Business Plan For Duncan Allaway
Introduction This is a business plan to start a new company based in the South East of England. It will mainly be a distributor of Sicpa Inks, but it will also be a supplier of blankets, chemicals and other pressroom sundries. It will show how I intend to replace Cooks Printing Inks, build from the customer base and then establish ourselves for future trading and development in the next two to four years.
Executive Summary This will show a history of the Cooks Printing Inks and how it is run, the staff and management team. It shows the current customer base and the proposed new target areas and accounts, showing future objectives and targets for growth. I would like to take over as many of the existing customers as possible and continue to supply in a similar way, but also to build and develop within these accounts by promoting a full product range and an improved service.
Cooks Printing Inks History Cooks Printing Inks has been established for 12 to 13 years. The company is owned jointly by Mr & Mrs Cook. The company has a good reputation within the trade for reliability and support. Cooks Printing Inks are the south-east distributor for Sicpa Inks. These inks are manufactured in Belgium and Finland. They also supply blankets, chemicals and sundries, which are obtained from several other suppliers in England. The turnover for the last tax year was £870,000. The business is now spread between a fairly large number of customers ranging in all size’s and with various spend levels. Although 20% of the customers provide 80% of the company’s turnover. The nature of the business requires a varying level of direct contact and relationship building with all customers to maintain and develop any new and ongoing business. Cooks Printing Inks currently offers a very good product range and at a competitive rate. The delivery service is adequate. The company consists of five staff. The majority of administration, such as invoicing, salaries VAT etc, is currently carried out by Mrs Cook. The factory manager organises and runs the business on a day to day basis. He deals with ordering from the suppliers and handling stock levels. All the staff are happy to multi task and provide cover for each other working as a team. As Mr Cook has been suffering from poor health for some time, and has not been able to be in front of his customers, this has reflected in his sales figures. A level of his business has been `drifting away’ for some time which has created the current situation. Mr Asquith-Brown is the other member of the sales team. He has been with the company for just over two years. He joined the company with a lot of experience and a very sound knowledge of the industry. This is now being reflected in his sales. I have been with the company for nearly six months. My sales are now moving on target and hopefully will continue to develop. Many of the new customers are people I have built relationships with over the years, and are now supporting at Cooks Printing Inks.
Current and Intended Market Cooks Printing Inks has traditionally had a fairly small customer base, with a select few making up a large proportion of the company turnover. In recent months the company has seen some of these larger customers stop buying or greatly reduce their spend levels. Although Paul Asquith Brown and myself have brought in a level of new business, this is not reflected in turnover as it has only replaced the lost business. Should Cooks Inks cease trading then it will be my intention to take over the existing customer base. This would provide a solid start. I would have to ensure that these customers spend levels do not go down any further. This will be achieved jointly between Paul and myself. We will ensure that a high level of service is maintained and that their pricing structure is in line with current market levels. We must recognise our limits. We will not compete in the very large accounts against larger suppliers. We would offer a more personal service though. So for new business I will target the `middle size’ printers with a lower annual spend. This will have several benefits. The amount of competition within these customers is less with fewer competitors calling in. This makes the selling price higher and so profit levels will also be higher. The credit terms are normally better, so the risk is reduced if the spend stops or in extreme cases, a debt is taken. These customers are often more loyal and there are a lot more of these sized printing companies to target in our area. Cooks Printing Inks concentrate mainly on inks. Whilst the other products such as blankets and chemicals do have a lesser spend total, any printer will require them each month. So if a van is going to deliver inks, why not put on blankets and chemicals as well. New business is always easier to build from existing customers. Also the customer benefits from only having to raise one cheque each month for their supplies. Within a twelve-month period I would like to recruit another established sales person who will bring immediate business with them, thus reducing the initial outlay. The person I have in mind, I recruited at my previous company. He is a wellestablished successful salesman and he does have an interest. Delivery times are essential in today’s market. The current location of Cooks Inks is sufficient for most of their current customers. But already I am experiencing some delivery problems as my customers develop in different areas. Whilst a main branch would be based in a similar area to Cooks location, I feel one or two satellite branches would be needed as the business grows. Maybe one on the eastern side of the M25 and another on the west to supply the west London area and the M3 corridor. At Cooks the sales staff are not shown any sales figures or achievements. They are paid a basic salary without any commission. I will introduce a system to the sales staff will be given an annual sales target. They will be required to prepare target accounts and have to specific targets in each of these. These will then be reviewed on a regular basis establishing why we did, or did
not get the business in any given account. Then with this information, a salesman can then go prepared into the next account. Competitors Currently when I visit an average printing company on my area to introduce myself, most people have never heard of Sicpa Inks. Whilst this does make it slightly more difficult to start with, it does have benefits. In the market there are only a few main competitor suppliers. They are: Harper Printing Inks Gibbon / Sun Chemical Keane Graphics Stehlins Shackell Edwards Bousfields Most printers have dealt with at least several of these suppliers, if not all. If they do not buy from them now, they have done in the past. We can and do promote ourselves as offering something new. This policy has been successful so far in the accounts I have called in, although it does take slightly longer to get the first order. At the moment we have no more than 1 or 2% of the print suppliers market. This does however leave 98% to target. If business is hard to get, it also makes it more secure. If we have to work hard to get the customer to change from their current supplier, then as long as we service the account well, then it will be just as difficult for the next person who calls in.
Promoting ourselves and Sicpa Inks In my experience, advertising the company and its products brings a very minimal return for a large outlay. The business normally comes from a relationship that is built between the buyer and the sales person. Because the nature of the business requires a lot of contact, the relationship is essential. Printers by nature are generally disorganised. Their customers demand a fast turnaround of work but they hold very little stock. We as a supplier, have to be able to get the products in to them, as and when they are needed. In effect the sales person and our company have to be reliable. I feel money is better spent on providing a reliable service and a quality product.
Objectives Targets will be set for every department. I believe if someone has a target to work to, it will motivate and directs him or her to work more efficiently. This is necessary to maintain growth. Maintain existing customers and business, which were formerly Cooks Inks. Credit Terms. Ensure customers stay within their limit. Do not offer 90 days except under special circumstances. Within eighteen months or two years consider adding UV inks to our range. This would mean training and/or recruiting someone from that side of the industry. This person would need to be well established and have a good customer contact base. Target new customers, with set objectives. Set up pricing structures with maximum levels of discount. All high discounts will have to be approved by myself. Improve delivery service. Currently everyone does some delivering and it is never consistent or at a set time. This also takes staff away from their main roles. Today’s market requires a better faster service.
Growth and Targets The products an average printing company will purchase each month can be broken down into three categories. Each category has a different level of profit and each is a different level of their total monthly spend. They are as follows. Ave. profit 25 – 30 % 30 – 40 % 20 – 30 % % of total spends 60% 25% 15%
Ink & Varnishes Chemicals & Sundries Blankets
Targeted turnover is based on taking over from Cooks Inks and is set as the total company turnover. Each salesman bringing in an annual increase of approximately £100,000 sets the annual growth. Cooks Inks current turnover is approximately £850,000 Year 1 Year 2 Year 3 Year 4 £ 400,000 £ 650,000 £ 800,000 £ 1,000,000 Set with just Paul & myself on sales Another salesman included UV salesman included
We would require a factory of approximately 1,000 to 1,500 square feet.
Conclusion Cooks Printing Inks have always been successful and have earned a good name in the trade. They offer a good product and up until recently, an adequate service. Mr Cook has always relied on the loyalty of his long-term customers. Due to poor health and his age, Mr Cook has not been out in front of his customers for at least a couple of years. Business is now reflecting this. Mr Asquith-Brown and myself are now bringing a reasonable level of business. The difficult part of getting known in Mr Cooks long established customers and getting a foothold in potential customers is now done. Using our experience and energy we would now like to take an opportunity to start a new company and build a solid foundation establishing ourselves Sicpa Inks into the UK market thus securing our future.
Work History Duncan Allaway I have been working in the print trade for 24 years. After leaving school, I served a four-year apprenticeship at a printer’s in Sussex, finishing with a City & Guilds qualification. I then worked for seven years at several different sized printers in the London area, gaining experience and knowledge from these different companies and of the trade in general. I moved into sales and selling to the trade at the age of 27. The first sales company I worked at for four years. This mainly involved maintaining and developing their existing company accounts. Then I was approached and offered a job at Harper Inks, who are based in Redhill in Surrey. I worked there for ten years. At the start I had to develop a totally new area. This involved cold calling from the outset. After five years I had built up an annual sales turnover of £800,000 from my own customer base. Then as the company was growing I was promoted to sales manager and initially put in charge of four fairly new salesmen. I had total responsibility for them achieving their targets as well as maintaining and developing my own existing sales. Two years later I was promoted to National manager. This involved managing the company’s other branch, which is based in Leeds and had two salesmen working from there. I was responsible for setting each individual’s sales targets, each branch target and the company’s overall annual sales target. These had to be set for each salesmen for each month and then annually. Then I had to project a short term and long term target for the company. For example a two-year and five-year plan. I organised incentives and promotions for the sales teams to help grow their sales. I also set expenses budgets, which were based on each individual area’s profit. I was responsible for the advertising and the recruitment of the sales staff. This involved agreeing salaries, personnel terms and contracts. I organised and chaired monthly sales meetings. I also organised stands for exhibitions in both the UK and Germany.