Business Plan for Great Barrier Reef Sponge Farm Case Study

Business Plan for Great Barrier Reef Sponge Farm - Case Study Example Based on feasibility studies, the business has targeted two premises, one to be used as its administrative office and the other as its factory location. Rents in the administrative block stand at $15,000 per annum while rents at the factory stand at $16,000 amounting to a total of $31,000 per annum. Initial funding for the project is expected to be $100,000. Of this amount, the principal shareholder has contributed 40%, that is, $40,000 while a bank lone of $60,000 has been secured to cover the remaining 60% of the funding requirements. The proprietor placed his three apartments flat as collateral security for the loan. Sales for the first year are expected to amount to $500,000 and are expected to grow at an annual rate of 10%. Gross profit is expected to be $100,000 against which expenses for rents, depreciation of factory equipment, wages and salaries, overhead expenses and miscellaneous expenses will be charged. Expenses during the second, third, fourth and fifth year are expected to witness increases as the company plans to increase expenditure on advertising, research and development, staff, and office and factory equipment. Constant growth is expected to come from an aggressive marketing strategy that will be adopted by the company. The company also expects to develop a good reputation through the supply of high quality products as well as good customer services. The company will also do everything necessary to protect the environment it which it operates such as improving its waste management activities as well becoming ISO1400 certified. Mission Statement. The mission of Reef Sponge Farm Cairn-Australia is to provide its customers with high quality sponges and to maintain a high reputation in the sponge industry in Cairns and Australia as a whole. Overview SWOT Analysis SWOT analysis refers to the strengths, weaknesses threats and opportunities. Strengths include such things as technical competence of proprietors, enough financial resources, good network of contacts for potential clients, suppliers and target market. Weaknesses include lack of management skills, no business track record, and no current plan for management succession in the short-term. Opportunities include rapidly growing market, poor reputation of existing businesses, large number of old yet valuable homes, availability of casual staff and tradespersons, availability of display and manufacturing premises within the area, high disposable income within the target market, potential for future expansion of the business. Threats include poor reputation of the industry, potential for economic downturn, natural disasters and catastrophes, wars, existence of competitors rising cost of raw materials, rising cost of real wages, government regulation. As far as Great Barrier Reef Sponge Farm is concerned, the main strengths of the company include the presence of scientists with experience in sponge products who have sound technical basis in solving production problems as they arise and in proposing innovative strategies for growth. The company has also has a good management with knowledge of both financial, managerial and marketing skills which makes it possible for it to overcome management problems and thus increases its ability to succeed in the industry. Some of the weaknesses of