Business Plan – Fast-Track Courier

Task One: Develop a Business Plan

Part One: Business Plan – Fast-Track Courier

Executive Summary 

Fast-Track Couriers offers delivery services and their main business is to transport medium and large-sized parcel all over Sydney Metropolis. The organization has been operating for the last 15 years and after a sluggish start, the company was able to enter and capture a substantial share of the market due to its reliability and customer satisfaction (Aguinis, 2009). This growth and dominance have also been witnessed by the growing reputation evidenced by the profit earned. Despite this, there is a need to expand operations to other regions to meet customers ‘ ever-growing need to transport goods to other regions.

Introduction

The company has targeted small and medium-sized firms that comprise 80 percent of their clients, especially in Sydney Metropolis thus limiting their market growth (Aguinis, 2009). Due to this limiting factor, Fast Track is considering expanding operations so as to meet clients’ needs and also boost their financial positioning.

This growth decision has been occasioned by contract cancellation as a result of the company not able to meet deliveries outside Sydney Metropolis especially in Wollongong, Newcastle and Central West. To successfully meet this expansion, the company has reviewed its operations in delivery routes where more trucks (that are fitted with an automatic liftgate) will be purchased to commit a driver per truck. The company also will put up a system that will improve the efficiency of the delivery of goods so as to meet the client’s needs and increase efficiency on the assets employed.

Business Description

The organization is privately owned and relies on a small but experienced team, provision of low-cost services and maintaining close ties with clients and the already existing business reputation as their base of reaching the market.

The company, after carrying research on the external market has decided to venture into those markets as there is a shortage of delivery firms in the regional New South Wales towns.

Organogram

The organization is owned by The Blanks family and three members of Blanks’ family sit in the Board of Management i.e. Peter Blanks, Billy Blanks and Kim Blanks. The Board of Management is tasked with approving all decisions. The business’s daily operations are overseen by the Managing Director and Supervises Department Managers i.e. Logistic Manager, Human Resources Manager, Head of Finance, Sales and Distribution Manager and Administration Officer. The company also has 20 Truck drivers and five office assistants supporting different organizations functions i.e. Accounts, Sales, Human Resource and Administration. Below is an organization structure of Fast Track Courier.

Fast Track Courier’s Organisation Structure

Business Operations

Table 1. Business Operations for Fast Track Couriers

Financial Performance and Estimated Financial Performance

Table 2. Current and Future estimated Financial Performance of Fast Track Couriers

Fast Track Courier reported net sales of $17 million and net profit of $1.9 million and anticipates to grow this to $22 million sales and $3.2 million profit by expanding to regions within and beyond Sydney Metropolis.

Resource Needs

            For Fast Track Courier to achieve their goals and objectives of expanding to new markets and increasing revenue, the company require the following, funds to procure 10 trucks each with an estimated price of $60,000, funds to fit the existing trucks with an automatic lift gate each costing $10,000.

Proposal

            Fast Track Courier requires a total of $800,000 to buy new trucks and fit the exiting 20 trucks with an automatic liftgate. This is projected to be financed using a loan facility that will be repaid over a period of 5 years, paying $ 200,000 per month. There are other incremental costs; Administrative costs of $100,000 per annum and operating costs of around $2.2 million per annum to be incurred. As indicated above, this proposal will lead to a 68% increase in profit earned in year one.

Risk Assessment

Table 3. Risk Assessment of Fast Track Couriers.

Conclusion

            As aforementioned in the introduction, Fast Track Couriers has been in the courier business for over 15 years in Sydney Metropolis. Over the years it has managed to build a significant base of customers who are loyal to the business. However, with this growth and reputation, the firm is faced with challenges of meeting clients’ demands resulting from needs to deliver parcels out of Sydney Metropolis. The company is in the process to open up its operations to the new markets and this has been approved and will need changes on how drivers operate and a total of $800,000 is needed to cover this change. Only one truck driver will be allowed as the trucks will be fitted with automatic lift gates and the other driver will be assigned a new truck. In the recent past, there has been noticeable resistance to change from drivers and the management is in the process of ensuring that the drivers buy-in into the new change and provide training about the expected changes.

Communication Strategy

The main stakeholders of the firm are headquarters’ employees, supervisors, truck drivers and Human Resource Manager. The primary mode of communication used to relay vital and relevant organization information to employees at the head office is E-mail. Moreover, newsletters are available to drivers each month to provide information on business operations. Each truck is provided with a manual detailing policies and procedures and the rest are distributed to staff in the office. Consequently, a GPS system is installed in each truck to monitor pick-ups and drop-offs.

Drivers get communication in regard to deliveries through a PDA system installed in the trucks. The system registers the beginning and end of a delivery which is sent to HQ. This information is used for reporting with regard to productivity. The change was not received well by the drivers claiming that there was some level of mistrust by the management but eventually they enjoyed working under the changes. The drivers are left to work independently to complete assigned duties by the logistics manager and they are motivated by the human resource manager to actively engage in various organization’s activities.

Adoption of internet and new technology for relaying vital information to varying stakeholders in a seamless manner so as to enhance decision making. Additionally, human errors are significantly reduced and drivers’ and employees’ performance and productivity are enhanced (Johnson, 2017). This also improves loyalty and commitment by members of the organization and employees in general and further enhances communication among truck drivers and head office employees.

Part B: Strength and Weaknesses of the Business Plan

The business plan has identifiable strengths; it has well-articulated characteristics as such; executive summary, Company description, management operations, a snapshot of financial performance, and a brief description of the market and sales. However, the report should have more in regard to financial performance and position and why they cannot consider financing the project using internally generated funds. Moreover, the business plans should have provided more information regarding their competition and provide an industrial analysis so as to provide a more clear picture of the industry they are in.

The business plan has met the characteristic of being Specific, Measurable, Attainable, Realistic and Time-bound.

Task Two: Performance Objectives

            The main performance purposes of the business plan are marketing and pricing strategies and providing relevant and high-quality training.

Relevant and High-Quality Training Provision

The business plan aims at ensuring effective and quality training to employees within the organization. The business plan needs to emphasize the importance of relevant training to ensure the organizational goals and objectives are met.

Relevance and effectiveness of excellence training are measured by evaluating participants’ reactions to make sure that they were involved in the training process. Effective quality training can be measured by giving out questionnaires and tests to the participants during and after training (Johnson, 2017). To determine whether the training had a positive impact on the participants’ job performance, the trained members are evaluated based on their behaviours after the training. An analysis of whether the training is meeting its desired objective to improve the quality of the overall organization goals is also performed.

A report on whether the training has been effective should be conducted during and immediately after the training process. The report should also be redone fortnightly to determine whether the training offered to the participants has been of help to them.

The report on the effectiveness of the training will later be used by the quality control and operations department within the organization, as a benchmark tool to compare the organization’s quality of output before and after the training. The aggregate number of grievances from customers in regards to the organization’s quality of services and products will also be used to determine whether training offered to employees was effective.

Pricing Strategy

The performance objective of the business plan is to come up with a pricing strategy that will help the organization attain a competitive advantage in the market and enable the business to achieve maximum returns. The company should adopt a pricing strategy that will enable it to charge little amounts for the services they offer and at the same time maintain a high quality of training and remain profitable.

A pricing strategy report should be conducted every month to ensure the business’s pricing strategy remains effective and also ensure that the business also achieves its set goals and objectives. The marketing department will also use this report to regulate prices depending on the different external and internal factors. This report will also be used by the finance section for their financial analysis and plans. The yardstick for this measure of performance is the analysis of the number of sales against prices and the production cost. Any variances will be reported in graphical representation comparing the pricing strategies’ performance against other factors.

Marketing Strategy

            The business plan in question seeks to realize high-quality training which will apply numerous strategies in its marketing strategy (Johnson, 2017). It aims at having various significant marketing plans that will make sure that there will be an increase in sales and returns of the company.

The business plans to use various strategies such as networking with different organizations and individuals to come up with potential business prospects through doing mails of brochures and information and conducting follow-ups via phone calls. Phone calls will be made to potential clients as well as driving into different estates to gather addresses and identities of prospective clients. Quality training will help design and develop a good website that will be used to advertise the organization’s services and products to the public.

A report will be conducted every week to determine the outcomes. Benchmark to be used for this report will comprise determining email numbers and brochures that will have been sent to pinpoint lucrative business opportunities alongside replies to the sent emails. The number of addresses and names acquired for possible clients will also be determined and analyzed. The quality assurance and control department will monitor the number of guests to the website that the organization used for its products and services advertisement to determine whether there was a decrease or an increase in the number of visitors to the website. The marketing department will be the major stakeholders of this report since they will need it for the planning of important decision making.

Task 3: Respond to Performance Data 

Question One: Performance Improvement

Table 4. Action Plan for Performance Improvement

Question Two: Performance in Contrast to Objectives.

Non-Performance Sectors

Use of the SMART format is not implemented in most of the KPIs hence the employees have no outlook of what achievement is needed and by when.

The percentage of the employees that have documented the KPIs and the KPAs is 80 percent only and the remaining 20 percent have no idea of the level of performance anticipated of them.

The goals of the warehouse are not in alignment with the KPIs since there is no clear indication to the employees on warehouse achievements. Fifty percent represents the workers declared to have surpassed the previous anticipated performance indicated by the performance ratings.

System Failures Report Contributing to the Outcomes

Stakeholder’s Non-Engagement

Stakeholders are part of the key decision-makers and have major inputs in the project. They help in improving and determining the outcomes of the project. Non-engagement of the stakeholders in the operations of activity can lead to undesired outcomes.

Lack of Communications

To make operational and effective decisions across the team, efficient Communication is required to facilitate the process. Communications breakdown can affect the decision-making process that can rapidly ruin the operation of activities.

Poor Planning

The workforce required to effectively make a project transition from the project team to the functioning setting or market place after the completion of a project is often an overlooked area. If the transition process is not well thought of, what seemed like a project success can turn into chaos very fast.

Failure to Address Performance Requirements

A system needs to fulfil non-functional requirements such as Performance requirements (Zimmerer & Scarboroug, 2005).  In most situations, performance requirements are rarely defined in the majority of the projects and that failure results in operationally unusable systems.

Assess the Performance Indicators

Warehouse operations are facilitated by the following KPIs;

The frequency of selling out inventory is measured by the inventory turnover which makes it vital to the business.

The time frame for the cost of inventory storage is the inventory carrying cost. Whenever the warehouse spacing is occupied by the inventory, there is an array of the cost associated with it such as storage, labour and risk. KPIs help in evaluating the proceeds of the current inventory and limiting the write-downs.

Effectiveness of the receiving area is a KPI that can lead to warehouse creation or breakage hence should not be overlooked.

Put-away: The elements to consider include; man-hours, rate of accuracy, item cost put away, and time is taken from delivery to pick the location.

Accuracy Inventory: Comparison of the number of items in stock to the database records is a great measure of the inventory accuracy.  Regular practise of this method ensures orderly bookkeeping practices.

Order picking/packing: Order picking is a costly process. It is a labour-intensive practise that is more complex compared to the other processes. The following are the important KPIs for order picking; order cycle times, picking labour costs, cost per line item picked, use of packaging and the orders picked per hour. Shipping focuses on customer service, speed, and the measure of accuracy

Question Three: Recommend Performance Improvement Strategies

            Training the employees motivates them and makes them feel appreciated, and lessens inadequacies and errors; this advances performance.

Communication. Communication errors should be avoided to prevent frustrating the employees and afterwards poor performance

Listening and paying attention to employees’ complaints makes one discover and improve key areas that satisfy the employees and improves productivity.

Employee’s empowerment. Employees’ goals should be considered and their strategies considered.  They should be allowed to contribute to the decision making process.

Rewarding good work. The best performing and improved employees should be rewarded to motivate them.

Keeping tabs on employee performance helps in noticing changes and timely implementation of corrective action measures to determine whether the changes made have the desired effect.

Proper equipment provision. Ensure that essential tools are available for efficient operation and also for employees’ safety.

Promoting the employees from within the organization is a chance for career advancement.

Identify and Redefine Performance Measures, if Necessary

Financial Metrics: Profit is one of the performance indicators (Zimmerer & Scarboroug, 2005). It helps in analyzing business performance. Through cost-effectiveness measurement, one can find the techniques of cost reduction and management.

Customer Metrics: Customer Lifetime Value (CLV) helps in determining the value the business is acquiring from long-term customer relationships. It is an indicator of the channel assisting in acquiring beneficial consumers for the best price.

Question Four: Systems Processes Strategy and Work Techniques at B&A Toy Warehouse

After the establishment of objectives, the goals and the strategies to pursue, the implementation and monitoring of the operations should follow. Ensure that the staff is knowledgeable of what is to be implemented and the time frame. The following is important in a farming business; ensuring the members are aware of their roles, developing rules for minimization of personal conflict risks and agreement on expectations concerning significant business areas.

Monitor and Evaluate

Progress monitoring and evaluation act as the base for ongoing advancement in a beef enterprise. The provision of accurate inputs and estimates from the analyzed information is used in setting the strategic direction of the enterprise through the monitoring process.

Monitor the Productivity and Profitability of the Business Regularly

A relationship exists between feedback and continuous monitoring and efficient plan implementation (Zimmerer & Scarboroug, 2005). Livestock performance, ongoing monitoring of physical funds, and monetary yields give efficient information on whether the strategies are rewarding or need revision. This is useful in risk minimization and uncertainties.

Describe the Implementation of Strategy on Continuous Improvement

Continuous improvement is a continuous effort to develop the procedures and processes in your organization.  The availability of a developed process is an indication that the staff can improve the working conditions.

Reference

Zimmerer, T. W., & Scarboroug, N. M. (2005). Essentials of entrepreneurship and small business management. Prentice-Hall.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. N., & Regnér, P. (2017). Exploring strategy (No. 11th e). Pearson.

Aguinis, H. (2009). Performance management. Upper Saddle River, NJ: Pearson/Prentice Hall.