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Sunday, August 14, 2011

Case Study On Cabinet Shop

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Executive Summary


We have been commissioned by Mr. Biff Smith to prepare a formal business plan and associated financial forecasts for Biff’s Cabinet Shop. This information will assist Biff’s banker in advising him on a wise course of action regarding loans from the bank.


About the Owners


Mr. Biff has been on unemployment insurance for the past 6 months, and is looking to start his own business to create himself a job. This business will be based on his existing skills and interest in kitchen cabinets. Biff has quite a bit of experience in this field as he made part-time money selling and installing kitchen cabinets for friends. Both Biff and his wife have friends who have experience in owning and operating a small business. In order to continue looking into this business opportunity, Biff will need financial forecasts for the business to present to his banker. His banker has indicated to Biff that with his current savings and equity he would be a good candidate for a New Venture Loan.


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Target Market


Biff’s Cabinet Shop’s target market will include both individuals looking to build a new home, or existing homeowners looking to renovate and purchase new kitchen cabinets. As a relatively small business, we anticipate that most of Biff’s sales will be from within the Greater Sudbury area.


Situational Analysis


Strengths


- Biff has experience with cabinet sales and installation (intellectual asset)


- He has contacts with suppliers and installers


- Friends are a resource of information about the trials and tribulations of operating a small business


- Has established a reputation in the area by doing this part-time


- Selling his cabinets at 0% less than the competitors


Weaknesses


- Although he was advised not to hire labour, he doesn’t have the time to do the installations himself


- He is absorbing the shipping costs rather than trying to get some of it back through the selling price


- No experience running their own business


Opportunities


- He will be the only carrier of his supplier’s products in the area


- Valley population is growing so there will be an increase potential consumers in the immediate area


Threats


- Other cabinet makers in the area


- Decline in the population in the Greater Sudbury area will mean less potential consumers altogether


Competitive Analysis


Biff’s competitive advantage is that he prices 0% less than the competition.


I added a strength and a opp and threats. I started the competitive analysis.





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