BUS 102: Assignment 2 Abu Dhabi University Company Company Name Wingman Footwear Mission Statement Wingman Footwears mission is to design and create supreme quality footwear designed for athletes of all backgrounds across the world and ensure unrivalled success in their respective fields. Vision Wingman Footwears vision is to be the global leader in innovative footwear that strives to maximize the athletic potential of all athletes. Products and Services Wingman Footwears signature product will be shoes and footwear for all sports and athletics, including running shoes, football boots, basketball shoes, and golf shoes among others. However, unlike the majority of shoe brands currently active in the market, the companys product quality and mechanisms will revolve around undertaken research that will strive to find physical enhancements that will improve performances in specific areas of different sports. For instance, one such proposed product could be pairs of football boots that are designed to specifically increase the shooting power when a player strikes the ball, which could, in theory, be done by flattening the surface area on top of the boots (known as the laces). Such specific designs and mechanisms would be beneficial to strikers and distance shooters in the modern game. This is merely an example of how Wingman Footwears products would strive to distinguish itself in a populated market via innovative methods. In terms of services, Wingman Footwear will offer product damage repair free of cost within a certain period, i.e. one to two years. Since sports shoes are quite heavily used, it is likely that some customers may experience wear and tear soon after their purchase (depending on usage). As a result, it would be beneficial to provide customers with this service, as it would ideally not put them off buying the brands new products. Key Customers The target market for Wingman Footwear would be athletes across a multitude of sports. However, since most high-level professionals are fully endorsed and sponsored by brands. As such, the initial target market would be teenagers, adolescents and adults that have a passion for sports and place it at the top of their hobby list. Additionally, Wingman Footwear will also target athletes that are participating at a semi-professional level such as college sports, Sunday league football, or local competitions. By providing this initial target market with high quality products, the company will strive for customer loyalty as it looks to establish itself in the market. Should Wingman Footwear eventually secure a position as one of the worlds leading sports brands, the company will look to expand their target market to high-level professional athletes and will look to sponsor notable athletes. Projected Sales in the First Year The average manufacturing cost of one pair of sports shoes is approximately $28.5. This same shoe would then sell for $100 on the market. Since Wingman Footwear is a brand-new company, it is likely to experience a similar manufacturing cost to the average of $28.5 (Dunne, 2014). However, in order to successfully penetrate the market, a reasonable selling price would be $70. This is significantly lower than the market price for shoes of existing brands, yet not low enough to be classed as an inferior good. A unit price of $70 is likely to attract new customers and allow them to experience a new product. As a new company, Wingman Footwear is likely to sell a low number of units per day over the course of the companys first year. A reasonable forecast of the number of units to be sold in the first year is approximately ten thousand units. Considering the staggering figures of the superpowers of the sports industry (e.g. Nike sells 25 pairs per second), this is a reasonable figure (Pearson, 2016). Thus, the following equates to the projected sales in the first year: Projected Sales=Total Units Sold Unit Price Projected Sales=10,000 70 Projected Sales=$700,000 Key Operations The first key operation is, of course, the production phase of the company. This includes the purchase of the materials, manufacturing of the shoes, machinery, etc. This is the most work-heavy aspect of the company and will involve the vast majority of the costs. This key operation will be reliant on machinery, as Wingman Footwear will look to incorporate the batch production method for its products. The manufacturing and production of the products will also involve the most employees as it is the most important part of Wingman Footwears operations. The second key operation is the product design and the work involved in the artistic side of the manufacturing process. This will include designers who will continually create and refine new models to anticipate and follow modern day trends. This operation is also vital to Wingman Footwears survival in the vastly competitive market. The third key operation is the company store. This will include selling the products as well as the service that Wingman Footwear will provide. At the store, the employees are in charge of selling the products and helping customers find the right sizes. Shoes requiring repair will be sent to the factory from the outlet. As discussed earlier, this service is important to the company as it will allow for continued customer loyalty. Number of Employees Employees will be recruited based on the role that they are applying for. Workers, designers and managers will be recruited separately and will mostly consist of young employees with fewer regard for experience. This way, fresh graduates will have the opportunity will work at Wingman Footwear. This is an opportunity that such employees would struggle to get at large companies such as Nike or adidas. Employees will be split up based on the first two operations. The shoe factory will consist of the vast majority of the employees at the company. The factory is expected to involve a total of 50 workers, 45 of which are workers while the remaining 5 are managers. Meanwhile, there is likely to be no more than 5 designers working for the company, as it will initially be a small business. As for the store, it is expected that there will be a further 10 employees working at the Wingman Footwear outlet. Partners and Suppliers Wingman Footwear will be a partnership business. The partnership will consist of myself and a friend of mine. The two of us would be in charge of all of the companys assets and liabilities, meaning that although this would ensure ease of control across the company, my friend and I would also have unlimited liability. However, I believe that for a new company entering such a competitive market, the increased level of control that a partnership will offer is beneficial for the initial management of the company. To produce high quality shoes, Wingman Footwear would need to find a suitable and proficient supplier in order to get the necessary materials needed for the manufacturing process. Such materials include leather, textiles, synthetics, rubber and foam. Therefore, Wingman Footwear will look to form a supplier partnership with a textile company. Wingman Footwear would buy the materials in bulk in exchange for a lower unit cost of materials. An example of such a supplier could be Rehana Textiles, located in Musaffah, Abu Dhabi. Expenses BUILDINGS/REAL ESTATE AMOUNT DETAILS Remodeling $36,121 The warehouse that Wingman Footwear will be renting will be remodeled to suit the companys proposed machinery set up. This is the remodeling fee for the particular size of the warehouse. (Remodel Costs, 2019) Other $722 This is the 5% agent fee for remodeling the warehouse. Total $36,843 Sum of all buildings/real estate expenses. CAPITAL EQUIPMENT LIST AMOUNT DETAILS Furniture $1,500 Furniture will include cashier desks, shoe shelves, and cushion seats for customers. Equipment $500 Total estimated cost of light factory equipment (e.g. saws, cutters, etc.) Fixtures $1,500 Basic fixtures in the factory needed for manufacturing the products. Some fixtures will also be needed in the store (air conditioning, glass door, music speakers, etc.). Machinery $10,000 Machinery needed in the factory, including pattern and cutting machine, stitching, shoe lasting, finishing, and synthetics. (Footwear Machines, 2019) Other $500 Miscellaneous. Total $14,000 Sum of all capital equipment expenses. LOCATION AND ADMIN EXPENSES AMOUNT DETAILS Factory Rental $102,096 This is yearly rent of the proposed warehouse that will be rented. It is located in Musaffah and costs 375,000 AED yearly, equating to $102,096. The warehouse is approximately 10,000 square feet, allowing for enough space for the machinery, equipment, as well as the employees. (Dsilva, 2013) Store Rental $10,890 This is the yearly rent of the store. It is also located in Musaffah and costs 40,000 AED yearly, equating to $10,890. The store is 645 square feet. (Awan, 2019) Utility deposits $5,650 Compulsory deposit at the beginning of both rentals. Legal and accounting fees $130 Ejari (licensing in UAE) fee. Costs 475 AED, equating to $130. Prepaid insurance $741 Average prepaid business insurance cost. Pre-opening salaries $212,355 Total salary of first quarter. This figure was calculated by multiplying the average three-month salary of an employee by the total number of employees. 65$3267=$212,355 Other $5,679 Total agent fees for the factory and store rentals (5% of first year rent for both factory and store; one-time payment). Total $337,541 Sum of all location and admin expenses. OPENING INVENTORY EXPENSES AMOUNT DETAILS Manufacturing Cost of Products $285,000 Found by multiplying total units by average production cost of one shoe. $28.510000=285,000 Total $285,000 Sum of all opening inventory expenses. ADVERTISING AND PROMOTIONAL EXPENSES AMOUNT DETAILS Magazine Advertisements $29,402 Advertisements will be done in magazines. This is the total fee for a one-year contract with a fashion magazine for a one-page advert. Printing $1,440 Total printing cost of magazine adverts for first year. Total $30,842 Sum of all advertising and promotional expenses. Revenue REVENUE SOURCES AMOUNT DETAILS Sales Revenue $700,000 This is the projected sales for the first year, found by multiplying the projected units sold by the unit price. 10,000$70=$700,000 Service Revenue $0 The repair service provided by Wingman Footwear is free of charge. Total Revenue $700,000 Total income from all revenue sources over the course of the first year. Projected Profit CATEGORY AMOUNT DETAILS Projected Sales $700,000 Total income from all revenue sources over the course of the first year. Total Expenses $704,226 Total costs for the first year. Estimated Profit -$4,226 This figure is found by subtracting the total expenses from the projected sales. Evidently, it is expected that there will be $4,226 loss after the first year of the business. Financial Plan The proposed financial plan for Wingman Footwear is to receive a term loan. A term loan, defined as a loan from a bank for a specific amount that has a specified repayment schedule, would allow the company to initiate the business by purchasing the necessary fixed assets. These fixed assets include machinery, equipment, and furniture. Additionally, the term loan is also essential in initially renting the factory and store, as well as manufacturing the opening inventory. These are significant expenses that would require significant funds ($337,541 in location and admin expenses and $285,000 in opening inventory expenses) in order to be accomplished. As calculated earlier, it is expected that there will be a total $704,226 worth of expenses for the first year of the business, while the forecasted sales amounts to $700,000. Evidently, the company will be expecting loss at first. As a result, in order to cover the loss incurred in the first year, a suitable term loan to initiate the business would a loan of $750,000 due to paid back over 20 years. As stated before, it is forecasted that the company will incur a loss over the course of the first year of the business. A net loss of $4,226 would leave Wingman Footwear with $745,774 from its initial loan. This would allow the company to continue operations in the second year of the business, where it is expected that there will be a significant net profit (as opposed to the loss in the first year) due to increased sales as well as a lack of fixture costs, agent fees, deposits, and insurance fees. National Bank of Umm Al Qaiwain in Abu Dhabi offers a compound interest rate of 13% for business loans, meaning that the debt to paid after the specified 20 years would amount to the following (Business Loan in UAE, 2019): $750,000(1.13)^20=$957,675 Dividing the calculated figure above by 20 gives us the amount that must be paid each over the course of the 20-year term in order to fulfill the debt: $957,67520=$47,883.75 Wingman Footwear would thus need to pay an average of approximately $48,000 annually over the course of 20 years, although the paid amount is likely to vary depending on each individual year (e.g. $45,000 paid in the first year and $51,000 in the second year). This is a reasonable figure, as significant profits are forecasted after the first year due to fewer costs going forward. In conclusion, receiving a term loan from the National Bank of Umm Al Qaiwain is a realistic and achievable financial plan that will look to ensure the companys success over a long period of time. based on thus case study, I need answer to this

Start-up Business Plan Think about a new business. Using the template below, make a start-up expenses plan for your company. Make the plan for financing the operations. Company Describe the following: The mission of the company Vision Products and services Key customers Projected sales in the first year Key operations Number of employees Partners and Suppliers Expenses BUILDINGS/REAL ESTATE AMOUNT Purchase Construction Remodeling Other Total CAPITAL EQUIPMENT LIST AMOUNT Furniture Equipment Fixtures Machinery Other Total LOCATION AND ADMIN EXPENSES AMOUNT Rental Utility deposits Legal and accounting fees Prepaid insurance Pre-opening salaries Other Total OPENING INVENTORY AMOUNT Category 1 Category 2 Category 3 Category 4 Category 5 Total ADVERTISING AND PROMOTIONAL EXPENSES AMOUNT Advertising Signage Printing Travel/entertainment Other/additional categories Total OTHER EXPENSES AMOUNT Other expense 1 Other expense 2 Total Financial Plan Describe how your company will be financed during the pre-start up and start up phase. What are the sources of finance, and how much funds will you need.