Thursday, 20 October 2016

Anthony and Orchard Consultancy Report

Anthony and Orchard Consultancy Report
What we have initially presented as a statement to Investors and Financial Lenders, the introduction of a new product line to include apple juice in the business plan, is a true and vivid display of the Anthony and Orchard business proposal - the intention is to have a realistic business goals, and also give assurance to maximum returns from the new product. The tendency to perceive the production industry with some very optimistic projections, highlighting strengths and hiding the risks and weaknesses is common with corporates and entrepreneurs. As the shareholders, we have a financial obligation and a vested stake in the overall success of this new product line: Having a comprehensive financial, business, production and marketing plan that cater for the need to finance our capital and shareholders needs is our main objective. We have undertaken all precautions to validate the business and our financial models keeping in mind realistic projections. This has been materialized as follows:
The business concept we have was extracted from an elaborate Market Analyses. the company has built the business around consumers after conducting market research and analysis apart from just relying on preconceived ideas. In short, our apple juice is built to meet an unattained customers 'want'. We included a contingency buffer in the initial cost to make sure the product is not under financed and to ensure the new product line is adequately financed to sustain it in the first two quarters of start-up.
Evaluation of all risks associated with juice production failure be it traditional or nontraditional was done and taken into account in our business plan and come up with appropriate mitigation strategies for each of these risks.
We have also conducted extensive market research and realized that most customers prefer a product that has minimal content and for that reason our new product has been designed to be 100% fruit content to ensure maximum customer satisfaction.
The total capital requirement to launch the new product line for apple juice would range to around $15000 all risks accounted for.
The new apple juice will be a fulfilling product, bringing with it a fascinating taste with the most excellent and exotic touch to it. The mission is to have not only a tasty and enticing apple juice, but also to have a healthy product that will conform to all our customer needs and preferences since consumer satisfaction is our primary objective. Our apple juice will be the family choice for fun times, complement to other drinks and the number one juice in the market.Our product entails all factors in relation to quality and quantity and has also aligned to all standards of safety and health compliances.

Table of Contents

Keys to Success
Unique, Innovative & Contemporary: Coming up with a unique, exotic and innovative product with a natural taste and excellent packaging will differentiate us from the competition. The product will be a benchmark to other products and will be the ultimate choice for consumers.
Product quality: The quality of the apple juice is one to be adored and has taken a lot of research and innovations. Consumer preferences have also been taken into serious considerations.
‘Spice of Life' Menu: To be the best in the game, we have developed our own secret recipe that has been tested and loved by our customers. We have embraced nature and allowed our product to retain its natural ingredients and taste to the maximum.
Employee Retention Focus: The primary focus will include employee retention and their development as part of the vision to attain success of the business hence ability to draw seasoned and elite professionals and build an elaborate work force. We have also budgeted for a stock option program for Production Management positions to subsidize a lower salary base. This will reduce our immediate overhead and attracts high quality staff.
Cost Control Focus: controlling costs is vital at all times and without exception. Henceforth, it will be an integrated function of the new product line from inception. main concern will be about managing the numbers that is interpreting and comparing every number which will impact the bottom line. 80% of the success of a product is determined before it opens. Reduction of the cost of our new products sold will form our main focus so as to meet our profit margin goals. This will only be actualized by managing the following crucial elements of cost: Purchasing, Rough Preparation, Issuing Inventory, Storage, Preparation, Portioning, Receiving, Order Taking, Cash Receipts, Bank Deposits and Accounts Payable.  The firm will use the production business plan to track actual costs and compare them to the forecasts in managing the business.
Because of intense competition, the firm has looked for ways to differentiate our product to achieve and maintain a competitive advantage and our overall goal is not only to have a product in the market but also to have a brand that everyone can associate with and trust to be the best and fully satisfying.
Anthony and Orchard projections for the first three years of operation of our new brand of apple juice include:Keeping production costs low below (35%) and improving on the Gross Margin. These are attainable targets by expanding our marketing and advertising to increase our customer base and achieving maximum profitable investment return for investors for Years.
About the Company
Anthony and Orchard is a wine production that has been in the business and has produce quality products. The company has over time improved its products and also introduced a lot of products to the market that have done well and have over time been considered consumer favorites. The company has also been able to venture and succeed in other brands like whiskey and considerably achieved a milestone in the market. It is actually considered as one of the best liquor production companies with the way it has been able to integrate various variety of products and still achieve maximum success. With the introduction of apple juice production, the company is yet to make yet another milestone.
The Management
The firm’s management team has over 48 years of experience in production management, finance, business management, and marketing arenas. The management of the company also concentrates on efficiency and accountability that means very qualified personnel who are well trained in production handling. There is also constant supervision to ensure quality and health standards are conformed to.
Company Ownership
The fruit juice production company will start out as a branch of the Anthony and Orchard. The management has an outstanding relationship in the production industry. The line manager has a history in Systems and Business Management, and is certified in Production and sales Management. The ultimate plan is to ensure that the fruit juice production industry also becomes an independent entity after several years of production to increase capacity and products.
Start-up Summary
Anthony and Orchards finally decides to introduced a new product to the market hence resulted to the production of apple juice. The initial set-up costs are mostly expensed equipment, furniture, painting, reconstruction, rent, start-up labor, machinery that include the apple press that was costly, and legal and consulting costs associated with research and innovation. $97,000 will be allocated for business operations reserve at the start of the business. This is a vivid forecast based on our knowledge, experience and our market analysis in the industry.
The firm will make the following purchases of current assets during start-up:
Apple press: $ 32250
Blending facilities:$16,000
Packaging materials: $ 8,378
Important Office Equipment $ 8,500
Long-term Assets in the amount of $ 86500 include all storage equipment, warehouses and transportation facilities.
The shareholders have injected $91000 of capital, plus a $30000 loan guaranty. We will be seeking $ 2,000 of equity investment to fully fund Anthony and Orchards startup costs.
Financial Plan
Anthony and Orchard new product financial model will be in regards with a business concept that incorporates both risks and successes. The financial plan has been approached as follows:
On our first year we project and anticipate low sales volumes which will help us ensure sufficient financial planning to accommodate a reasonable ramp-up period, and business success, also ensuring that we do not enter this venture under-capitalized (Atrill & McLaney, 2011, pp. 355-401).
The shareholders are personally committing $ 9,100 of capital, plus a $30000 loan guaranty. We will be seeking $20000 of equity investment to fully fund the production startup costs in installing the apple press, attaining a license, legal fees, working capital, marketing and personnel. Anthony and Orchard has also funded expansion of the business through the sale of its liquor and wine products.
 The Financial Plan includes:
Risk Analysis
A Mitigation Plan
Sales projections
Profit and Loss Statement
Important Assumptions
Break Even Analysis
Cash Flow Statement
Balance Sheet
Investment Opportunities
Important assumptions constitute our financial plan, most of which are covered under our financial statements that follows. A lot of caution has been taken with our projections, and we have established contingency plans for all manageable risks. The key underlying assumptions are:
Slow Economic Recovery. Recovering from economic recession and low growth in the economy forms a big part of our projections.
Business Growth
Annual Growth Rate Percentage - We also project a modest growth over the coming years. The financials account for the following growth projections:
o Year 2: 7%     Year 4: 5%
o Year 3: 6%     Year 5: 5%
 Pricing & Cost Control
Competitive Pricing Model – a competitive price comparisons and established price values in the current marketplace forms the basis for revenue calculation. The following are baseline assumptions on Average Check Totals, and Average Seat Turns: the product has been divided into quantities that range from 350ml, 500ml, 1 litter, 2 litters and 5 litters in relation to customers’ requests. Therefor the price ranges from $2 and $10 depending on the quantity and will be available in all retail stores and shops not forgetting the malls.
Cost Control.Percentage of sales has been used to calculate the cost of goods and these costs will be monitored on a daily basis in order to keep Cost within the range of 31 - 33%. With a focus on Cost Control.
Inventory turnover and Accounts Payable– The firm’s Accounts receivable turnover is calculated to be 0 days, as payment is rendered with service. Inventory is turned on a 7day cycle as inventory is used daily within all categories, and accounts payable are projected to be 30 days.
We have budgeted to support the Worst-Case business scenario at all time. We addressed the financial risk as follows:
The break-even for the month.
Worst-case financial shortfall calculations based on the ramp-up sales percentages for the month outlined in our financial assumptions.
We budgeted an operational shortfall in an operational contingency budget that we will utilize if the need arises.
 We will be recruiting a seasoned production manager and chief engineer (national search) whose style is in accordance with the Anthony and Orchard concept and our market segment. An equity interest to our select production manager will be offered to maintain the industry knowledge.
We will contract accounting services to a firm specializing in accounts and management (Komakech & Emmanuel, 2010, pp. 477-504).
Cash Flow Statement
An assumption on the cash flow for inventory turnover and payment days has been made. We do not offer sales on credit, so our cash flow does not track accounts receivable. We have a same-day collection projection which is critical, and is reasonable and customary in the restaurant industry.

Balance Sheet Statement
This is the balance sheet for the company’s income statement
Cash/investments                                                  $30000
Accounts receivable                                              $25000                                            
Inventory                                                                $40000
Prepaid                                                                   $19000
Net plant and equipment                                         $50000
Total assets                                                            $164000
Line and credits                                                     $20000
Trade payables                                                       $20000
Accrued expenses                                                   $15000
Officers notes pay                                                    $5000
Bank debt                                                                 $30000
Total liabilities                                                        $100000
Equity                                                                      $64000
Total liabilities and equity                                       $164000
Debt to equity ratio from operations                         1.64

Key Assumptions
The proposed financial statements for the first few years of the company’s life are based on several assumptions:
1) Perhaps the key assumption in all company plans is that sales can begin after three months of the business officially beginning operation. This assumes the product that results from senior design can be finalized in the first six months after graduation and tested in the first three months of operation.
2) The team also assumes that the market for this product will grow in the first few years of operation. No marketing costs have been added into financial calculations because business is assumed to be growing off low-budget advertisement by salaried employees (through calls, emails, etc.).
Expansion, Payback & Exit Strategy
Our Exit Strategy has been viewed as a definition of our business vision and goals so as to address this question. The firm also has a counter measure in case the business is unsuccessful and we have well elaborated this in several levels:
Expansion as a Business Goal
We have set up a multiple financial goals to ensure success of the Apple juice concept, and compound the profit return for Anthony and Orchard Investors.
Expansion (Option 1): Our overall goal to maintain Anthony and Orchard apple juice as a unique and rare idea. The business will have attracted huge market shares by the end of the first year based on the forecasts. In addition, the second year brings increase in sales and profit margin to sustain the addition of a full-time General Manager. By second quarter of the second year, the shareholders will anticipate to venture into a second fruit juice concept (Lockett, Moon, & Visser, 2006). This will be another unique fruit juice idea with maximum growth potential. This venture will be considered with our financial bankers and Investor partners.
Expansion (Option 2): The firm has stayed focus that Anthony and Orchard apple juice would be successful as a larger venue, in that a greater sales capacity and revenue potential has been projected. The firms plan to negotiate on lease and the site selection is to ensure that it has the ability to expand its brands.
Private Sale: Making money is our part of our primary goal as a business. At the close of Year 3, we see Anthony and Orchard apple juice as meeting 80.4% of its optimum sales potential with the current seating and space allocation. With this the business debts are reduced, profit margins are increased and Anthony and Orchard apple juice has established market share. We will look at the private sale of the majority interest via A) Leveraged Buyout, or B) A larger apple juice production consortium (Lockett, Moon, & Visser, 2006). In regards to both cases, our interest remains to deliver maximum and healthy profits to the shareholders and all other stakeholders Sales and profit margins will be based on the apple juice brand valuation in the third year.
Financial Solvency: an exit from the business will be achievable over 3 years according to our financial forecast, for the operating capital line of credit. Under a relative real case the Company should have over $70000 in cash in the bank after income taxes the second year. The entire financial debt would be retired by the third year.
Exit Strategy to Retire the Business
We at Anthony and Orchard are committed and in line with our concept and its achievability. We possess a lot of confidence as we enter into this venture and the success of our respective prior business efforts. No one attempt a business anticipating failure, however sometimes ventures do not fulfill their projected results.
In the case when there are no profits and retire the encumbrances in this business venture, the firm will first attempt to sell the operation and use the returns to clear all outstanding balances. In the event we are unable to sell the operation for sufficient returns we will forced to default whereby the loan will be in senior standing. All the shareholders will bear the remaining outstanding balances on a weighted percentage basis of the total amounts due.
Marketing Plan
A market research was conducted and the business based around our consumers instead of building a business around a preconceived concept. Our market analysis identified the following to be key drivers as areas of opportunity to service our customers:
Portion Selection:  Anthony and Orchard Tapas concept is built to offer different- sized portions. Our customers want the brand that they are sure will satisfy their quench and cravings.
The Experience: Customer satisfaction with juice products has been and continues to be of utmost importance, but our findings indicate that most fruit juice consumer prefers natural and fresh juice with minimal if no chemical compositions. An experience with healthy and certified quality juice is also factors in customer decisions.
Reasonable Prices: Anthony and Orchard apple juice is priced at a mid-tier level. In addition, we will have an extended Appetizer selection priced competitively and allowing budget refreshment in a full-service restaurant, shops and malls.
Market Segmentation
Anthony and Orchard has a vision to reach a wide customer base. We have defined the following groups as targeted segments that contribute to our growth projections:
The well-off
The travelling Customer
The middle class
Sick patients
These particular market segments are 25-45 years old, have disposable income, and are seeking upscale, trendy, healthy, tasty and exotic refreshment fruit juice. These are the types of people who make a huge amount of purchases of juices and soda. They are likely to spend more on experiences they perceive as unique, classy, and sophisticated. They are also the most open to trying something new, like our new sophisticated apple juice.
Anthony and Orchard Marketing strategy will be to promote our electric and rejuvenating fruit juice, superior service, and exciting concepts to draw in the all our customers. Marketing initiatives will concentrate on the following;
Building and Signage:
One of the most important Marketing tool that we have is the exterior of our retail centers, and our new sign. We budgeted a great deal into the renovations to generate the aesthetic appeal of the new apple juice. See attached Logo and Web design.
Customer Service
Customer service has been regarded the major draw for the dining clientele. A perfect customer service system will ensure that our customers are contented and desire to come back for more of our services and products.
Our wait-staff will be required to provide the very best in quality services to the customer, making certain that the product is available at all times at the right place, the right time and in the right quantity and quality. Wait-staff are thoroughly trained, and every 90 days they undergo a performance appraisal. This is part of our Employee Manual, and Operations Manual guide.
c) Product promotion and Advertising
The product promotion we have in mind aims at targeting clients directly through the useof local publications. This will reach a large population of our target customers both locally and internationally. Extensive media promotion has been outlined to be the key to success of our new product. Enthusiasm and aggressiveness must be exercised during the product promotion and advertisement so that the target market can be attracted and retained. A considerable amount of budget has been allocated for the first year specifically. Creation of the a Media and customer buzz magazine for the month preceding the months to the planed grand opening will help prepare the market for this new product.
The Marketing Program
1. Media Objectives and Strategy
Establishing a unique image as the leader of juice production is our priority. We must assure value; quality and cost are attained and retained. Maximization of efficiency of promotion will be achieved through
Selection of primary business publications with high specific market penetration.
Redirection of customers to our company website to register for upcoming functions, list for VIP, list of reservations, and flash media promotions.
Planning adequate frequency of ads to influence market with relevant menu items and promotions items.
Where possible, position advertisements near entertainment or food related editorial.
In addition, a plan to develop a consistent outreach throughout the year that tart get a specific group of customers or market segment. The advisement should cover a customer segment within a five-mile radius, and new 'suburbanites,' who still appreciate in-town dining.
2. Promotional Campaign
The most successful approach to reach our targetedclients includes developing a detailed and intense advertising campaignthat promotes our apple juice concept Spice of Life. In addition, we will gain a considerable recognition through newsletters, newspapers, public announcements and other public platforms. We shall encourage customers to visit our company website to be created with a flash media intro that highlights our delightful new apple juice.
3. Press Release and Grand Opening
 Anthony and Orchard will have a number of press releases on the Grand launch of our new product
4. Editorial Visitation
After the grand launch and the first two quarters of sales, influential reporters and editorial groups will ne invited; from both local, national wide and international media houses. In addition, the general public will be represented in the invites.
5. Community
Anthony and Orchard will look for key opportunities to pair with local community development organizations and radio stations to interface with our customers.The firm intends to participate in local community programs, in order to better our community, and give back to our esteemed community.
Sales Strategies
We have a straightforward and simple strategy that includes to the success of our new business line by giving our customers a combination of delicious and healthy and satisfying apple juice in a great environment that is appealing combined excellent customer service, whether on their first visit or for common purchasers of the product.
We have designed our strategies to convince critics and new customers into our loyalty customer list. In addition, our sales strategies will take the next step at encouraging customers to become repeat customers, and market our products to friends and family through sharing their great experiences achieved though consuming our product.
New fruit production industriesin most cases make two major mistakes; firstly, being unprepared or underprepared that leads to poor opening image, initial poor service, speed, or quality discourages customers from returning. Secondly, they spend most of their resources in their opening process then unable to maintain the initial quality customers expect on return visits, decreasing word of mouth advertising and leading to poor revenues(Neely, Bourne, & Adams, 2003, pp. 22-28).
Anthony and Orchard strategy of sales requires a consistent in quality, service delivery that ensure speed and customer satisfaction. This will be achieved through.
Hiring those employees who genuinely find pleasure in their jobs and appreciate Anthony and Orchard unique offerings
Having a personal interaction with customers so as to know and understand their needs. Feedback is very important for planning and improving product quality.
Having a continuous assessment of quality aspects discussed above and making recommendations to identified challenges.
Evaluation of food choices for popularity, and keeping favorites on the menus as we specials and rotate seasonal foods.
The competitors will be coco cola Soda Company and Pepsi.
Anthony and Orchard competitive edges are:
1. The shareholders critical understanding of opening and running a new product line.
2. New high-tech and modernized infrastructure and machinery.
3. Internationally certified and assured healthy drink.
4. Unique, 3-Tiered spatial layout
5. Employee Training, Incentive and Retention program
Using our competitive edges, we plan to outdo our competitors and get a large market share of customers visiting all our retail outlets.
Management Plan
The strengths of our management teamis the ability to make projections for planning for success. We will assemble a team that embraces different fields, disciplines, professionals and accomplished expertise in all areas of the business, including marketing and juice manufacturing.
The owners have longtime experience in the food and hospitality industry. In Year 2, we will hire a Manager (General Manager) to handle the routine production management of our future added brands of fruit juice. This will assist Anthony and Orchard to grow even further.

Management Team
Anthony and Orchard has numerous loads of experience ranging from dealings with employees and customers aids in understanding the importance of a strong management team. Our management team’sstrengths will position us for success.
Mr. Hunte, the manager of the business brings to Anthony and Orchard an accomplished fruit juice production background and a life-time passion for the production management experience. He has experience in business management in the Information Technology industry for over 15 years and will be a perfect acquisition. Like Information Technology, successful ventures in the production industry must balance maximizing on new trends with continual assessment in quality. Hunte understanding of daily cash flow planning and staff management as well as fruit production will be critical to Anthony and Orchard apple juice production financial success. Mr. Hunte has a strong background in International Business Management and Business Start-ups process, and is certified in Restaurant and Hotel Management. He will be responsible for overall direction and operational management. Mr. Hunte is an able business leader who is responsible for strategic planning and continued growth of production and packaging and also the business development. In addition, Damien will be the management lead for all financial, public relations and investor services.
Apart from the management of dailybusiness operations, both managers will oversee productdesign and development, portioning, purchase, pricing and inventory control. They are responsible for the overall financial wellbeing of the company.Both managers will be responsible for coming up with a plans, developing, and establishing customer service policies and objectives, writing, explaining, and enforcementof an effective employee's manual guideline for all employee-related policies and guidelines.
The responsibility for hiring and firing employees is in the hands of the two operational managers and decisions regarding the issue will be made jointly.
The two operational managers will
Be in charge and take account of all the working capital, including receivables, inventory, cash and marketable securities.
Take part in financial forecasting, including cash flow analysis, capital budgeting, pro forma financial statements, and external financing requirements.
Come up with financial analyses of operations for guiding management, including reports which outline the company's expenses, income, and earnings.
Preparation of budgets and financial forecasts and arrange for audits of company's accounts.
The management ream shall be in charge of book keeping, financial Management, Public relations &Media Advertising, and Investor Services. The management will also be responsible for managing the day-to-day operations of the restaurant.
Mr. Hunte will be the overall production Manager. He will be in charge of the daily Production Operations. He will also take lead as the Executive line manager for the apple juice working with the chief executive officer of Anthony and Orchard.
To help Mr. Hunte, captains who have experience in managing, fruit blending mixing and adding flavor) and take care of service and make sure the company is in excellent shape.

Anthony and Orchard have outlined a perfect strategy to ensure the success of their new apple juice in the market. The company has allocated man power and capital to initiate the product into the market and to ensure maximum response from customers and a competitive advantage. However, there are a number of things I would recommend to the company to ensure maximum profits and competitive advantage and also to ensure that the product life of the product lasts as long as it was intended or even surpass.
I recommend that the company should have introduce another fruit juice to complement the sale of the apple fruit juice since a lot of people prefer different varieties of fruits to apple. This would increase sales and complement the sales of the apple fruit juice in case some people would prefer otherwise.
The company management should add more staff to the production of apple juice so that production can meet the demand in the market.
The company should company should do a competitor analysis so as to know their strength and weaknesses so as to be able to capitalize on their competitor’s weakness and also improve on their strengths so as to have an ultimate competitive advantage.
I recommend that the company should set up an effective and efficient customer care department that will ensure that customer requests and demands are attended to on time and with a high level of professionalism so as to ensure customer satisfaction and ultimately high customer retention.
I also recommend that the company should conduct a massive awareness and advertisement campaign to create awareness of the new product in the market. Promotional activities and corporate social responsibilities can also be used to create awareness across.
I would recommend that the company should also benchmark from leading brands in business to get new and better ways to make their product enticing and acceptable to the customers. This would allow them to have a competing edge with more established companies in the production of fruit juice.
Anthony and Orchard has established a bold move to venture in a fresh field that is the production of apple juice. The company will have to face the challenge of high cost of capital to ensure that the production plant has been set up and is functional. The company on the other hand has outlined a detailed business plan to ensure the success of the project. The company has also outlined contingent measures to ensure risk management and risk mitigation in case of challenges. The company has also established an able management to ensure maximum control, planning and organization of the new brand line. This is in view of achieving maximum returns from the product at the most cost efficient manner and in view of attaining maximum customer satisfaction. The analysis of the company’s projections shows that the chances of success of the product is high due to the well laid down plan of action and proper planning both in relation to capital, human resources and the infrastructure for production.

Atrill, P., & McLaney. (2011). Accounting and Finance for Non-Specialist, 7th Edition. Harlow: Prentice Hall.
Komakech, S., & Emmanuel, C. E. (2010). Towards a better Understanding of Capital Investment Decisions. Journal of Accounting and Organizational Change 6(4), 477-504.
Lockett, A., Moon, J., & Visser, W. (2006). Corporate Social Responsibility in Management Researh: Focus, Nature, Silience and Source of Influence. Journal of Management Studies, 115- 136.
Neely, A., Bourne, M., & Adams, C. (2003). Better Budgeting or Beyond Budgeting: Measuring Business Exellence.

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