Long Term Objectives and Balanced Scorecard
Boat and yacht owners have made an investment when they purchase a vessel, and it is important to take care of that investment so the yacht holds its value. Blue Water Yacht Management, Incorporated understands this and takes much pride in their work, and provides the highest level of work. In order for Blue Water Yacht Management, Incorporated to be a successful business in the Marine Industry, the company will have to put all of their focus and efforts on their Mission Statement, Vision Statement, and Values Statement.
The goal of Blue Water Yacht Management, Incorporated is to be the most successful Yacht Management Company in the Marine Industry. The Management team at Blue Water Yacht Management Incorporated has created a balanced scorecard, outlining the Financial Perspective, the Customer Value Perspective, the Internal Perspective, and the Learning and Growth Perspectives. These are the objectives resulting from the company’s Mission Statement, Vision Statement, Values Statement, and SWOT Analysis.
Financial Objectives Measures Targets Initiatives Q1 Q2 Q3 Q4 Annual Analysis
Increase Market Share Obtain new customers through personal relationships, referrals, and advertising targeting the specific market. 10% quarterly growth Hire trained staff to maintain yachts. 10.00% 10.00% 10.00% 10.00% 10.00% Can obtain goal, but will have to work hard.
Revenues and Costs Buy supplies from wholesalers who compete for price. 10% decrease in parts and supplies spending Eliminating spending increases leverage. -10% -10% -10% -10% -10% Review after six months.
Increase Client Spending High quality yacht maintenance programs will increase consumer spending by 10%. 15% of current clientiel will increase spending by 10% Making current clients happy will result in future client business. 15% 15% 15% 15% 15% Review quarterly
Customer Objective Measures Targets Initiatives Q1 Q2 Q3 Q4 Annual Analysis
Maintain Image Proper business practices will keep image level high. High Image will increase revenues by 10%. New marketing campaign will promote image. 10.00% 10.00% 10.00% 10.00% 10.00% Review Quarterly
High Quality Service Build a good relationship with clients through consistent follow-up. Increase the number of clients by 5% quarterly. Attending boat shows and marine industry events to promote business. Review Quarterly
Offer additional Yacht Services In addition to Yacht Maintenance, the company will offer Captain and Mate services to increase revenue. Increase number of additional Yacht Services by 10% by the end of the year. Expansion of services will expand clientele. Review in six months.
Internal Objectives Measures Targets Initiatives Q1 Q2 Q3 Q4 Annual Analysis
Increase Marketing With marketing increases, client base will expand. 5% of additional income will come from additional services. Marketing will increase sales by different channels. 1.00% 2.00% 4.00% 5.00% 5.00% Review Quarterly
Company Mission Statement To be the best Yacht Management Company in the Industry. The mission will encourage employees to do his or her best every day, and give great customer service to the clients.
Reduce Company Expenses No new hires. By not hiring additional employees will cut down on payroll and expenses.
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Learning and Growth
Learning and Growth Metrics
Learning Objective Measures Targets Initiatives Q1 Q2 Q3 Q4 Annual Analysis
Employee Retention Decrease employee turnover. Reduce overall turnover by end of year. Promotion within company.
Employee Satisfaction Strategic goals will be implemented for employee growth success. Create a culture that supports innovation and growth. Promotion within company. Six month review.
Enhance Job Skills Offer employees training programs to increase knowledge of products and services. Training as needed. Promotion within company. Quarterly review.
Strategic Analysis and Choice
Plan Goals and Implementation
The key differentiator for Blue Water Yacht Management, Incorporated is Captain William Blacketer and his business and personal connections within the marine industry. The sales and marketing focus will be on the emphasis of gaining loyal and repeat customers. Blue Water Yacht Management, Incorporated will depend on word-of-mouth advertising for the surrounding area.
Blue Water Yacht Management’s competitive edge will be Captain William Blacketer and the quality of his reputation in the Marine Industry. As mentioned, Captain William Blacketer has been in the Marine Industry for 25 years, and has an excellent reputation and a countless of both business and personal contacts. In addition, Captain Bill has put a great deal of emphasis on creating a system that is both fast and efficient, which will keep costs, in terms of time spent on each boat to a minimum.
Sales are seasonal in the marine industry, and tend to be higher in the winter months, and to drop off in the summer. Blue Water Yacht Management will aim to level sales across the sales cycle by targeting clients that will want to keep their boats and yachts maintained and looking good year round.
Sales Forecast Year 1 Year 2 Year 3
General Wash 3,520 4,576 5,948
Detail Wash 4,100 5,330 6,930
Interior Clean 1,540 2,002 2,602
Engine Room Detail 258 386 580
Monthly Maintenance Packages 1,230 1,846 2,768
Compound and Wax 988 1,284 1,926
Total Unit Sales 11,636 15,424 20,752
Unit Prices Year 1 Year 2 Year 3
General Wash $30.00 $30.00 $30.00
Detail Wash $18.00 $20.00 $24.00
Interior Clean $16.00 $18.00 $18.00
Engine Room Detail $280.00 $290.00 $300.00
Monthly Maintenance Packages $28.00 $28.00 $28.00
Compound and Wax $35.00 $45.00 $55.00
General Wash $52,800 $68,640 $89,232
Detail Wash $36,900 $53,300 $83,148
Interior Clean $12,320 $18,018 $23,424
Engine Room Detail $36,120 $55,970 $86,850
Monthly Maintenance Packages $12,300 $18,450 $27,676
Compound and Wax $69,160 $96,300 $154,080
Total Sales $219,600 $310,678 $464,408
Direct Unit Costs Year 1 Year 2 Year 3
General Wash $0.80 $0.90 $1.00
Detail Wash $0.50 $0.55 $0.60
Interior Clean $0.40 $0.45 $0.50
Engine Room Detail $4.00 $4.50 $5.00
Monthly Maintenance Packages $0.80 $0.85 $0.90
Compound and Wax $4.00 $4.50 $5.00
Direct Cost of Sales
General Wash $2,464 $3,660 $5,354
Detail Wash $1,640 $2,398 $3,464
Interior Clean $462 $700 $1,042
Engine Room Detail $774 $1,352 $2,316
Monthly Maintenance Packages $862 $1,384 $2,214
Compound and Wax $2,564 $4,494 $7,704
Subtotal Direct Cost of Sales $9,166 $13,988 $22,094
Milestone Start Date End Date Budget Manager Department
Finish Business Plan 1/1/2010 2/18/2010 $0 Bill/Sherrie Owner
Sign Rental Contract 2/20/2010 2/20/2010 $500 Bill/Sherrie Owner
Hire Boat Wash Employees 1/20/2010 1/20/2010 $400 Bill/Sherrie Owner
First day of Business 2/18/2010 2/18/2010 $0 Employees Employees
Hand out Flyers 1/28/2010 2/20/2010 $0 Bill/Sherrie Owner
Press Release 2/16/2010 2/16/2010 $30 Bill/Sherrie Owner
Follow-up on Press Release 2/17/2010 2/17/2010 $0 Bill/Sherrie Owner
Since Blue Water Yacht Management, Incorporated is located in South Florida boat Maintenance is not too much of a seasonal business, but sometimes with business busiest in the winter months. Blue Water Yacht Management will rely on temporary and part-time help. The company will hire two full-time wash/detailers when it opens for business. Even though the company will hire temporary and part-time help, the quality of work will not be compromised, since all wash/detailers will receive training. Blue Water Yacht Management, Inc. will also hire an administrative assistant to help Sherrie with paperwork.
Year 1 Year 2 Year 3
Owner(s) (Bill & Sherrie) $40,000 $80,000 $100,000
Boat Detailers $30,000 $40,000 $50,000
Administrative Assistant $13,000 $15,000 $22,000
Total People 0 0 0
Total Payroll $83,000 $135,000 $172,000
Financial Projections and Analysis
Projected Cash Flow
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $186,660 $264,076 $394,748
Cash from Receivables $26,194 $43,804 $64,940
Subtotal Cash from Operations $212,854 $307,880 $459,686
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $212,854 $307,880 $459,686
Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $123,360 $176,624 $226,348
Bill Payments $66,104 $93,674 $135,486
Subtotal Spent on Operations $189,464 $270,298 $361,834
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $189.64 $270,298 $361,834
Net Cash Flow $23,390 $37,582 $97,854
Cash Balance $40,790 $78,372 $176,224
Projected Balance Sheet
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Cash $40,790 $78,372 $176,224
Accounts Receivable $6,746 $9,544 $14,266
Inventory $1,376 $2,038 $3,218
Other Current Assets $2,000 $2,000 $2,000
Total Current Assets $50,870 $91,952 $195,708
Long-term Assets $20,000 $20,000 $20,000
Accumulated Depreciation $4,140 $8,280 $12,420
Total Long-term Assets $15,860 $11,720 $7,580
Total Assets $66,730 $103,672 $203,288
Liabilities and Capital Year 1 Year 2 Year 3
Accounts Payable $6,194 $7,834 $11,432
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,194 $7,834 $11,432
Long-term Liabilities $0 $0 $0
Total Liabilities $6,194 $7,834 $11,432
Paid-in Capital $60,000 $60,000 $60,000
Retained Earnings ($20,100) $536 $35,838
Earnings $20,636 $35,302 $96,018
Total Capital $60,536 $95,838 $191,858
Total Liabilities and Capital $66,730 $103,672 $203,288
Net Worth $60,536 $95,838 $191,858
Critical Success Factors
The main issues that the company faces would be that the team needs to work closely with the yacht owners, captains, and crew to support and oversee all of the administrative, technical, safety, and legality of the yachts operations. This allows the yacht owner more time to unwind and enjoy his or her time on his or her yacht. Blue Water Yacht Management’s goals are to achieve low cost, high quality work, and make a distinction from the competition.
Controls and Evaluation
Blue Water Yacht Management, Incorporated understands that the company must follow guidelines in order to be successful. First would be to follow their business plan to the letter to be a successful. Also, with the extensive experience of Captain Bill’s yachting experience, and Sherrie Sheehan’s administrative skills they will make a solid management team. The business is mobile, and clients can reach the company by several means of communication such as phone, e-mail, website, and fax. The management team realizes that they will have to make sure there is enough money to get the company through the slow times. Realizing that the first couple of years are when the company will mostly likely lose money.
The balanced scorecard shows that the company’s strategy has a clearer path to everyone in the company from the management team to the staff. This will confidently help the company grow into a successful company.
Grand Strategy Matrix Chart, Paul Lemberg, 2003. Retrieved December 4, 2010.