Individual Business Model And Plan: Australia Mint Lemonade (AML)

INDIVIDUAL BUSINESS MODEL AND PLAN
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Executive Summary
The report presents the business model and plans for a start-up known as Australia Mint Lemonade (AML). The start-up is developed based on the innovative idea to develop a healthy drink for the professional, students, and sports enthusiasts in Australia. In recent years, Australians have started to use more health-conscious drinks as compared to carbonated drinks. Therefore, it is expected that the Melbourne-based AML Company will gain a high market share. Organic mint leaves are used to manufacture the product, CSR (Corporate Social Responsibility) projects are introduced for farmers involved in organic farming, environment-friendly packaging is used to reflect green initiative and technology-based tools like data analytics is used to collect data systematically. In the initial stage, the company will operate ten shops in Melbourne City, and then new shops are open every next year. The financial projections reflect that AML Company generates AUD$500,000 in the first year based on the price per unit of $5. The projected net profit in 2020 is AUD$37,800 in 2020, AUD$154,690 in 2021, and AUD$183,925 in 2022. Therefore, based on financial projections, AML’s business idea based on mint lemonade products is a success, and it is expected that the company will expand its operations after five years.
Table of Content
TOC \o "1-3" \h \z \u 1. Introduction PAGEREF _Toc40885862 \h 42. Business Model Canvas PAGEREF _Toc40885863 \h 43. Market PAGEREF _Toc40885864 \h 64. Operations and Technology PAGEREF _Toc40885865 \h 75. Human Resources PAGEREF _Toc40885866 \h 86. Finance PAGEREF _Toc40885867 \h 11Reference List PAGEREF _Toc40885868 \h 13Appendices PAGEREF _Toc40885869 \h 16Appendix A: Start-Up Costing for Australia Mint Lemonade (AML) Company in 2020 PAGEREF _Toc40885870 \h 16Appendix B: Profit & Loss for Australia Mint Lemonade (AML) Company from 2020 to 2022 PAGEREF _Toc40885871 \h 17
Individual Business Model and Plan
1. Introduction
Start-ups and small-medium enterprises (SMEs) are an essential part of any kind of economy. Start-ups not only contribute in the form of taxes, but they also generate new job opportunities for unemployed individuals in the country. The reports present a business model and plan for a new start-up known as Australia Mint Lemonade (AML). Start-up has developed a product of mint lemonade with the use of organic mint and lemons. AML plans to open ten small shops in Melbourne City. Australians are sports enthusiasts; therefore, it is expected that customers from different segments of the market will be attracted to this healthy drink. AML is a Melbourne-based Company, and its potential market is centric to Melbourne City. The use of organic material in product manufacturing is an innovative way to attract health-conscious customers. The packaging material used for the AML product is environment friendly. The company’s objective to gain high market share among the customers by providing high-quality mint lemonade drink and corporate social responsibility (CSR) projects are introduced to encourage the use of organic products. Therefore, AML also decides to introduce a training program for farmers to transfer knowledge and information about different technology-based methods that can help to achieve high production from the organic farming of mint.
2. Business Model Canvas
The section discusses details about the business model canvas applied to AML Company. Important customer segments for AML Company are youth, professional executives, students, and sports enthusiast. AML has developed innovative value proposition strategies. AML’s organizational culture states that every customer and employee should be treated with a high level of respect. The company’s product and shop environment should create value for the customers through the high-quality product of mint lemonade. AML’s follow the social entrepreneurship concepts to provide solutions to social and environmental challenges (Sener and Hacioglu, 2017). For the customer relationship, the mobile application is developed by the company to transfer the information about our nearby locations. Discounts will be available through premium memberships offered on the mobile application download. Communication with customers is ensured through social media platforms, and feedback is collected to develop future products as per the expectations. Channels used by AML to offer its products are shops and also through its mobile application. Key activities of AML’s are; research and department activities to identify relevant new mint lemonade products. Sustainable supply chain management is developed to ensure that organic mint is provided on time. AML’s marketing strategies achieve a high market share in a short-term period.
Key resources of the company are; Environmental sustainability policy is used to ensure that the packaging of the products does not create a negative impact on the overall environment. CSR projects for the farmers provide support to improve the AML’s goodwill. Highly trained and professional employees will be encouraged to present creative ideas for the achievement of effectiveness in operational activities. AML’s key partners are suppliers, farmers, and advertising agencies. Continuous communication is ensured with the business partners to ensure high-quality products and also to achieve projected revenues and profits. In terms of revenue structure, AML’s only source of revenue is through the sale of its mint lemonade product. Cost structure includes different kinds of costs, such as; compensation and benefits package, employee training, shops rental leases, green packaging, and technology-based tools and methods.
3. Market
Mint lemonade product of AML belongs to the beverages industry. Therefore, it is essential to analyze the beverage industry from a different perspective. Food and beverage industry revenues in Australia are expected to reach US$ 4182 million at the end of the year 2020, and average revenue per customer is $724.92 per year (Statista, 2020). Revenue in the soft drinks segment is projected to be US$ 10,300 million in 2020, and CAGR is expected to be 6.7% from 2020 to 2023 (Statista, 2020a). According to one estimate, CAGR (Compound Annual Growth Rate) of food and beverages is expected to be 3.4% until 2024 (Statista, 2020). As per the estimates of the Goldstein Research, the projected CAGR is also 3.4% for the segments of the soft drinks, and expected revenue would be US$ 5813 million for the soft drinks industry by 2025 (Goldstein Research, 2019).
Changes in trends in soft drinks have created a negative impact on the industry and its competitiveness. Health-conscious customers prefer healthier alternatives to carbonated drinks. As per the research of IBIS World, price competition between notable brands is high, and this trend affected the industry’s performance (IBISWorld, 2019). Industry’s revenues were expected to decrease at an annual rate of 1.7% from 2014 to 2019(IBISWorld, 2019). The reduction in carbonated drinks revenue is a suitable trend for AML’s because mint lemonade product is expected to receive a high market share in the future. The barrier to entry is high in the carbonated drinks industry. For a healthy drink like mint lemonade, barriers are low because of the initial low initial investment.
Mint lemonade products will be used by customers of different age groups; therefore, its market segmentation is unique. It is expected that sports enthusiasts will use the mint lemonade product more as compared to other individuals. Australians are sports enthusiasts, and it can be judged from the findings of the Neilson Digital Ratings. As per the findings of Neilson Digital Ratings, 11.4 million Australians have watched the sports through electronic gadgets like smartphones and tablets in 2017 (Nielsen, 2017). The target market is the professional’s executives, students, and sports enthusiasts in Melbourne City, Australia.
Many cafes and restaurants serve mint lemonade in Melbourne City, Australia. AML’s shops are unique in Melbourne City because it only offers one product with the use of organic mint. The best places to drink a non-alcoholic drink in Melbourne city are Attica and Brae. Both restaurants have a market share of more than 60% in the non-alcoholic drinks segment (Siggins, 2016). The expected potential customers are 100,000 from all ten shops in one year. The potential locations are Chadstone the Fashion Capital, Bourke Street Mall, and Melbourne Emporium (Oceania, 2019).
4. Operations and Technology
Policies and Procedures for the company’s technologies and operations are essential for the achievement of sustainable competitive advantage. AML’s decides to develop a mobile application equipped with the feature of data analytics. The company’s data analytics department is responsible for carrying out the development of the mobile application. As per an estimate, 53% of the companies all around the glo...