Import business plan Business & Marketing Research Paper

1 Business plan
1 Type of Business: Importing Business
2 Product: Filipino Delicacies
From Philippines to United Stated
3 Business Transactions
* Importing company:
Ї Faster Freight, Inc. is one of the top logistics firms that delivers handles importing from the Philippines to the United States.
* Customs Broker:
Ї The employment of local customs brokers allows the company to deal with the complexities regarding trade regulations and other legal and logistical issues from the Philippines.
Ї Functions:
н Document processing
н Tariff Negotiation (i.e., bill of lading, insurance, excise taxes, etc.)
н Management of Customs Entry
н Provision of Cargo Insurance
2 Legal Structure: Corporation Limited Liability Company
4 A corporation is the preferred legal structure for this company in order to minimize the risks of failure, enjoy tax incentives, as well as allow for the acquisition of sufficient capital for funding CITATION Entnd \l 1033 (Entrepreneur.com, n.d.). Accordingly, due to the complex nature of an importing business, a Limited Liability Company would be best to reduce risks, lessen paperwork, decrease personal liabilities and improve profit flexibility as compared to other types of corporations.
* Board of Directors:
Ї CEO and President
Ї CFO – Chief Financial Officer
н Takes care of accounting, financial planning, risk mitigation, and reporting.
Ї CCO – Chief Commercial officer
н Establishing a sales and marketing team. Manages the day-to-day operations of the company.
Ї CHRO – Chief Human Resources Officer
н Manages hiring of internal employees for the corporation.
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4 Marketing Strategy
5 Marketing Budget: 2.5 Million USD/ year
6 Types of marketing platforms: Internet (paid) marketing (i.e., Amazon ads, social media advertisements) and word-of-mouth marketing.
1 Internet (paid) marketing: 1.5 Million USD/ year
1 Since the main source of revenue for importing businesses are its sales then the company should allocate huge amount of resources for reaching its customers. Accordingly, since Facebook and Amazon are the biggest social networking site and the largest internet retailer in the United States CITATION Mer20 \l 1033 (Merton, 2020), then digital marketing efforts should be directed to these two platforms.
2 Word-of-mouth marketing: 1 Million USD/ year
2 Word-of-mouth marketing is an effective tool for increasing customer sales as well as loyalty to the products being sold.
Financial Strategy
* Startup Financing = Estimated Capital Needed (50 Million USD)
Ї Allocation of Sources: 50% Debt (Bank loans); 30% Venture Capitalist; 20% equity
н Debt: Bank loan from Citigroup Inc. for 25 Million USD; interest rate of 5.25%, payable in 15 equal annual amortizations
ш To generate the right amount of capital for the startup of business without sacrificing the board’s control over the growth trajectory of the business, the bulk of the capital should be taken from debt rather than equity CITATION Incnd \l 1033 (Inc.com, n.d.).
н Equity: Raise 10 Million USD by offering common and preferred stocks to the public via IPO (Initial Public Offering). Share Repurchase agreement after 15 years.
ш Equity should be the least dominant source of capital in order to maintain control over the company. To ensure that the company could engage in calculated decisions in the future, a share repurchase agreement should also be provided, 15 years after the issuance of the IPO.
н Venture Capitalist Loans: Obtain 15 Million USD loan from Sequoia Capital.
Products and Services
* The company offers comprehensive import brokerage services and inventory consulting services. These include:
* In demand Filipino delicacies
* Shipping
* Warehousing
* Vendor/buyer identification
* Purchasing, contracting and consulting
* Delivery
Price
* Pricing strategy will be controlled based on four distinct components, these are:
Ї Product cost
Ї Transportation (transport and shipping) cost,
Ї Clearing charges, and
Ї A mark-up percentage
* This pricing strategy makes it easy of that to monitor, alter and adapt the prices for each element based on the variations of internal and external market forces as well as the company’s profit objectives.
Promotion
* Promotion and advertisement campaigns will include:
Ї Branding of company vehicles: All the vehicles that deliver the Filipino delicacies from the ports to warehouses and those conduct the final delivery to the customer will be branded with the company’s colors, logo and promotional messages.
Ї Public Relations activities: The Company will organize and take part in trade fairs and workshops to raise awareness about its operations and services it provides.
Ї Branded merchandise: These will include t-shirts, caps and calendars with company information that will be gifted to customers and employees.
Ї Television and radio advertisements
* The proposed expenditure for promotion is indicated in the tables below
Advertising budget

Year

Amount (USD)

Year 1

4,964

Year 2

5,213

Year 3

5473

Year 4

5747

Year 5

6034

Table 1: Promotion expenditure forecasts (5 years)
Description

Monthly rate (USD)

Annual rate (USD)

Vehicle branding


562

PR activities


1980

Branded Merchandise


430

TV and radio commercials

165

1980

Total


4952

Table 2: Promotional analysis for 1 year
Place
* The organization will have the following facilities
Ї Company headquarters- will house all the administrative employees
Ї Two warehouses- located near the shipping point to receive imports from the Philippines.
Ї 20 distribution centers located across various states.
Sales forecasts
Sales Forecasts

Year

Amount(USD)

Year 1

7,654,971

Year 2

7,820,468

Year 3

8,002,514

Financial statements
Income statement
Balance sheet
Pro Forma Balance Sheet


Year 1

Year 2

Year 3

Assets








Current Assets




Cash

$30,290

$93,790

$3,500,460

Other Current Assets

$0

$0

$0

Total Current Assets

$30,290

$93,790

$3,500,460





Long-term Assets




Long-term Assets

$60,000

$60,000

$60,000

Accumulated Depreciation

$12,000

$24,000

$36,000

Total Long-term Assets

$40,800

$36,000

$24,000

Total Assets

$78,290

$129,790

$3,524,460





Liabilities and Capital

Year 1

Year 2

Year 3





Current Liabilities




Accounts Payable

$278,210

$294,650

$415,480

Current Borrowing

$200,000

$0

$0

Other Current Liabilities

$0

$0

$0

Subtotal Current Liabilities

$478,210

$294,650

$415,480





Long-term Liabilities

$0

$0

$0

Total Liabilities

$478,210

$294,650

$415,480





Paid-in Capital

$5138,000

$5,138,000

$5,138,000

Accumulated Surplus/Deficit

($69,000)

($5,537,920)

($5,302,860)

Surplus/Deficit

($5,468,920)

$235,060

$3,273,840

Total Capital

($399,920)

($164,860)

$3,108,980

Total Liabilities and Capital

$78,290