Business Plan Assignment Sample 1: Exporting Refurbished Computers to Mexico

Introduction

            Computer ownership in Mexico remains relatively low. Estimates indicate that only 15.84 million people in the country, which has an estimated population of 128,932,753, are equipped with a computer (Martínez-Domínguez & Mora-Rivera, 2020). As such, there is an increasing demand for personal computers. Nonetheless, a significant percentage of the population cannot afford quality computers because of affordability issues. Thus, this business plan explores the possibility of exporting cheap refurbished personal computers to Mexico. It includes company details, marketing, and advertising information, and the projected financials and growth potential.

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Company Information, Mission Statement, and Product/Service

            The company’s name will be “Ace International,” a technology company specializing in the export of affordable personal computers to Mexico. The company founders shared a common belief that access to personal computers at home is vital for development. Mexico is a country that has been plagued by poverty, making computer affordability difficult for many. Therefore, by making computers more affordable, the company will positively affect the lives of many people while at the same time allowing the founders to enjoy a small profit. The company’s headquarters are to be located in the United States. It will have approximately ten employees at the start.

            The company’s vision statement is “To make humanity thrive by increasing the affordability and accessibility of personal computers while preserving the environment.”

            The company’s mission statement is “Dedicated to ensuring all households have access to a personal computer.”

            The primary product that the company will offer will be refurbished computers. Each day, thousands of computers are disposed of in the United States and other developed nations. Most of these computers are in relatively good condition and only require some refurbishment and minor repairs. Therefore, Ace International will acquire computers that owners in the United States want to dispose, repair, and refurbish for resale in the Mexican market at a relatively lower price than the prevailing marketing prices for computers in the Mexican market.

Marketing and Advertising

Copy of a Logo

business plan logo

What is the market for your global small business? Include regions served and competitors.

            The market for the global business is 83,936,826 people. These are individuals aged between 15 and 64 and are active internet users. They are highly likely to purchase personal computers for their own use (Martínez-Domínguez & Mora-Rivera, 2020). Furthermore, there are numerous competitors in the Mexican market. Among the most notable are Plaza de la Tecnología, Grupo Tecnocomp, Mercado Libre, Walmart Mexico, Coppel, and Best Buy Mexico. However, it is imperative to note that most of these competitors only sell new personal computers, which are not within reach of most consumers.

Describe the commercial that you would create for the product or services offered. Where would you place your advertisement (e.g., social media, TV, radio) and who is your target audience for your advertisement?

            The commercial that one would create for the product offered is a banner and a video for placement on social media. Social media marketing is not only highly effective but also relatively affordable compared to the mainstream media. According to Sumathi and Gunasundari (2016), marketing a product to prospective customers and suppliers is integral in the contemporary, complex business world. For the venture to succeed, it will be imperative to have superior videos and banners for marketing on social media platforms. The suppliers will include individuals in the United States, while the customers will be the households in Mexico. The target audience for the advertisement includes individuals aged between 15 and 64 years, who are in the medium income level and residing in urban centers. With social media advertisements, it will be possible to target the right audience.

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Projected Financials and Growth Potential

Financials: Include the projected operational, financial needs for your organization and the potential investments needed.

            The potential investment needed to start the business is around $490,000, which will be used for acquiring, refurbishing, and shipping personal computers to the country. The amount will also cater to the administrative and sales expenses during the first year of operation.  These will include establishing an office, warehousing facility, getting the appropriate approvals and permits, and the initial workforce for dispatching the refurbished computers. Furthermore, the amount will also include the initial amount required for the placement of advertisements on social media platforms.

Growth Potential: Include projected financial and market growth of the company for the next five years.

            For the next five years, it is expected that the company will continue growing due to its popularity increasing in the Mexican market. Some of the reasons for the increased popularity of the brand in the Mexican market will include more investments in marketing and advertising during the period. Furthermore, based on the projections, the company’s profitability is expected to continue growing over the next five years. For instance, during this period, the company will observe corporate social responsibility and ethics, including shaping its culture to focus on social responsibility rather than profits alone (Fassin et al., 201). In return, this will enhance its growth in popularity of the brand and consequently profitability.

Financial Projections

Year 1

Year  2

Year 3

Year 4

Year 5

Units Sold

         4,000

        6,000

           8,000

        10,000

         12,000

Price per Unit

 $         150

 $        155

 $           165

 $          168

 $           172

Sales Revenue

 $  600,000

 $ 930,000

 $ 1,320,000

 $1,680,000

 $ 2,064,000

COGs

 $  240,000

 $ 360,000

 $    480,000

 $   600,000

 $    720,000

Gross Margin

 $  360,000

 $ 570,000

 $    840,000

 $1,080,000

 $ 1,344,000

Adm. Expenses

 $  100,000

 $ 150,000

 $    160,000

 $   160,000

 $    160,000

Selling Expenses

 $  150,000

 $ 170,000

 $    200,000

 $   200,000

 $    200,000

EBIT

 $  110,000

 $ 250,000

 $    480,000

 $   720,000

 $    984,000

Tax Expense (21%)

 $    23,100

 $   52,500

 $    100,800

 $   151,200

 $    206,640

Net Operating Income

 $    86,900

 $ 197,500

 $    379,200

 $   568,800

 $    777,360

Conclusion

            Therefore, the Mexican market has considerable potential for refurbished computers. Computer ownership is relatively low, and a significant percentage of the population cannot afford new computers. On the other hand, many computers in good condition are disposed of each day in the United States. Thus, Ace International will acquire these computers, repair and refurbish them, and resell them at a low price in Mexico. The target market is more than 83 million people. Social media advertising will be used, and it is expected that the company will experience revenue growth during the first five years of operation.

 References

Fassin, Y., Van Rossem, A., & Buelens, M. (2010). Small-Business Owner-Managers’ Perceptions of Business Ethics and CSR-Related Concepts. Journal of Business Ethics, 98(3), 425–453. https://doi.org/10.1007/s10551-010-0586-y

Martínez-Domínguez, M., & Mora-Rivera, J. (2020). Internet adoption and usage patterns in rural Mexico. Technology in Society, 60, 101226. https://doi.org/10.1016/j.techsoc.2019.101226

Sumathi, V., & Gunasundari, K. (2016). Problems faced by the women entrepreneurs in India. International Journal of Management Research and Reviews, 6(3), 348–354.