the local cost for advertising to the budget of Sweet & Bitter, the estimated costs for the top priority marketing techniques from the above list have been shown in the following Table 4.4. It has been indicated that the estimated cost for Advertising (print, broadcast and Internet) is €¥3,500, for Brochures & collateral materials is €¥2,000, for 'Customer experience' enhancements is €¥1,000 and for Directories is €¥1,500. All of the staffs relates to marketing techniques for Sweet & Bitter tea house is managed by Henry, the store manager. #p#分页标题#e#
Top Priority Marketing Techniques
(from above list) Steps needed to implement Estimated Costs Timing / Deadlines Person Responsible 
1.Advertising (print,broadcast, Internet) Design advertisements and contact printer companies €RMB 3500 December Henry
2.Brochures & collateral materials Contact printer companies €RMB 2000 December Henry
3."Customer experience" enhancements Build online board for customer communication € RMB 1000 December Henry
4.Directories Contact city community €RMB 1500 December Henry
Table 4.4
Chapter 5 Financial analysis (I have not collected enough exact data to finish the following statement yet)
5.1 Start up Expenses 
Total Start-Up Cash Needed
Sweet &Bitter is a new company and the equipment account for a large part in our beginning needs. And our financing will come from two partners’ capital and a short period loan. Long-term assets, short-term assets and other suppliers are initial budget as followed. 
Equipment for pastry:
Double layer within four single controlling sets oven (RQL-Y-2)         €4998RMB625
Waffle maker (UWB-2)
€800RMB100
Blender for eggs, flour and cream (HM-980)
€900RMB112.5 
Refrigerators double-door (GD1.0L4S)
€9757800RMB
Others
€3753000RMB
Tea equipments
Tea racks
€17000RMB2125
Hot water and steam machine 
€7506000RMB
Dishwasher #p#分页标题#e#
€9757800RMB
Coffee maker
€722.55780RMB
Other appliances
€3753000RMB
Iced shaker
€162.51300RMB
Furniture
About €40,000RMB5000
Expensed supplies €1000RMB125
Napkins, stirrers, cleaning supplies, tasting cups 
5.2 Assumptions sheet 
Total Startup Cash Needed (to Make First Sale)
Capital Investments Amount(€RMB)
 
Property(rental for half year) 42,0005,250
Furniture and fixtures 99,40012,425
Computer and music equipment 8,0001,000
Other equipment 10,0001,250
159,40019,925
 
Operating Expenses Amount
Legal, accounting, and professional services 10,0001,250
Advertising and promotions 8,0001,000
Licenses and permits 30,000d3,750*0.08% *24
Prepaid insurance 2,000250
Salary and wages 62550,000
Tools and supplies 2,000250
Starting inventory 8,0001,000
Cash (working capital) 3,000375
Other expense 1 10,0001,250
Other expense 2 1,25010,000
Total Startup Cash Needed = 260,40032,550
Table 5.2
Total Startup Cash Needed (to Make First Sale) for Sweet & Bitter has been shown in the Table 5.2. All the numbers are projected in order to make the Startup cash table. The real numbers may be varied from the table when implement the plan. 
 
Pro forma financial statements 
The projected annual sales based on the current economic environment in Zhang Jiakou have been shown in the following Table 5.3 for the first three years. It has been shown that according to Table 5.3, the annual sales for all kind of products would increase from year to year as more and more consumers would choose to try Sweet & Bitter. #p#分页标题#e#
Annual sales
Year 1 Year 2 Year 3
Sales
Hot Tea ¥52,400 ¥62,000 ¥66,000 
Iced Tea ¥22,400 ¥24,000 ¥25,500 
Dutch Pastries ¥14,400 ¥15,000 ¥16,000 
Tea Sets ¥3,000 ¥3,200 ¥3,400 
Gift Baskets ¥3,895 ¥4,000 ¥4,200 
Loose Teas ¥10,150 ¥10,920 ¥13,104 
Total Sales ¥194,245 ¥211,120 ¥228,204 
 
Annual sales
Year 1 Year 2 Year 3
Sales
Hot Tea €6,550 €7,750 €8,250
Iced Tea €2,800 €3,000 €3,188
Dutch Pastries €1,800 €1,875 #p#分页标题#e#€2,000
Tea Sets €375 €376 €377
Gift Baskets €487 €500 €525
Loose Teas €1,269 €1,365 €1,638
Total Sales €13,281 €14,866 €15,978
Units 11,068 12,388 13,315
 
Table 5.3
Based on Table 5.3, the income statement for Sweeter & Bitter has been shown in the following Table 5.3a:
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 8,000 3,000 5,500 5,600
> > + Purchases (direct materials) 10,000 20,000 20,000 20,000
> > + Production wages* 85,000 90,000 91,000 91,000 #p#分页标题#e#
. > . - Closing inventory 3,000 5,000 4,800 5,200
(Less) Cost of goods sold (COGS) 5,000 5,500 5,600 5,500
Gross profit (or income) 95,000 102,500 106,100 105,900 409,500
-
Expenses
Amortization expense 3,000 3,000 3,000 3,000 12,000
Advertising & marketing 2,000 2,000 2,000 2,000 8,000
Bad Debts 0 0 0 0 0
Insurance 500 500 500 500 2,000
Interest expense 500 500 500 500 #p#分页标题#e#2,000
Maintenance 2,000 2,000 2,000 2,000 8,000
Management fees 1,000 1,000 1,000 1,000 4,000
Office expenses 1,000 1,000 1,000 1,000 4,000
Rent or mortgage interest 21,000 21,000 21,000 21,000 84,000
Salary - owner 5,000 10,000 10,000 15,000 40,000
Storage 3,000 3,000 3,000 3,000 12,000
Travel (other) 0 500 780 1080 2,360
Utilities 1,000 1,200 1,260 1,380 4,840
Vehicle expenses 1,000 1,000#p#分页标题#e# 1,000 1,000 4,000
Wages (staff) 12,500 12,500 12,500 12,500 50,000
Total expenses 53,500 59,200 59,540 64,960 237,200
Earning (or loss) before taxes 41,500 43,300 46,560 40,940 172,300
. . Less Income Taxes 8,300 8,660 9,312 8,188 34,060
Net Earnings (or loss) 33,200 34,640 37,248 32,752 137,840
 
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 1,000 375 688 700
> > + Purchases (direct materials)#p#分页标题#e# 1,250 2,500 2,500 2,500
> > + Production wages* 10,625 11,250 11,375 11,375
. > . - Closing inventory 375 625 600 650
(Less) Cost of goods sold (COGS) 625 688 700 688
Gross profit (or income) 11,875 12,813 13,263 13,238 51,188
-
Expenses
Amortization expense 375 375 375 375 1,500
Advertising & marketing 250 250 250 250 1,000
Bad Debts 0 0 0 0 0
Insurance #p#分页标题#e#62.5 62.5 62.5 62.5 250
Interest expense 62.5 62.5 62.5 62.5 250
Maintenance 250 250 250 250 1,000
Management fees 125 125 125 125 500
Office expenses 125 125 125 125 500
Rent or mortgage interest 2,625 2,625 2,625 2,625 10,500
Salary - owner 625 1,250 1,250 1,875 5,000
Storage 375 375 375 375 1,500
Travel (other) 0 62.5 97.5 135 #p#分页标题#e#295
Utilities 125 150 158 173 605
Vehicle expenses 125 125 125 125 500
Wages (staff) 1,563 1,563 1,563 1,563 6,250
Total expenses 6,688 7,400 7,443 8,120 29,650
Earning (or loss) before taxes 5,188 5,413 5,820 5,118 21,538
. . Less Income Taxes 1,038 1,083 1,164 1,024 4,258
Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230
 
Table 5.3a
5.3.1 Opening Day Balance Sheet (beginning of the year) 
Table 5.3.1 has shown the opening day balance sheet (beginning of the year) based on the start up expense and assumption sheet for Sweet & Bitter. 
 
Assets Liabilities
Current Assets#p#分页标题#e# Current Liabilities
Cash in bank 50,000 Accounts payable 5,000
Accounts receivable 0 Short-term loans 0
Inventory 8,000 Other payments due in 12 months 10,000
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 18,000 Less ITC (deductables) (0)
Net amount payable or (refundable) 15,000
Total current liabilities 15,000
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000
Buildings 0 Mortgage 0
Less amortization 0 Total long-term liabilities 100,000
Net land & buildings 99,400
Total Liabilities (L) 115,000
Computer and music Equipment 8,000 #p#分页标题#e#
Less amortization 0 Owners' Equity
Net equipment 8000 Investment 60,400
Retained Earnings 0
Other Equipment 10,000
Less amortization 0 Total owners' equity (E) 60,400
Net vehicles 10,000
Total Assets (A) 175,400 Total liabilities and equity (L+E) 175,400
 
 
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 6,250 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 2,250 Less ITC (deductables) #p#分页标题#e#0
Net amount payable or (refundable) 1,875
Total current liabilities 1,875
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500
Buildings 0 Mortgage 0
Less amortization 0 Total long-term liabilities 12,500
Net land & buildings 12,425
Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization 0 Owners' Equity
Net equipment 1000 Investment 7,550
Retained Earnings 0
Other Equipment 1,250
Less amortization 0 Total owners' equity (E) 7,550
Net vehicles 1,250
Total Assets (A) 21,925 Total liabilities and equity (L+E) 21,925
 
Table 5.3.1
#p#分页标题#e#
 
5.3.2 Profit and Loss projection (12 months) 
 
Table 5.3.2 has shown the Profit and Loss projection for next 12 months based on the Performa statement and assumption sheet.
 
Income Statement for a Sweeter & Bitter as year of Dec. 31, 2015
Time Period - Projected or Actual 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full 
Year
Sales
> >Opening inventory 1,000 375 688 700
> > + Purchases (direct materials) 1,250 2,500 2,500 2,500
> > + Production wages* 10,625 11,250 11,375 11,375
. > . - Closing inventory 375 625 600 650
(Less) Cost of goods sold (COGS) 625 688 700 688
Gross profit (or income) 11,875 12,813 13,263 13,238 #p#分页标题#e#51,188
-
Expenses
Amortization expense 375 375 375 375 1,500
Advertising & marketing 250 250 250 250 1,000
Bad Debts 0 0 0 0 0
Insurance 62.5 62.5 62.5 62.5 250
Interest expense 62.5 62.5 62.5 62.5 250
Maintenance 250 250 250 250 1,000
Management fees 125 125 125 125 500
Office expenses 125 125 125 125 500
Rent or mortgage interest #p#分页标题#e#2,625 2,625 2,625 2,625 10,500
Salary - owner 625 1,250 1,250 1,875 5,000
Storage 375 375 375 375 1,500
Travel (other) 0 62.5 97.5 135 295
Utilities 125 150 158 173 605
Vehicle expenses 125 125 125 125 500
Wages (staff) 1,563 1,563 1,563 1,563 6,250
Total expenses 6,688 7,400 7,443 8,120 29,650
Earning (or loss) before taxes 5,188 5,413 5,820 5,118#p#分页标题#e# 21,538
. . Less Income Taxes 1,038 1,083 1,164 1,024 4,258
Net Earnings (or loss) 4,150 4,330 4,656 4,094 17,230
 
Table 5.3.2
 
It has been shown that Sweet & Bitter has positive net earnings in the first quarter to the fourth quarter. And the net earnings have shown an increasing trend overall. In the first 12 months, it has been shown that the net earnings is €¥137,840. 
 
Cash flow (12 months) 
Cash Flow Statement for a Small Business
12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Receipts (Cash In)
Cash sales 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,838#p#分页标题#e#
Collections from accounts receivable 0 0 0 0 0 0 0 0 0 0 0 0
Owners' capital 0 0 0 0 0 0 0 0 0 0 0 0
Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 10,000,250
Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 #p#分页标题#e#0 0
Other cash received (specify) 0 0 0 0 0 0 0 0 0 0 0 0
Total Cash In 3,500 3,375 3,750 3,750 3,750 3,750 3,813 3,750 3,813 3,763 3,775 3,8385,088
 
Cash Disbursements (Cash Out)
Advertising & promotion expense 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67 666.67
Bank charges & interest 166.67 166.67 166.67 166.67 166.67 #p#分页标题#e#166.67 166.67 166.67 166.67 166.67 166.67 166.67
Business licenses & permits 24 24 24 24 24 24 24 24 24 24 24 24
Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0
Equipment Payments 0 0 0 0 0 0 0 0 0 0 0 0
Government Remittances (taxes, VAT, etc) 0 0 0 #p#分页标题#e#0 0 0 0 0 0 0 0 0
Interest expense 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67
Insurance 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67 166.67
Loan/line of credit payments 0 0 0 0 0 0 0 0 0 0 0 10,000
Management salaries (owners draw) #p#分页标题#e#1,000 1,000 3,000 3,000 3,000 4,000 3,500 3,500 3,000 5,000 5,000 5,000
Office supplies & expenses 400 400 200 300 300 400 450 250 300 350 350 300
Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250
Professional fees (accounting, legal) 1,000 1,000 1,000 1,000
Rent or mortgage payment 21,000 21,000 21,000 21,000
Repairs & Maintenance#p#分页标题#e# 300 300 300 300
Storage 3,000 3,000 3,000 3,000
Telephones/communications 500 500 500 500
Travel 0 580 780 1,080
Utilities 1,000 1,200 1,260 1,380
Vehicle expenses 1,000 1,000 1,000 1,000
Wages & salaries (staff) 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67 4166.67
Total Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4#p#分页标题#e# 10357.4 38747.4 11957.4 11959.4 51167.4
 
Cash Flow Summary
Opening Balance 50,000 69,993 88,986
81,378
101,471
121,564
111,976
131,919
151,562
143,314
161,457
179,700
 
Add: Cash In 28,000 27,000 30,000 30,000 30,000 30,000 30,500 30,000 30,500 30,100 30,200 30,700
Subtract: Cash Out 8007.35 8007.35 37607.4 9907.35 9907.35 39587.4 10557.4 10357.4 38747.4 11957.4 11959.4 51167.4
Closing cash balance - surplus or (deficit) 69,993 88,986
81,378
101,471
121,564
111,976
131,919
151,562
143,314
161,457
179,700
159,232
#p#分页标题#e#
 
Cash Flow Statement for a Small Business
12 Month and Start-Up Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Receipts (Cash In)
Cash sales 438 422 469 469 469 469 477 469 477 470 472 480
Collections from accounts receivable 0 0 0 0 0 0 0 0 #p#分页标题#e#0 0 0 0
Owners' capital 0 0 0 0 0 0 0 0 0 0 0 0
Loan proceeds 0 0 0 0 0 0 0 0 0 0 0 1,250
Capital/Asset Disposal 0 0 0 0 0 0 0 0 0 0 0 0
Other cash received (specify) 0 0 0 0 0 0 0 #p#分页标题#e#0 0 0 0 0
Total Cash In 438 422 469 469 469 469 477 469 477 470 472 1,730
 
Cash Disbursements (Cash Out)
Advertising & promotion expense 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375#p#分页标题#e# 83.33375 83.33375 83.33375 83.33375 83.33375 83.33375
Bank charges & interest 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375
Business licenses & permits 3 3 3 3 3 3 3 3 3 3 3 3
Capital / Assets Purchases 0 0 0 0 0 0 0 0 0 0 0 0
Equipment Payments 0 0 #p#分页标题#e#0 0 0 0 0 0 0 0 0 0
Government Remittances (taxes, VAT, etc) 0 0 0 0 0 0 0 0 0 0 0 0
Interest expense 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375
Insurance 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375 20.83375#p#分页标题#e#
Loan/line of credit payments 0 0 0 0 0 0 0 0 0 0 0 1,250
Management salaries (owners draw) 125 125 375 375 375 500 438 438 375 625 625 625
Office supplies & expenses 50 50 25 37.5 37.5 50 56.25 31.25 37.5 43.75 43.75 37.5
Payroll remittances (pensions, payroll taxes, other taxes, etc) 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 #p#分页标题#e#1,250 1,250 1,250 1,250
Professional fees (accounting, legal) 125 125 125 125
Rent or mortgage payment 1,250 1,250 1,250 1,250
Repairs & Maintenance 37.5 37.5 37.5 37.5
Storage 375 375 #p#分页标题#e# 375 375
Telephones/communications 62.5 62.5 62.5 62.5
Travel 0 72.5 97.5 135
Utilities 125 150 158 173
Vehicle expenses 125 #p#分页标题#e#125 125 125
Wages & salaries (staff) 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338 520.8338
Total Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669
 
Cash Flow Summary #p#分页标题#e#
Opening Balance 6,250 8,749 11,123 10,172 12,684 15,196 13,997 16,490 18,945 17,914 20,182 22,463
 
Add: Cash In 438 422 469 469 469 469 477 469 477 470 472 480
Subtract: Cash Out 2094.669 2094.669 4419.669 2332.169 2332.169 4667.169 2413.419 2388.419 4562.169 2588.419 2588.419 6114.669#p#分页标题#e#
Closing cash balance - surplus or (deficit) 8,782 11,266 16,012 12,973 15,485 20,331 16,887 19,347 23,984 20,973 23,242 29,057
 
Projected balance sheet (end of year)
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 1,898,408 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 24,730 Less ITC (deductables) 0
  Net amount payable or (refundable) #p#分页标题#e#1,875
  Total current liabilities 1,875
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500
Buildings 0 Mortgage 0
Less amortization -1,250 Total long-term liabilities 12,500
Net land & buildings 11,175
  Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization -62.5 Owners' Equity
Net equipment 938 Investment 7,550
  Retained Earnings 17,230
Other Equipment 1,250
#p#分页标题#e#
Less amortization -188 Total owners' equity (E) 24,780
Net vehicles 1,063
Total Assets (A) 39,155 Total liabilities and equity (L+E) 39,155
   
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 1,898,408 Accounts payable 625
Accounts receivable 0 Short-term loans 0
Inventory 1,000 Other payments due in 12 months 1,250
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 24,730 Less ITC (deductables) 0
  Net amount payable or (refundable) 1,875
  Total current liabilities#p#分页标题#e# 1,875
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 12,425 Long-term loans (due after 1 yr) 12,500
Buildings 0 Mortgage 0
Less amortization -1,250 Total long-term liabilities 12,500
Net land & buildings 11,175
  Total Liabilities (L) 14,375
Computer and music Equipment 1,000
Less amortization -62.5 Owners' Equity
Net equipment 938 Investment 7,550
  Retained Earnings 17,230
Other Equipment 1,250
Less amortization -188 Total owners' equity (E) #p#分页标题#e#24,780
Net vehicles 1,063
Total Assets (A) 39,155 Total liabilities and equity (L+E) 39,155
Assets Liabilities
Current Assets Current Liabilities
Cash in bank 189,840 Accounts payable 5,000
Accounts receivable 0 Short-term loans 0
Inventory 8,000 Other payments due in 12 months 10,000
Cash in (item 1) VAT(BTW)owing 0
Cash in (item 2) VAT(BTW) collected on sales 0
Total current assets 197,840 Less ITC (deductables) (0)
Net amount payable or (refundable) 15,000
Total current liabilities 15,000
 
Fixed Assets Long-term Liabilities
Furniture and fixtures 99,400 Long-term loans (due after 1 yr) 100,000
Buildings 0 Mortgage 0#p#分页标题#e#
Less amortization (10,000) Total long-term liabilities 100,000
Net land & buildings 89,400
Total Liabilities (L) 115,000
Computer and music Equipment 8,000
Less amortization (500) Owners' Equity
Net equipment 7,500 Investment 60,400
Retained Earnings 137,840
Other Equipment 10,000
Less amortization (1,500) Total owners' equity (E) 198,240
Net vehicles 8,500
Total Assets (A) 313,240 Total liabilities and equity (L+E) 313,240
 
Ratio analysis 
Current Ratio = Current Assets / Current Liabilities = 197,84024,730/1,87515,000 = 13.19
Current ratio has been used to measure the liquidity of Sweet & Bitter. It has been shown that the current ratio for Sweet & Bitter is 13.19 which mean the liquidity of Sweet & Bitter is good. 
 
Debt - Equity Ratio = Total Liabilities / Shareholders' Equity = 14,37515,000/24,780198,240 = 0.580105
 
Debt - Equity ratio is the leverage ratio which is used to measure the relationship between obligations for suppliers, creditors, lenders and suppliers and what the shareholders have committed. 
 
Gross Profit Margin = Gross Profit / Net Sales = 137,840 / 409,500 = 33.66%
 
From the ratio analysis, it has been shown that Sweet & Bitter has the ability to repay their liabilities with good return for investors. #p#分页标题#e#
Break Even Analysis 
In this part, the break even analysis has been used to measure the business performance of Sweet & Bitter. By using break even analysis, the break even point is in compare the dollar units to the revenue. It is useful to analyze the pricing strategy for Sweet & Bitter as well. 
Break-even analysis depends on the following variables: 
Selling price per unit: The amount of money charged to the customer for each unit of product or service.
Total fixed costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.
Variable unit cost: Costs that vary directly with the production of one additional unit. 
Total variable cost: The product of expected unit sales and variable unit cost, i.e. expected unit sales times the variable cost.
Each of these variables is interdependent on the break-even point analysis. If any of the variables changes, the results may change. 
Total Cost: The sum of the fixed cost and total variable cost for any given level of production, i.e., fixed cost plus total variable cost. 
Total Revenue: The product of forecasted unit sales and unit price, i.e., forecasted unit sales times unit price. 
Q = FC / (UP - VC)
where: 
Q = Break-even Point, i.e., Units of production (Q), 
FC = Fixed Costs 
VC = Variable Costs per Unit 
UP = Unit Price 
Therefore, 
Break-Even Point Q = Fixed Cost / (Unit Price - Variable Unit Cost) = 159,40019,92511,175 / (194,24524,280/50,000 -101,00012,625/50,000) =85,47328,471 units
Therefore, the break-even point quantity for Sweet & Bitter is 85,473 units. It means that Sweet & Bitter has to sell 85,474 units of products in order to reach the break even point. At this point, Sweet & Bitter would product a zero profit, but it can cover all the cost. It means that Sweet & Bitter would make profit as long as it can sell any units more than 85,47328,471 units. From the forecast sales, it has been shown that in the first three years, Sweet & Bitter can sell 36,771 units. It means that it cannot break even in the first three years. Therefore, the company should lower their costs or try to increase their sales in order to achieve the break even point. 
Units 11,068 #p#分页标题#e#12,388 13,315
Year 1 2 3
 
Implementation Plan & Timeline
 
Timescale For Workshop Project - SAMPLE
 
Task #/Name Person 
Responsible Month of Action for Task Assigned
Sept Oct Nov Dec
Finalize planning permission Joe X
Apply for loan Jane X
Finalize suppliers Susan X
Liase with local building inspector Henry X
Seek Builders Joe X
Tender Information Joe X
Supervise Builders Joe X
Plan shop and interior design Jane /Susan X
Marketing materials created and distributed Henry X
 
Reference List文献
 
Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012, "IMPACT OF CHANNEL STRATEGY ON CUSTOMER VALUE OF KENYAN SOFT DRINK COMPANIES", Interdisciplinary Journal of Contemporary Research In Business, vol. 3, no. 9, pp. 1259-1266.#p#分页标题#e#
Calef, R.H. 1992, "In Search of a Soft Drink Strategy", Beverage World, vol. 111, no. 1517, pp. 40.
Davie, P. 1995, "New product development - the alcoholic soft drink market", International Journal of Wine Marketing, vol. 7, no. 3, pp. 49-59.
Gardner, J.C. & McGowan,Carl B.,,Jr 2010, "A Note on the Regional Triad Model and The Soft Drink Industry", Multinational Business Review, vol. 18, no. 1, pp. 89-94.
Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009, "PROMOTIONS AS COOPETITION IN THE SOFT DRINK INDUSTRY",Academy of Marketing Studies Journal, vol. 13, no. 1, pp. 105-133.
 
Reference List文献
Aila, F.O., Ondiek, G., Mise, J.K. & Odera, O. 2012, "IMPACT OF CHANNEL STRATEGY ON CUSTOMER VALUE OF KENYAN SOFT DRINK COMPANIES", Interdisciplinary Journal of Contemporary Research In Business, vol. 3, no. 9, pp. 1259-1266.
Calef, R.H. 1992, "In Search of a Soft Drink Strategy", Beverage World, vol. 111, no. 1517, pp. 40.
Davie, P. 1995, "New product development - the alcoholic soft drink market", International Journal of Wine Marketing, vol. 7, no. 3, pp. 49-59.
Gardner, J.C. & McGowan,Carl B.,,Jr 2010, "A Note on the Regional Triad Model and The Soft Drink Industry", Multinational Business Review, vol. 18, no. 1, pp. 89-94.
Meade,William K.,,II, Hyman, M.R. & Blank, L. 2009, "PROMOTIONS AS COOPETITION IN THE SOFT DRINK INDUSTRY",Academy of Marketing Studies Journal, vol. 13, no. 1, pp. 105-133.
 
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