My business will be a partnership because I would have fewer responsibilities and fewer jobs to do. Also if our business were to become bankrupt we could share the responsibilities and work through it together.
I will need to carry out research to find out what healthy foods people like eating, what areas haven’t got a bakery, what areas have less bakeries and the cost of staff wages. I will also need to research some health and safety laws. I will do this by writing up a questionnaire that will answer all my questions.
Legal Structure
The Advantages of being a sole trader are that you don’t have to share profits and you can make decisions quickly because you don’t need to get permission or ask someone before you do something and finally its really easy to set you don’t need to fill out contracts or forms because there is only the one owner.
There also Disadvantages of being a sole trader are it’s harder to keep up with a larger business in terms of prices. Another Disadvantage is unlimited liability its when the owner is fully responsible for any debts the business has which also means that the owner would have to sell shares or his own personal properties to repay the debt. Another is the sole trader becomes ill it will effect the business.
The Advantages of being a partnership are its easy to set up and the amount of capital needed to set up the business is often small and it’s easy to raise. Another advantage is partners could specialise in certain areas. It’s less stressful and there are fewer responsibilities.
There also disadvantages of being a partnership are the profit that the company makes has to be shared equally between the owners. Also some partners could have disagreements about the running of the business. One big disadvantage is if one of the partners dies or gets bankrupt, the partnership must be dissolved.
My business will be a partnership this is because I feel that I will benefit from my colleagues advice. Also because I would have more finance than a sole trader and it would be less stressful. I would find it comfortable to share the business responsibilities. Disagreements can lead to break up of the business for this reason I think that we should have a Deed of Partnership. Also I could take more holidays and won’t have to worry about anything because my partner could take care of everything while I am gone.
Location
It is important to choose the right location for my business because this could determine if the business becomes successful or not. I want to choose an area that will benefit my business the most. The best location for my business I think is near a school/football ground or inside a shopping mall because that’s the areas that are mostly busy and that’s where there are more customers and more customers mean more money/profit.
My business could either be in near East Ham high street or near Ilford exchange because both areas have a large population of different ethnic minorities and that would be great for my business because I’m selling multi cultured food. They also both have easy transport access e.g. train stations, buses and trams.
This is the idea that I have come up with:
Marketing
Businesses need to market their products and services because they need more customers they could advertise using e.g. leaflets or internet or any other forms of media.
The marketing mix is made up of four parts they are Price, Product, Place and Promotion.
It is important for me to make sure that the marketing is right for my business because if my prices are too low I won’t break even and if there too high I might drive away customers. I need to find a price appropriate for my business. Promotion is a very important factor for a business because you need to advertise to bring the customers otherwise people might not know about the business and therefore you might loose out.
I did a questionnaire and gave it to 20 random people in Ilford. I asked questions about age and gender to help me to find out which market segment would be most likely to buy my products Although I only asked a small sample of people, I found out that the customers who are most likely to buy my product would be adults.
I asked consumers how they would prepare to pay for my food. I found out that a price of a meal (breakfast or lunch) should vary between £2 - £4 and all other snacks and drinks would be less that £1.50 I think they prices are great for my business.
The next question I asked was where they shop for similar products and most of them replied takeaways and cafes in Strafford and Forest Gate so I thought the best thing for business would be to keep it away from these areas because that’s were my biggest competitors are.
Finance
New businesses need capital to start up the business. For my business I will need to buy fixed cost such as building location, cookers, Refrigerators, ovens and coolers. Financial planning is a major factor in any business without it the business will fail. There are plenty of ways in which I can raise capital such as using my own savings, getting a loan from my friend, family or a bank. I have decided to raise capital by going to the bank and asking for a loan I have decided to keep my savings in case I ever got into any debt I could pay it off.
I think this will be the best method because the bank will be able to provide me with the money quickly, also the bank knows that I am reliable so we will have a trustworthy relationship and I would repay the same amount each month. This will also encourage me to become more determined to become a success and breakeven knowing that the longer it takes to pay back the more interest they will add on it, but if I take the money from my family I will not push myself and that could put me in dept.
I will also need enough money to cover operating expenses until I get enough revenue coming into the business to pay for expenses such as rent, utilities, business rates and the interest on my long term loan. I will also need money to cover variable costs such as the wages for my employees (chefs), the amount I spend on ingredients and cooking accessories.
All businesses need capital expenditure to provide a service to begin with. Once my business is up and running and working well. I will need to borrow £15,000 in order to cope with my start up costs and to keep my business buoyant until I begin to make profit.
Conclusion
My business enterprise idea was a café in Ilford, which is in east London.
I believe this would succeed because the location that I have chosen would be a great place for my business purely because the population in that are is big and my questionnaire shows that it would be a great place for my business.
