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2 Table of Contents: Business Overview 1.1 Business name 1.2 Slogan 1.3 Prime function 1.4 Location 1.5 Legal structure 1.6 Business mission 1.7 Business objectives 1.8 Staffing Requirements 1.9 Licensing and legal requirements How the business will operate 2. Marketing plan 2.1 Marketing objectives 2.2 Competition 2.3 Advertisement 2.4 SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) 2.5 Price 2.6 Target Market 2.7 Product 3. Financial plan 3.1 Financial Objectives 3.2 Startup costs 3.3 Sales forecast 3.4 Monthly cash budget for the first year of operations 3.5 Future prospects Appendices Appendix I - Business card - Logo Appendix II - Sales forecast Appendix III - Fixed costs - Variable costs Appendix IV - Breakeven analysis Page 2
3 1. Business Overview 1.1 Business Name The business name is SurfScout. This name was chosen because it relates to a section of the target market which is surfing clubs. SurfScout is also very easy to remember as it is not very long. The 'Scout' part of the business name refers to the goal of the business which is to spot sharks to prevent shark attacks. 1.2 Slogan The business slogan is 'unmanned shark patrol.' This was chosen because it relates to the device which will be used to find the sharks which will be remote controlled drones that are fitted with cameras to spot sharks. 1.3 Prime Function The primary function of the business will be to prevent shark attacks particularly at surfing competitions and surf club events by using small, remote controlled, camera fitted drones to spot them before an attack occurs. Another function of the business will be to stop people from fearing sharks as a lot of Australian families do not go to the beach as often as they used to because they are afraid of them. By using these drones the business will hopefully lower the level of fear people face today so more people enjoy Australia's beautiful beaches. 1.4 Location The business will be located at a home office in Cottesloe, Western Australia, close to Cottesloe beach. This places SurfScout very close to Perth's beaches and therefore very close to the target market. A home office is advantageous because no leases will need to be paid which will save costs. Since the business offers a service rather than a product, the requirement for a large business premises will not be necessary. It would be unnecessary to have a large office space as the business will predominantly operate at beaches. 1.5 Legal Structure The legal structure of the business will be a sole proprietorship. This is because the profits made can be kept rather than splitting them as you would in a partnership, all the decisions can be made by the owner, start up costs will be less if the business is a sole proprietorship and lastly because establishing and operating within this legal structure will be a lot easier and simpler than operating a company or partnership. Also if the business was to change legal structure later on, it would be quite easy to do so due to having a sole proprietorship structure. Page 3
4 1.6 Business Mission SurfScout's mission will be to make Australian surfers, swimmers and families feel safe and be safe while they enjoy Western Australia's wonderful beaches, particularly at surf club events. 1.7 Business Objectives The business has the following objectives: To gain and maintain a competitive advantage over other similar businesses To provide an excellent service for surf clubs and local councils To gain a reasonable profit To provide jobs opportunities for adolescents and unemployed people who are skilled at flying drones and who seek a job. 1.8 Staffing Requirement The owner of the business who will be the manager. His responsibilities will include: Marketing Recruitment Management Interviewing of client Planning and administration The manager of the business will not have a consistent set work schedule because in winter SurfScout will have fewer clients because of the winter season reducing the need for the service, as less people go to the beach in winter. Hence in summer and the school holidays the business is likely to have more clients meaning the manager will have to work more hours. Three part time casual employees will also be required for the business and their responsibilities will be to: Fly the drones whilst looking through the camera attached to the drone (they will look on the screen on the controller to see where the camera is facing to spot sharks) Monitor the beaches for sharks (great white sharks, tiger sharks and bull sharks) Alert the proper authorities, surf competition runners and swimmers in the beach through a megaphone if a shark is spotted The casual employees will need to be relatively skilled at flying drones to work for SurfScout and will not require a degree of any sort, consequently resulting in a lower wage to save costs. He/She will not require any experience or knowledge at management as the manager would cover that. Each part time casual employee will have to be assessed on how well they fly the drones beforehand to ensure the right people do the job correctly. Senior surf Page 4
5 lifesaving cadets and surf life savers who are also skilled at flying drones would be the ideal employees as they would have previous knowledge on swim safety, in particular sharks. In interviews these prerequisites would be taken into account when it comes to selecting staff. All staff members will be required to have a mobile phone and they will be payed $28 an hour. 1.9 Licensing and legal requirements: In order for the business to operate as a sole proprietorship, the following legal requirements must be observed: Obtain Tax File Number Registration of the business name Pay casual employees superannuation contributions Obtain an Australian Business Number Register as a Pay As You Go (PAYG) withholder The business will also have to follow a certain code of practice concerning employees such as: Preventing bullying, aggression and sexual harassment targeted at the workplace National Employment Standards (NES) Providing reasonable working hours How the business will operate: Unfortunately the drones that cover SurfScout's requirements do not have a very long flight time before they have to be recharged. This consequently will result in six drones being purchased (can be seen in start up costs under the Financial Plan), meaning each part time employee will fly two drones. Once the first drone is low on battery it will be returned then placed back on charge and the second drone will then be operated whilst the first drone regains battery life. The three staff members will each constantly operate two drones rather than employing more staff members to save expenses later on. If a shark is spotted an alarm from a megaphone (also can be seen in startup costs under the Financial Plan) will be sounded to alert the people in the water and the surf club organisers (if clients are surfing clubs) of the danger. A verbal alert will also be given through the megaphone to alert the people in danger. 2. Marketing plan 2.1 Marketing Objectives: The marketing objectives of SurfScout are: To promote awareness of the business's service To achieve the business mission To build strong customer connections in order to build a client network Page 5
6 To make families, surfers and swimmers feel safe at beaches To protect families, surfers and swimmers from sharks To generate profit 2.2 Competition Surf Scout's Competition would include: Surf Life Saving Western Australia: despite the fact that this organisation provides manned on ground beach patrols and helicopter beach patrols, SurfScout has a competitive advantage over this organisation because of the low start up costs and low expenses. This is because Surf Life Saving WA would have to purchase petrol and maintenance services in order to fly their helicopters and a pilot would also be required. Also ground beach patrols are limited by their ability to only view from the shore line. SurfScout can beat this organisation competitively because of the better aerial surveillance that the drones would provide. Eco Shark Barrier: this business provides a barrier which basically acts as a fence protecting us from sharks without killing the sharks like a net would. SurfScout beats this competitively in terms of expenses because the barrier is very costly. People also generally go to beaches to swim freely and this barrier constricts people to a small area to swim safely in. SurfScout's competitive advantages: Low startup costs and expenses Not purely profit orientated, so a higher quality of care should be given Lower maintenance, repair and operation costs Relatively low wage costs for drone flyers Allows people to swim safely in larger areas of water (as opposed to a small confined area, surrounded by a fence) 2.3 Advertisement SurfScout will undertake the following methods of advertising: Brochures - that will be placed at surf clubs and local government council rooms Direct approaches to surf clubs, local councils and event organisers of surf competitions Website - so clients can find out more about what the business does and how much the service costs Signage - placed around Perth beaches and close to surf clubs Social media - Facebook and Instagram Business cards Word of mouth - customers will hopefully talk positively about SurfScout. Page 6
7 Some of these methods of advertising will be advantageous because they won't cost any money. This is because social media is free. 2.4 SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) 2.5 Price The business will charge the service on an hourly basis. The price for the service will be $145 per hour. This price was decided because: The business has a huge responsibility as people's lives are at risk The business costs $102.8 per hour to operate not including startup costs. Hence this amount must be charged in order to make a reasonable profit. The minimum wage is roughly around $16.87 an hour and SurfScout wishes to pay its casual employees fairly for the job that is required as they have a large responsibility. Therefore a higher fee for the service is needed. 2.6 Target Market The target market of SurfScout will include: Local government councils - that would purchase SurfScout's service to protect families, swimmers, surfers, kite surfers etc at the beaches. Page 7
8 Surf clubs - that would purchase SurfScout's service to protect surfing members during competitions, lessons and surfing events. Since the target market includes surf clubs and local councils it would be unnecessary to spend money on advertising on television and in newspapers because the target market is less likely to see those methods of advertising as opposed to a sign or brochure placed near the target market. 2.7 Product 1. Interviewing of clients - The target market will firstly be interviewed to organise when and where the service will be carried out and for how long the service will be provided (maximum of 8 hours.) The interviews can take place over the phone or preferably in person at the home office in Cottesloe. The interviews must take place at least one week before the day when the service will take place so the business owner has enough time to inform the three casual employees. At the interview a series of days where the service will occur can be agreed on (e.g. if the client wants to hire the businesses service for 4 days then that can be agreed on at the interview) 2. Informing employees - the casual employees will be then notified at least one week before about the upcoming event when the service will need to be provided. 3. Service - the service will then take place and will go for the number of hours agreed on at the client interview. At the end of the event the fee will be collected. 3. Financial Plan: 3.1 Financial Objectives The business will have the following financial objectives: To expand financially in the long term by earning sufficient funds To pay off the family loan after two years To receive a sufficient amount of income for the owner A family loan of $17000 and $3000 from the owner's savings account will be paid to cover all start up costs. All remaining funds from this loan will be kept and then used later for other additional expenses such as increased costs for advertising. Since the loan is a family loan no interest will need to be paid on the loan, thus reducing expenses. Page 8
9 3.2 Startup Costs 3.3 Sales forecast The following assumptions are made in the sales forecast in Appendix 3: In the school holidays SurfScout will have more business (July, October, January and February) In winter there will be less business for SurfScout In summer the business will peak December and January will be the best months for the business because of both school holidays and warmer weather The only business that SurfScout will get in winter is when surf competitions occur (May, June, July, August, September) Every year the business will receive an overall profit close to $20000 per year. 3.4 Monthly Cash flow budget for the first year of operations: Page 9
10 Transport (which can be seen under the fixed costs) costs varied every month because of certain working days, so the transport cost for every month has been weighted according to the number of working days every month (which can be seen under Appendix II Patrol Sales Forecast ) 3.5 Future Prospects A breakeven analysis and predicted working hours table can be seen in Appendices IV and II. SurfScout is able to break even in the first year that it operates. At the end of the first twelve months of operation the business receives a fairly significant profit ($20001) according to the cash flow budget. In the future the business is likely to change legal structure to a partnership in the long term to share the responsibility of the owner's position. If the business continues to be successful and continues to generate consistent profits every year more casual employees will be employed and in winter when it is colder other alternative uses for the drones will be considered such as aerial mapping and surveillance services. SurfScout could also potentially expand into other states and territories for more business. Page 10
11 Appendices: Page 11
12 Page 12
13 Appendix III Fixed costs: Variable costs: Page 13
14 Appendix IV: Breakeven Analysis: Fixed costs = $5130 Variable costs = $ Service charge: $145/hour Contribution margin = $ /year ((145 x 474) ) or $53.02/hour (145 - ( /474)) Breakeven point = total fixed costs/contribution margin = $5130/$53.02 = service hours Therefore the business has to make $ (96.76 hours x $145) before achieving a profit which is possible according to the sales forecast. Page 14
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