BUSINESS PLAN 2014-2015

330333 Hoover Rd.

Warren, MI 48088
Phone: 586-574-3100
Fax: 586-698-4204
www.sparkvei.weebly.com
Table of Contents
Introduction
Executive Summary..3

Company Description ..
3
Mission Statement
....3
Management
Planning
......4
Organization ....4
Directing
..5
Controlling ......5
Marketing Plan
Assessment of the Environment
Current Economic Conditions...
..5
Industry Analysis
Real Industry Analysis
....6
Virtual Industry
Analysis ....6
Target Market
and Market Segmentation ...7
Customer
Profile .....7
Competitive Analysis ..8
The Marketing Mix
Product9
Price ...
.9
Placement
...9
Promotion
..10
Positioning .....10
Break-even analysis ...
11 Financial Data
Income Statement
..13
Balance Sheet
14
Cash Budget
..15 Financial Write-Up
...16
SWOT Analysis and Discussion of Business Risks
SWOT Analysis
.17
Business Risks ....18

Discussion of

Appendix
Loan Information ..
.18
Business Contract: BP ..
.19 Business Contract: Chevron
..20
Exon Mobile ...21

Business Contract:

Organizational

chart ...22

EXECUTIVE SUMMARY

Spark was formed in September 2014 as a possible idea to save money towards gas and transportation
costs. The company plans to make transportation more affordable by providing an economical gas card
that will deduct a set amount of money from each acquired gallon of gas. We will start out selling a 15
dollar gold standard gas card that will deduct 10 cents per gallon. Then to expand we will provide a
platinum and silver gas card which will cost a different amount and provide a different amount of money
off of each gallon purchased.
Spark will aim towards all individuals who drive and are constantly in the need for gas for their source of
transportation. Our primary target includes the work force and business people who drive themselves to
and from their destination. Most business people drive themselves or carpool to and from work where
there is a constant need for gas to be refilled in their vehicle. Our secondary target includes the younger
generation Y or new drivers who have a vehicle assessable to them. Generation Y includes drivers that
are just getting into the workforce or finishing up graduate school. A vehicle is a need for generation Y
and the work force, and not a want. For this reason this is our target market.
Our business strategy is to sell our products at an economical price. We plan to spark the market by
offering reasonable priced products that will save money on transportation overall. Our competitive
analysis indicates that there are no other Virtual Enterprises located in the United States or internationally
that are in competition with Spark. The closest Virtual Enterprise Company that would be in any relation
to Spark would be an international company that sells gas to its consumers.
In Sparks first year of operation, we expect a loss of $$$$$ but expect to reverse this subsequent years as
we ramp up sales efforts.

COMPANY DESCRIPTION
Spark Cards can be bought directly on our website at www.sparkvei.weebly.com. Spark Cards began its
operations in September of 2015 with 31 employees. Our companys market aims towards anyone with a
valid license. This plan provides an affordable way to save money every gallon purchased with one swipe
of a card.

MISSION STATEMENT
Making transportation affordable one swipe at a time.

PLANNING
Short term goals: within the first year of operation

Launch website by October, 30th 2014.

Sales of $100,000 in the first fiscal year

Convert at least 20% of website visitors into sales

Attend at least 1 local trade show to increase brand awareness
Have uncollectible account less than 10% of sales.

Medium/Long Term (after 1 year)

Fundraise to attend at least one national trade fair in the fiscal year
To achieve a 90% or greater satisfaction rating from customers through surveys
To create alliances with other virtual entities that will enhance our product lines and
profitabilitys
To alliance with vehicle and park, travel, and entertainment firms
Achieve 10% sales growth for FY14/15 -15% and 20% in FY15/16

ORGANIZING
Spark has taken the following question into consideration: who is in charge, how organized we are, what
departments we have, and what responsibilities we have as a company. We also intend to provide a
reliable resource to you when you have question. Our structure as a company is to work together and ask
question to our chiefs and other appointed bosses
Spark as 6 departments with 3 chiefs. Each department has a VP and the other employees of the
department report to their VPs. The entire firm will report to the CEO for further directions and answers
to questions. The CEO is the head of the company and then the CAO is in charge of human relation and
public relation, web page and media design and administration. The CFO is in charge of accounting and
sales and marketing. All of the firm will attend trade shows to expand our company to other firms
Our Human and Public Relation Department is responsible for creating organizational charts, establishing
attendance procedures, create an employee handbook, database , and time cards. This department will
also be handling employee issues such as warning, write-ups, demotion, commendation, and
recommendations. They deal with our 401k program and research and they organize tax workshops for
employees.
The Accounting Department is responsible for creating yearly budgets and financial records. They pay the
bills for rent utilities insurance and interest. Managing accounts payable and accounts receivable. They
also bring business partners to our firm.
The Administration Department is in charge of creating newsletters, calendars, press releases each quarter,
and bulletin boards. They set goals objectives and strategies for the department. Administration will
organize company social activities and workshops. They will also practice greeting visitors, other firms
and business owners. Included in our Accounting Department the purchasing team will determine prices
for our product, update inventory, and sales track daily to update our report monthly.
Our Sales and Marketing Department will evaluate our competitors, develop sales strategies and goals.
Research the target market. Create monthly promotions upon sales data and special edition monthly
products. They create booth pre-approach and booth follow up as well. They also bring partners into our
firm.
Our Design and Layout Department will maintain and update our website. They design company
letterhead, logo, and brochures/product brochures. This department will create company templates for fax,

memos, order forms, product catalog (plus maintain it), business cards and promotions/events. They plan
out our trade fair booth and coordinate trade shows notices and thank you letters plus monthly customer
thank you letters and notices.

DIRECTING
Spark will start each day with a meeting to discuss the daily agenda. After the meeting is done and the
minutes are collected all the departments will be assigned their daily tasks and their VPs will ensure that
all their employees are on task and setting their daily goals. At the end of the day another meeting will be
held and all departments will ensure that their tasks were accomplished and objectives and goals have
been made. Vice Presidents and Chiefs will check to make sure daily work is completed. The Chiefs will
meet together and discuss to evaluate and adjust daily activities and make sure they continue to be in line
with the companys mission, goals and progression is met.

CONTROLLING
End-of-day- Department meeting will be to discuss and monitor daily productivity and weekly meetings
will be to discuss the management goals. Monthly meetings will be an opportunity for the CEO and COO
to share actual results versus projections with the entire company. Departments will observe and evaluate
employees monthly to determine if work is getting done and staff will have the opportunity to evaluate
company management by an upward survey.
There will be monthly meetings and incentives to reward high-performing employees. We will consider
implementing a Spark Buck program whereby employees earn spark Bucks in recognition of the great
accomplishments with this company.

CURRENT ECONOMICS CONDITION

We will discuss some key overall indicators and some that are relevant to the gas industry.
Overall Economic Indicators
According to the Bureau of Economic Analysis (BEA), the gas industry increased at an annual rate of 4.6
percent in the second quarter of 2014. One reason for the marginally positive increase of Gross Domestic
Product (GDP) was because of increased consumer spending. Since July the Gross domestic product
increased at an annualized rate in the third quarter at 4.1%. According to the Commerce Department
figures showed, this has been the strongest since the final three months in 2011.
According to Bureau of Labor Statistics, the unemployment rate in September 2011 was 7.2% and in
September 2014 was 5.9%. These numbers are encouraging, when people are earning an income, there
will be more in demand for retail products. This does provide companies with an opportunity to hire
qualified people to support growth objects.
Interest rates are historically low in an attempt to stimulate the economy. A 30-year fixed mortgage rate in
September 2011 was 4.11% as compared to September 2014 when the rate was 4.16% . This is a little
discouraging for people to spend on big-ticket items such as new homes and cheaper transportation
which translates into gas card sales. Lower interest rates also stimulate the economy by encouraging
businesses to borrow so they can stimulate and increasing the economic growth of businesses.
The U.S. imports 10.6 million barrels per day of petroleum in 2012 from about 80 countries. In 2011 data

shows a 39% increase of imported gas since 2008. This could favorably impact the sales for U.S. gas
customers.
Gasoline Industry Economic Indicators
Car ownership rates significantly influence demand in the gasoline industry, when there are more
people driving, more consumers will need gasoline in order for the car to function. Until 2012, the car
dealerships were booming, however, when the price for gas shot up to 40 more cents, people tried to be
more conservative and spend less money on gas.
Gasoline prices are rising, and consumers are having a tough year. According to NPR, in October of 2012
gasoline prices were $3.75/gal. It was expected to decrease to $3.54/gal in February of 2013. In both 2011
and 2012 congress lowered taxes people pay in social security. The goal was to give workers more cash to
help drive economic growth.
In summary, at the time of this business plan, the US economy has been struggling to recover from an
extended recession. Eventually, with promising results each year, the gasoline industry will recover.

INDUSTRY ANALYSIS
Real industry analysis
There is only one other company that we know of that offers the same services as we do. The other
company that gives money off of gas is Meijer. They give of $0.05 for ever gallon that you get. At spark,
we offer $0.10 off with every gallon.
There is no other place that offers the same amount of discounts as we do. With how expensive gas is now
days, it is nice to get money off of every gallon you purchase.
Virtual industry analysis
There is no competition in the VE network with our company. In VE, our customers can purchase our
product. The only competition that we have is in the real world market. That competition is Meijer, who
does not have anything in the VE network.

TARGET MARKET AND MARKET SEGMENTATION

Spark industry is a company founded in the United States of America to help reduce prices on gas for the
American consumer. Our focus is to target the market on the daily drivers ranging from the baby boomers
and generation X era whereas the secondary targets will be the youngest and oldest drivers in the veterans
and generation Y. Although a vast amount of people in the generation Y and veterans era drive, the baby
boomers and generation X drive the most relating to education, their career, and family or self needs.
Most of the gas cards are projected to be sold in all parts of large cities and states that are landlocked
because of shipping fees, emission regulations, and living standards that affect the price of gas.

CUSTOMER PROFILE
Other successful companies tend to use one of the 5 most common ways to advertise their product, and
company:


Reputation- this is where in a advertise the product is mentioned numerous times in
different ways while utilizing the sight and sound attributes to convince consumers to buy their
product.

Claims- This is where a company makes certain claims about their product or company
comparing their product to s similar one, and stating many ways that their product is better than
the competitor.

Association- This technique is where the firm places their product alongside a famous
person or somebody that has high social status. They place their product alongside that people
like, so that it will make consumers buy the product so they can feel like the celebrity.

Bandwagon- The firm displays their product as if everybody popular has it, and if you
dont buy their product then you could be left out of the in-crowd, all because you dont have
their product. If you buy what they make it will make you popular is the idea behind this
technique.

Promotions-The Company offers a bonus for buying their product, like you get 50% off or
something like that. You receive something for free by buying their product. The idea is that you
will buy the item to receive the free incentive.

COMPETITIVE ANALYSIS
Sparks markets products that have similarity to businesses that already exist in the marketplace. Sparks is
aware that there are not any international competitors, but there are competitors nationally. It has made it
to our attention that any businesses similar to ours are a direct competitor. We have taken a relatively
modern product and found a way to get the gas cards in the consumers' hands. Gas cards will spark the
consumers' interest and will be persuaded to buy ours over our competitors. They will employ strong
marketing strategies to draw in buyers, also to solve their budget crisis. Competitors such as Krogers and
Speedway also have gas cards. Krogers is primarily a grocery store but over the years they expanded and
made their own gas station to where their customers can purchase gas with their reward card. Speedway
offers various rewards for each time a customer purchases gas from their facility.

Real World Market

VEI Market

Spark 100%

Firm Name

Speedway
Rewards

Kroger gas
Rewards

Spark 100%

Direct
Competitor

Specialized
Characteristics
of their Firm
different from
ours

Societys
Opinion

Strengths of
their Firm

Weakness of
their Firm

Yes

They only offer

points based off of
how much you
purchase from
them.

This is looked
at as a good
inexpensive
way to save
money.

The card, and

rewards
program is
free to the
consumer.

The only way

to earn
discounts is by
purchasing
their product.

The discounts are

only given out
based the amount
of money you
spend I their store.

It is an up and
coming
rewards
program that
shows
promising
results.

You can earn

more
discounts on
gas then our
firm offers.

The amount of
discount
correlates with
how much you
spend.

Yes

PRODUCT
Besides the mechanical works of a car or some sort of transportation, it runs on gas. One of the worlds
problems would be the rising cost of gas. Whether it may be a difference of a few cents, people are
always looking for a cheaper price. Consumers strive to find cheaper gas prices within their budget. In
March of 2011, United States Department of Commerce reported an average $109 per person and $305
per household. Every year demand causes gas prices to increase significantly. Spark will sell gas cards,
which allows consumers to purchase gasoline for a discounted price. These gas cards could be purchased
at any participating gas station. On the gas card it includes the owners name and serial code attached to
their subscription. When our consumers purchase their gas cards from us, it will be shipped directly from
our company. It'll take a day or two to process the purchase and then it will be shipped through a standard
mailing envelope with a stamp that costs 42 cents.

PRICE
At Spark, we plan to make travel easy with our discounted gas cards. In order to receive one of our gas
cards, you must pay $15. It will be $15 dollars each month to insure the card is in working order. Its a
small price to pay for the large discounts youll receive. The point system works like this, with every
gallon of gas you purchase, youll receive $0.10 off. Our resources will be more available and affordable.
If a consumer wishes to cancel their card, a cancelation fee of $20 will apply.

PLACEMENT
We will distribute our gas cards directly through us and at various trade fairs. It is important for us to
create a website in order to expand the business through, it is user-friendly and convenient. On the
website we will provide examples of high-quality product photos, able to purchase on-line, continue to
add promotions on the website, and a customer service center.

SOURCES OF
SALES
ONLINE SALES
MI/ILL/TRADE
SHOWS
TOTAL

$50,000
$35,000

PERCENTAGES OF
TOTAL
PROJECTED
SALES
59%
41%

$85,000

100%

PROJECTED
AMOUNTS OF
SALES

PROMOTION

E-mail Blasts- were going to send out weekly e-mails that include any promotions were
offering. Well use this to target the older generation
Social Media- were going to make a Facebook, Twitter, Tumblr accounts. To connect to our
customers directly. So we can target the younger population.
Flyers- we will post flyers up at all different types of gas stations that will include our companys
information such as our email, phone number and website.
Commercial- we will plan to air commercials as often as possible on all the major TV stations as
well as some of the minor stations.

We plan on promoting through branding and advertising. We want to heavily focus on driving customers
to our website so they can acquire their savings and we can get a steady cash flow.

Our advertisements will be unique enough to catch the interest of our target market. The strategies we use
will focus heavily on bringing in potential customers to our website which is the source to register for our
product.

POSITIONING
We plan to differentiate ourselves from our VE competition by offering options that are not only
appealing to the target market but also like no other cards that are on the market. Our product is a unique
item that will allow our customers to save money on gas no matter where they go.
Our card is one of a kind and offers deals that no other card does. It appeals to a wide range of people. We
intend to brand our product so whenever our customers need to go places and notice that their gas tank is
low, they will be able to put gas in their car with ease knowing theyre saving money with every gallon
they put in.

BREAK EVEN ANALYSIS

In the first year of operations, Spark estimates that it will not reach its break-even point. Spark will expect
to have total annual fixed expense of $10,652. An average selling price per gas card is $15. Spark would
have to sell 1,000 gas cards to break even for a total revenue amount of $15,869.16. In the fiscal year, we
expect to sell approximately 800 gas cards for total revenue of $13,000.

10

Spark Break-Even Chart Fiscal Year 2014-2015

$30,000.00
$25,000.00

1,000
Units

$20,000.00

Revenue
Dollar Amount ($)

$15,000.00
Variable Cost

Fixed Cost

Total Cost

$10,000.00
$5,000.00
$0.00
0

500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Number of Units Sold

11

Spark
Break-Even Chart

Spa
Income S

For the Year En

12

Sales revenues

Trade fair revenues

Contractual sales to non-VE entities
Other than trade fair revenues
Total sales revenues
Cost of goods sold or services provided
Gross profit

60,000
0
0

60,000
9
49,400

Operating expenses

Salaries
Rent
Depreciation
Payroll tax
Advertising

9,897
935
8,955
2,813
0

13

1
,

$30,000.0

$25,000.0

$20,000.0

$15,000.0

$10,000.0

$5,000.0

$0.0

14

Insurance
Pension or 401(k)
Interest
Supplies
Utilities
Other
Total operating expenses
Income from operations
Other gains and losses
Net income before taxes

Corporate income tax

Net income after taxes

0
0
0
0
762
0
23,363
26,037
0
26,037
5,780
20,257

15

16

FINANCIAL WRITE-UP

17

Income statement
Since we are a new company we will not have active sales until November 2014. We expect our sales to
start conservatively and increase over the next fiscal year as we become a more established firm within
the Virtual Enterprise community. In November we plan to make $20,527 within the first month of
operations. We will go to trade shows to get our product idea out to the peoples view and see their
opinions on it. The trade show will project 56% of our total revenues. We expect 75% of the employees
salaries to be covered by our sponsors, this explains for the low value of $9,897 for our salaries amount.
Balance Sheet
As of October 31, 2014 we have total assets that we own is $85,183 cash in the company. We do not have
any liabilities for the first month of Sparks production. Cash will be the largest assets to our balance
sheet which primarily came from the loan received by our sponsors. Since our firm has not yet been in a
long time production we cannot fully give the total assets and total liabilities for the full fiscal year.
Cash Flow
To establish our business, Spark will receive a loan from our sponsors in the first couple months of the
fiscal year. At the end of the first month of production we expect to have $66,752.36 cash on hand and
$33,367.60 cash as our accounts receivable balance. A decrease in the cash balance is common among
new business and is not always considered bad. As long as the number of customers continues to increase,
through organic growth financed by profits, we expect to ultimately be a profitable firm. We expect to
have more money by the end of November 2014, we have more to spend and increase our product
advertisement. It is aware that collecting receivables is a common Virtual Enterprise challenge and our
plan is to continuously manage the collection efforts of payment.

SWOT ANALYSIS
The SWOT analysis provides us with an opportunity to evaluate our businesses strengths, weaknesses,
opportunities, and threats to help us identify areas for development. They are as follows:

18

Strengths
We are entering a market that is fairly
new, and not many other firms are
involved.
We have great customer service, and
are willing to work with people when
cards are lost or stolen
Our website is easy to use, and displays
are company and product in a great
way.

Weaknesses
Our firm has no experience with the
competition involved in being a VEI
firm.
The only face-to-face business
encounters we will have are going to
occur at tradeshows.
We need to find quality employees to
replace all the workers that are leaving
due to graduation.

Opportunities
On the VEI website we have not found
any competing firms that are going to
interfere with are potential profits.
There is a chance we can secure long
term contracts to market others
companies products, and we can offer
the product as a potential promotional
item.
There is considerable opportunity in
this market, and we are a new young
company looking to expand quickly.

Threats
Once we are recognized as a
competitor the other firms will put
pressure on us to compete with wellestablished firms.
There is the slight chance that our cards
will not be accepted at gas stations card
scanning stations.
We may not be able to have as good as
rewards as other more established and
experienced firms will be able to offer.

DISCUSSION OF BUSINESS RISKS

We have identified several risks our business has and have determined ways to mitigate them. We intend
to set up a consultation with Invest, our business sponsor Macomb schools and employee credit union, to
determine if there are additional risks we will need to manage.

RISK IDENTIFIED

RISK ADDRESSED

19

The parents always have to pay for not

only their gas but for their kids gas too

We can address this with market research efforts

directed at our target market to ensure we are
addressing their product needs

Companies that we partner with may

want more than what were willing to
give.

We will identify different deals with the other

companies to ensure that we keep them happy but
take care of ourselves as well.

LOAN SUMMARY
We are not accepting or receiving any business due to the fact that our business is new and up in coming.
At this time we have no need for a loan because our annual sale is above the normal quota and we do not
have any deficient funds. Also, we have a cash flow left over from last year. If needed in the future we
may apply for a loan if revenues are down.

20

21

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Angelina Colonessi
Robert Downer and
Mykea Dockery

Vice President of
Human and Public
Relations:
Zach Schulte

Madisyn Penz
Kaltra Gorcia and
Shelby Myers

Jesalyn Wimbury
Juwan Campbell
Paige Tewell
Katherine Vitella

Jake Cerny
Katherine
Sahutske

Vice President of
Sales and Marketing:
Sandra Sou

Chief Financial
Ofcer (CFO)
Jenna Kowalski

Chase Billingsley
Kyra Phillips
Brenna Swinyer
Anthony Brown

Vice President of
Web Page and Media
Design:
Brooklin Adams

Olivia Marchione and

Carmen Cook

Vice President of
Administration:
Maddie Cronch

Chief Administrative
Ofcer (CAO)
Danny Van

Chief Executive
Ofcer (CEO)
KatherineJoAnne
Buiteweg

Justin Alkass
Aida Sijamhozic
Kennedy Stouder
Didi D
Fong Chang

Vice President of
Accounting:
Monica Bailey

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