Introduction
In any business entity, stakeholders are the key elements to determine a firm’s performance by executing various metrics that are meant to improve the business’s portfolio and raise the returns on revenue (Hein, Meloni, and Tridico, 2020). Documenting the sales process and benchmarking the basic sales steps is important when a company wishes to have better profitability. This paper presents a comprehensive five-year business strategic plan for Paramount Maritime Safety Ltd.
Business strategies to Grow Sales
The company’s financial projections for €2020 shows that there were sales of €90,000 and the cost for the sales was €34,000, which gave the company €56,000 as profit. Paramount Maritime Safety Ltd. must indulge in a comprehensive plan that seeks to raise revenue by doing the following;
- Increasing the number of clients
- Increase the transaction proportion
- Increasing the rate of transaction per customer
Increasing the number of clients refers to the efforts Paramount Maritime Safety Ltd’s marketing team will put to bring more people to the company’s business. Thus, the sales personnel will be tasked with analyzing the value chain so that they target where the consumers are, what they want, and how it can be distributed. Growing countries such as Uganda that are landlocked can have a high demand for freight management services from the region’s ports (Macheiner et al., 2017). The more products and services are marketed, there is a guarantee to raise revenues.
The transaction size is a key area that Paramount Maritime Safety Ltd can consider. If the average sales per day are $10,000, it means when they increase the number of customers by 20% each day, the transaction size will grow to $12,000 daily. Furthermore, it is possible when customers are enticed to buy more (Macheiner et al., 2017). The report recommends the company consider fishing vessels products that can be bought on impulse purchase as long as the customer had initial plans. One way of increasing transaction size is to give buyers discounts when they accept extra items.
The company may consider increasing the rate of the transaction from an individual customer. This is possible by encouraging them to come often and promising them complementary services such as free delivery if they buy products such as container ships and tankers, among other major goods (Olkhov, 2016). If some customers come once per month, the company can make their visits once per week to raise the transaction rate.
Sales Forecast
The current sales for 2020 are €90,000, and assuming the previous sales were €75,000, the difference in the two figures would give the percentage rate of growth. Therefore, when deducted, the amount would be €15,000, and the percentage rate of growth in terms of profitability is 20%. Paramount Maritime will take the 20% as the growth indicator and calculate using the €90,000, which was the total sales for 2020. Therefore, it means 20% of €90,000 is €18,000, and consequently, they can forecast that by 2021 December, if the sales team is put in place, the minimum sales would be €108,000 (Todd and Jewell, 2017). Thus, using that trend, the company can forecast for the next five years, as shown below.
In the above projections, if the firm carefully evaluates the need to have a sales team that will combat all the market pressure and expand the market base, the total increase will be 148.8% after five years. The value comes after deducting the total forecasted sales for 2025 and deducting the sales for 2020 (Syetlova, 2018). The paper assumed that in 2019, the sales were €75,000 to give an idea of how the sales can be forecasted.
Forecasting on the Expenditure and Profits
The firm should increase the number of people working in the business and therefore, it means salaries must go higher than the current situation. Additionally, the cost of renting a premises with enough space will increase the rent. The commission must be higher because salespeople have a chance of bringing more business to the company. Other elements must also increase, as shown below (Ananda, Hernandez-Garcia, and Lamberti, 2016). The calculation is based on the forecasted sales in 2025, where the company’s sales shall be at 223, 948. The total projected sales, the cost of sales, and the overheads shall be deducted to get the net profit as presented in the data.
When the projected net profit is compared with the current one for 2020, the difference is €44,918. That translates for an improvement of 490% profitability after five years. For the firm to achieve this, marketing metrics must be addressed well, such as getting salespeople who can plan and implement the marketing process (Marchau et al., 2019). Advertising shall be made through the mainstream and social media, and that will cost the company. The other expenditures are indicated above, such as electricity, insurance, motor expenses, among others. A consulting firm will be in place to advise the owners on the moves that are required for the business so that there is a linear flow of business processes and actions.
The business will continue to expand, and that means cash flows will change gradually. The cash flows will be in terms of operating activities, investing activities, and financing activities (Levin and Lo, 2021). The management should ensure that the amount of money set to clear a given bill should be accounted for every time. For instance, as shown above, salaries, depreciation, net income, and insurance are elements that can be categorized as operating activities. Payment for the leased premises, any equipment that the company will purchase, or disposal of any property will be categorized under investing activities (Cherney, 2018). The cash flows from financing activities include payment of a loan that will be taken to execute the plan and dividends paid, among others, as shown below.
Customer Base and a Range of Services Offered
If the business wishes to expand to a higher level, there must be consideration of who to offer services and where. Apart from Plymouth, the owners, through the new workforce, can create customer networks through business correspondents in other parts of the world. For instance, the Asian region has a wide market where buyers are spread evenly within the area. People will be employed to load and unload cargo, operate the machinery, repair ships, and other water vessels, and work in port houses (Ananda, Hernandez-Garcia, and Lamberti, 2016). Therefore, Paramount Maritime Safety Ltd will offer those services to other firms in terms of outsourcing methodology.
Additionally, consulting services shall also be offered whereby any business entity that wishes to know the maritime business paraphernalia shall be assisted at a fee. The company will specialize in procuring vessels such as tankers, shipping containers, bulk carriers, specialty and fishing vessels (Macheiner et al., 2017). The management of the service provider shall be undertaken from the headquarters that is in Plymouth. To win more clients, there is a need to market the services to the African region, more so in South Africa and Nigeria because the countries have an improved economic system.
Business Strategy to Diversify the Products
Price segmentation would be applicable on aspects of buyers who purchase many products often. Additionally, it can be based on the size of the firm or organization seeking the products. Some organizations would want to engage in serious agreements on warrants, services from the selling company, among other perspectives. Thus, on this more, paramount maritime safety ltd can decide to increase the tariffs as long as that client is capable of affording them every time (Gnangnon, 2021). For instance, bulk carriers and shipping containers may have a series of steps and processes that must be bound on both parties and intermediaries. Therefore, it can be possible to relatively increase the price.
Product extensions are another way to diversify the maritime business. This means selling items such as bulk carriers can be from the different manufacturing companies and varying sizes of the product. Offering different fishing nets such as gillnets, seine nets, and trawls. These nets can be found at the store in different materials, colors, and sizes (Gnangnon, 2021). Additionally, Paramount Maritime Safety Ltd can decide to add to their portfolio some services such as training the entrepreneurs having small-scale businesses around the oceans, seas, lakes, among others, on how to strategize and gain a stable competitive advantage.
Other Issues to Address
The business shall be funded through a raft of considerations that will enable the transition forward. First, it is important to determine how much funding the company needs to leverage on all the possible metrics to achieve the objectives. Thus, from the realization, the company should invest in programs and get venture capital from investors. It is wise to invest in shares which are considered as growth investments (Tomlison, 2018). Owning shares will enable the company to be receiving dividends which will serve as one way to get money. The value of shares will increase with time and enable the company to stabilize hence not lack any capital for the business.
The future needs that will make the company have capital investments include transition to cloud services when the business becomes stable, opening more service provision components, and expanding the portfolio to combine the powers. For instance, if the company plans to invest €3,400,000, the payback period will be equal to the amount invested divided by the estimated annual cash flow. Therefore, in this case, it will be 3,400,000/223948, which equals 15.18 and thus, tally with the projected period (Salinas-Cruz et al., 2016). The investment can be funded using the same metrics highlighted above for one year and three months.
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