Competitive environment: 2 main competitors compared with Smitty's Factors Quality Price Wagoners Slightly less Comparable in stores, Internet, Events/shows. TV for toy Able Wagons Comparable Slightly more Promotion Distribution All farm implement distributors, other stores Canadian Tire stores, Tool Co. and hardware stores, Toy stores Limited to main sellers (same as Smitty's) in stores, Internet All farm implement distributors, other stores Hardware stores, some toy stores Comparable to Smitty's Product range Company Big, producing many other Medium, some other products product ranges also Wagons account for Wagons account for less than 7% about 30% of their of their total sales total sales 25% and growing 15% Marker Share Smitty's share= 35% 25% other stores Less flexible than Smitty's Production Inflexible Building them up Relationship with Big company approach stores/customers Smitty's has small company, local appproach, good relationships YOUR TASK: Assuming Jeff buys the business in 1998, write a Business Plan for him which will guide him to take the business forward in the next 3 years. Use the Business Plan Content Details as a guide to write your Business Plan which should: Be professionally written and formatted. All the heads/titles listed in the content details (eg Executive Summary, Marketing Plan etc) may be included. Include the following in you plan and ensure the Plan answers the following questions: Would you rationalize Smitty's product range? Why or why not? Make a detailed table for sales as projected for the next 3 years. Marketing Plan Describe current operations of Smitty's. Do you agree on improvements? What will constitute the Management Team? Any other persons to be hired? Include legal considerations in the Plan (among owners, what happens to Once a Tree, shifting of operations outside of Shedden and so on). Projected or Pro Forma Income Statement for the next 3 years. Is $100,000 a fair price? Why or why not? Once a Tree is part of the deal. What can Jeff do about it in the future? Jeff has calculated that it will take $30,000 to improve quality, design and operations. Should he spend this additional money? When? Should Jeff finance his buy-out through a loan or equity? Calculate: o Return on investment O Return on equity o Payback period (no. of years it will take Jeff to get his investment back). o Internal Rate of Return (additional marks). Competitive environment: 2 main competitors compared with Smitty's Factors Quality Price Wagoners Slightly less Comparable in stores, Internet, Events/shows. TV for toy Able Wagons Comparable Slightly more Promotion Distribution All farm implement distributors, other stores Canadian Tire stores, Tool Co. and hardware stores, Toy stores Limited to main sellers (same as Smitty's) in stores, Internet All farm implement distributors, other stores Hardware stores, some toy stores Comparable to Smitty's Product range Company Big, producing many other Medium, some other products product ranges also Wagons account for Wagons account for less than 7% about 30% of their of their total sales total sales 25% and growing 15% Marker Share Smitty's share= 35% 25% other stores Less flexible than Smitty's Production Inflexible Building them up Relationship with Big company approach stores/customers Smitty's has small company, local appproach, good relationships YOUR TASK: Assuming Jeff buys the business in 1998, write a Business Plan for him which will guide him to take the business forward in the next 3 years. Use the Business Plan Content Details as a guide to write your Business Plan which should: Be professionally written and formatted. All the heads/titles listed in the content details (eg Executive Summary, Marketing Plan etc) may be included. Include the following in you plan and ensure the Plan answers the following questions: Would you rationalize Smitty's product range? Why or why not? Make a detailed table for sales as projected for the next 3 years. Marketing Plan Describe current operations of Smitty's. Do you agree on improvements? What will constitute the Management Team? Any other persons to be hired? Include legal considerations in the Plan (among owners, what happens to Once a Tree, shifting of operations outside of Shedden and so on). Projected or Pro Forma Income Statement for the next 3 years. Is $100,000 a fair price? Why or why not? Once a Tree is part of the deal. What can Jeff do about it in the future? Jeff has calculated that it will take $30,000 to improve quality, design and operations. Should he spend this additional money? When? Should Jeff finance his buy-out through a loan or equity? Calculate: o Return on investment O Return on equity o Payback period (no. of years it will take Jeff to get his investment back). o Internal Rate of Return (additional marks)