Chain and Gear Business Expansion Plan 2014 Essay

Chain and Gear Business Expansion Plan 2014 - Essay Example The expansion will include the development of an e-commerce website to increase sells and customer service, development of five new products. The services we currently offer are limited to Used bikes. The new products are new bikes (hybrid and Mountain) from various suppliers, cycling nutrition products such as energy drinks, body armor and Pads from Dainese and finally, accessories and spares. Servicing and maintenance will be offered free for all bikes bought at the shop for a period of 3months from the date of purchase. We expect a gross Margin of 46% on the new products and an expected 40% net margin. The Break-even point is estimated at 710 units. With the changing weather patterns in the UK, sales are expected to be at peak levels in the summer months. Tour De France’s influence on cycling will be important with many communities organizing small events. Chain and Gear will optimize these events to promote its products and increase revenue. The annual expected revenue for 2014 is approximately  £1.7 million, supported by high sales of nutritional products and body armor and pads. Chain and Gear is a sole-proprietorship operating in London’s High Streets of Fulham Road in Chelsea. The company has been in operation for one year and with the increased demand in bicycles, it intends to expand its operations from a small used bikes shop to a high-end value brand with over  £1 Million turnovers annually. This expansion will see an introduction of five new products and a capital injection of about  £70,000. The total cash requirements for the business expansion will be  £84,000. With a capital injection of  £70,000 and credit facility of 60% of start-up inventory, the business will have sufficient cash flow to start.The intended will be funded by a loan of  £60,000 sourced from banks and a  £10,000 cash injection from the owner.