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Business & Marketing
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English (U.S.)
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The Task Is To Write A Business Plan For A Firm (Other (Not Listed) Sample)


The task here was to write a business plan for a firm.


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Executive Summary
This paper will be a formulation of a business plan portfolio for a new start-up business venture within the oil drilling industry. The new business enterprise will be a formulation that shall be included within the TSXV Venture Composite Index to enhance measurement of performance of the securities as a requirement of the basic equity market ventures. The business shall target and identify potential acquisitions within the oil industry. The business enterprise has identified and proved that there are probable oil reserves in Alberta Province, where the company will have the potentiality of acquiring as a whole or partly as a qualifying transaction, while it will offer significant revenue potential within the oil industry. The primary focal point of the company will be acquisition of oil properties having proven developed reserves with economic attractions as well as investment in oil reserves having a robust upside potential. Within this plan, there will be an analysis of the management teams, the business model and the financial analysis for the business enterprise. The next section will be an analysis of the external environment for the business and the roadmap required for implementation of the business. The final section will be an analysis of the possible risks and ways of mitigation.
The Teams
This section gives a description of the management teams and the staff and the structure of the business ownership. The ownership structure will be a corporation, where the percentage of ownership will be put according to the contributions. The internal management teams will include categories for management, comprising of the research and development departments and the human resources department, where selection of persons will be based on the levels of professionalism. The higher management teams will be required to have at least a PHD in engineering courses, while they will be people having strong communication and interpersonal skills. The management teams will have a strong proven track record of performance with high levels of knowledge and connection for achieving what will be proposed within this document. The management teams will be the right one to successfully build the proposed business model since they will be required to have high levels of professionalism and those who have shown a successful record of performance within the oil industry. The table below gives the positions if higher management teams and their qualifications.
PositionAcademic QualificationsExperienceRecordCEOPHD in engineering20 yearsRaising significant capitalChief Financial OfficerPHD in Accounting15 yearsHas been the CFO within multinationalsExploration ConsultantPHD in geoscience15 yearsExtensive leadership in international leaderships and geological settingsGeneral ManagerPHD in administration15 yearsExperienced in upstream exploration and productionTable 1: Management teams.
3.0 The Business Model
This section will highlight the attractiveness of the business model for the oil industry. The model uses BMC as a way of providing readers with the visual portrait of the business model as shown below. The vision of the company will be to enhance growth through acquisition of new assets of exploration and production of oil within geographical locations that are carefully chosen, while employing professional expertise.
 INCLUDEPICTURE "/img/dragon-oil-business-model.png" \* MERGEFORMATINET 
Figure 1: Business Model
3.1 Growing Production
In growing production, the company will concentrate on exploration appraisal, where it will execute programs defined by high impact and near field. The key strengths within the development of commercial reserves as well as contingent resources having low-cost supply assets of oil. The major activities will be to manage critical situations by seamless transfer of projects that are manageable. The company will also concentrate on safe delivery of selective development projects. The operations of production and projects therein will focus on multiplication of cash flow as well as the increase of all commercial reserves.
3.2 Generating Cash Flow
The company will be a definitive factor in management of financial and business assets through enhancing the strength of having a generative cash flow, while there will be a clear path for clearing down debts. The company will ensure a sufficient system of liquidity for protection against any forms of down-turns in oil prices. There will be also a system of flexing assurances in capital expenditure. The company will also adapt the hedging strategy as a model for protection of the business venture from volatility in oil prices while the strategy will also be valid in maintaining sound relationships with financers.
3.3 Exploring Development
The company will maintain its process of building infrastructure for supporting the drilling program and oil production. The value for our customers will be generated through initiating a flexible drilling program founded on jack-up and land rigs that will reduce the costs of production and the eventual costs charged to our clients. The company shall also create value to consumers through reduction of its facility downturn. We shall ensure that the process of exploration targets sweet spots founded on 3-D seismic productions.
3.4 Building Portfolio
The company shall ensure that there is a system of increased production through continued research in potential exploration areas. It will invest in technology to increase the capacity of processing, while creating organic reserves for drilling and extension of boundaries. Above all, the company will ensure that there is a system of generation of cash from its operations that will be implemented through ensuring that it leverages and investment in profitable ventures.
4.0 Financial Analysis
This is the major part within this portfolio. The section will include a Pro Forma, which will describe the business practice and the minimum requirements for conformation of the norms within the business. The section will also include the calculations based on the canvas building blocks and an estimate of the number of consumers who will be acquired. Theism section will give the breakeven analysis, the sales scenario and the costs of operation. The capital spending calculations will also be included within this section as well as the funding requirements.
4.1: Funding Statement
The reason why this project needs money is that it has the potentiality of making profits as well as ensuring that there is enhancement of value for consumers within the oil industry. This project will need money basing on the fact that the oil industry has a high demand since it is the most efficient way of generating the measures of energy. In this regard, the money will be invested in a high demand industry, where the rate of return on assets is relatively high, while the payback period for the business will thus be relatively low. The type of money required for this project is the commercial bank money, which will be reached via bank deposits. The commercial bank type of money will be the best type as it will help the company in fulfilling its business appraisal project. The advantage of having the commercial bank type of money is that it will ensure safety, while the payments for installations will be done electronically. The money will be needed within the next two months, when the project scope has been set. The best source of money will be from bank loans and from investors. The table for the sources of funding and for general assumptions is as shown below:
Equity ContributionsManagement Investment$ 125, 000Total Equity Financing $ 125, 0000Banks and LendersBanks and lenders$ 100,000Total Debt Financing $ 100, 000Total Financing $ 225, 000Table 4.1: Sources of funding
General AssumptionsYear1 (%)2 (%)3 (%)Short-term interest rates10%1010Long-term interest rates10.0%1010Federal tax 333333State tax rate5.055Personal Taxes151515
4.2 Profit and Loss
The profit an loss account will be an analysis of income and expenditure within the first three years. Analysis of profit within a three year period can determine the essentiality of appraisal of the business. All the four levels of profit will be put into consideration, where the gross profit is the profit realized after all deduction of all costs. Operating profit will be the amount left after taking away the operating expenses from the gross profit. The profit after tax will be determined by considering what is left after deducting the financing costs and what will be left for the owners to spend and reinvest into the business. The table below gives a summary of the sales profit and loss margin forecast for the company.
Pro foma Profit and loss YearlyYear123Sales$655,000$710, 266$778,000Cost of goods sold$65,000$71,000$77,000Gross Margin$90.00$90.00$90.00Operating Income$598, 761$624,800$700,000ExpensesPayroll$240,000$ 250,000$253,000Marketing$10,000$15,000$18,000Administrative costs$14,000$14,800$15,500Insurance$7,500$8,000$9,500Licensure$12,000$ 13,000$13,500Rent and Utilities$17,000$17,500$18,200Miscellaneous$10,000$12,000$13,000Total Operating costs$310,000$329,800$339,700EBIDTA$ 212,000$251,000$271,000Federal income tax$70,000$74,000$80,000State income tax$10,000$11,000$12,000Interest expense$13,000$14,000$14500Depreciation$5800$6000$6200Net Profit$112,500148,500164,000Profit Margi...
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