Opportunities
- North London is a potential nightlife area.
- It’ll attract people in the local area and around it, that don’t want to travel far.
Threats
- Under age drinking.
- The possibility of drugs can make the bar have a bad reputation.
- Loud music could disturb locals.
- Fights occurring, so the need for bouncers would be necessary.
PEST Analysis
Political – Factors that apply are environmental regulations and protections, taxation, consumer protection such as (smoking and non smoking areas), employment law (because of alcohol, all employees will have to be over the age of 18). Regulatory constraints such as quality and safety would comply. When the business opens, I must make sure that the business complies with certain rules and regulations like safety hazards and a fire exit would have to be clearly marked so that customers can clear the building in the case of an emergency. Failure to do so then it may result in the business shutting down.
Economical – economic growth, interest rates, government spending level, policy towards employment such as minimum wages and benefits, taxation (impact on consumer disposable income, corporation tax rates). Inflation can affect my business in much the same way as changes in tax would. So if the changes in interest rates went down, so may the prices. Unemployment may affect sales because if the unemployment rate was to rise, this would mean that people would not be earning as much money and they might have to cut back on luxuries such as going out and other things that are beyond needs.
Social – income distribution, attitudes to work and leisure can affect the business and different lifestyles of people. The food and drink can affect the business a lot, as certain religions don’t eat certain foods. Such as Muslim's only eat halal meat, so I need to make sure that halal food is being served.
Technological – rapid development of technology is affecting the business as well, and it could also put back the business in its market. The main type of technology that the business could use is the internet. It is very accessible, and could contribute a lot to the business, as it could be used as a form of advertising.
Questionnaire
1. How old are you?
Under 18………18-24……….25-34……….35-44……..45-54……..55-60……..61+………
2. What is your gender?
Male…………..Female………..
3. Where do you live?
North London…………East London………..South London…………..West London……….Central London…………Other (please state)………………………………….
4. Are you in full time employment?
Yes……………………………….No……………………………….
5. What type of work do you do?
Senior Management………………..Lower Management……………….Supervisor Role…………………Skilled Manual……………………Unskilled Manual…………………… Casual Labour…………………
6. How often do you spend a night out?
Yearly…………Every few Months…………Monthly…………Twice a Month…………
Every Fortnight…………Weekly…………More than once in a week…………Never…………
7. Out of the following, where do you prefer to go out at night?
Restaurant…………Nightclub…………Bar…………Café…………
Stay at home…………Pub…………Other (please state)……………………..
8. What part of London do you mainly go for a night out?
North London…………East London…………South London…………West London…………Central London…………Other (please state)………………………………
Questionnaire Analysis
From this question, I would not find anything that’s really relative to the business but I can find out how old the majority of the people in the local area are that my business would be attracting. The majority of people that I asked were between the ages of 18-24, which was 33%. The second was 27% of under 18’s and the third were 25-34’s which was 23%. Now a problem may occur with the under 18’s as the business will only be open to over 18’s in the evening, as there is such a large percentage of them.
Questionnaire Analysis
The majority of the people that I had asked were 53% which were males and 47% were females.
Questionnaire Analysis
As I was asking this question in and around the North London area, the majority of the people were from North London, second was people from East London then West London. The reason why I asked this question was because it relates to question 8 and where they would travel on a night out. It just gives me an idea of what distances people would travel to go out.
Questionnaire Analysis
From this question I can see whether people can afford nights out, as people in employment have the money to spend on luxuries. The majority of the people had said that they were not in full-time employment and only 11 people said that they were. This may cause an affect to the business as disposable income or any money is something that a lot of people do not have.
Questionnaire Analysis
The majority of people that I had asked this question to are mainly casual labourers, which led by 31%. Second was unskilled manual by 23% and third was skilled manual. This question links with question 4 as it is more detailed on the income of those people who are working. So it’s a question of whether the people can afford to spend nights out and by looking at the results everyone above the unskilled manual could probably afford it.
Questionnaire Analysis
From the people I interviewed, the majority of people spend a night out only twice a month and secondly every fortnight. Even though I only had asked 20 people in the local area, the results may not apply to everyone in the local area and can be different. However from these results, if the majority of the local area spends a night out either twice a month or every fortnight then it can create revenue for the business, as it would be critical for the business if it didn’t have no ‘clubbers’ in the area. Everyone I had asked, do spend nights out from more than once in a week to every few months and no one had said they never go out.
Questionnaire Analysis
From this question I would get to know how people prefer to spend their nights out, this would help me to know what to specialize my business in and know what is more appealing to potential customers. The majority of the votes had come from nightclub and bar, which shows to be the most popular way to spend a night out. However, by choice, 7% of people did prefer to stay at home on the rare occasion.
Questionnaire Analysis
From this question, I would find out if people prefer their local areas to spend a night out or do they travel to other parts of London or even outside London. Central London had got the most percentage and North London came in second. There will always be competition for my business, especially against Central London, as it is an area that is convenient to travel to, has a wide range of nightlife and is in the heart of London. As my business will be located in North London, it may only attract the people in the local area and the surrounding areas, as people may not be willing to travel far, and is not as convenient as Central London.
Aims and objectives
Mission statement
This business aims to:
- Provide quality products with a quality service for all customers
- Establish a reputation for high quality and reliable service
- Maximise profits
- Make the business known in its market
Objectives
The objectives of the business are:
- To accelerate the break-even point in the first six-months of opening
- To survive
- To provide friendly service and to host a enjoyable experience to customers
Types of Ownership
The type of business that I will be representing is a sole trader. The reason for this is because a sole trader is the simplest form of a business organisation. There are no legal requirements to it. Any income or profit that I earn will be mine and mine alone. However, there are a few legal constraints and also unlimited liability. So I will be responsible for any debts that I face. The reason why I have not set up a partnership is to avoid disorder or any confusion over the business if it was split. Also, to set up the business, there might be disagreements over how things should be done.
Boston Matrix
The Boston matrix will help me to identify the final outcome of the business and how it will do in the market against competitors. In the local area, the competition is limited to very few others. In the area, the major competitors are Eros located in Enfield, and KO which is located in Wood Green. My business would possibly not be able to compete with Eros and KO as they are more large scale based.
So by placing my business on the Boston matrix, the market share would probably be low, as it won’t take as many people as expected at first, but I expect the business to pick up on its market growth and have it continuously rising.
Marketing Plan
Market segmentation is a way of dividing up the market into smaller sub-groups. Different products may apply to different people in different sub-groups. This is very important especially when advertising, as different adverts will apply to different people. These are the market segments I will be aiming for:
Age
People of different ages buy different products. The age that I am aiming for is practically everyone but at different times. During the day, it will be open as a restaurant/café for all ages serving food and drinks. It will then close at 5.30pm and open again at 8pm as a bar and restaurant to over 18’s with music. Identification cards will be needed to enter after 8pm and will be required at the bar as well.
Income
More and more people have disposable income these days but not everyone. Aiming my business at the higher income group would mean my prices would be high, but I will be targeting it at the mid-income group, so my prices won’t be inexpensive but still affordable. It won’t be a bar that’s at the high end of the market.
Social Class
Social groups can range from A to E. ‘A’ being the highest social class and ‘E’ being the lowest. My business will be aimed at the social classes of ‘B’ to ‘D’, whish also includes C1 and C2. These social classes have jobs such as lower management, supervisor, administration, skilled manual and unskilled manual. So it is affordable for these people, but it won’t appeal to the class A and maybe some class B’s, and is not affordable for class E’s as they probably would not have any disposable income.
Ethnicity and Gender
There will be no discrimination on what ethnic or gender will be allowed into the Bar. All products of the business are aimed at all ethnics and genders, even though the setting of the bar will have an Asian theme and the menu of the restaurant will serve Indian food, so it will attract customers that enjoy Indian food. Normally different people like different drinks, especially when it comes to male and females. Males tend to like beers and stronger liquors and females are keener on alcoholic drinks, juices and fizzy drinks. Also, during the day when the business is open to everyone, there needs to be juice, milkshakes and fizzy drinks for the younger ages. So by aiming the products to everyone, there will be a wide range of all the drinks that I have mentioned.
Place
The business will be located in the centre of North London, in the borough of Enfield, in Palmers Green on Green Lanes.
The area needs to suit the market that I am aiming for and this part of green lanes is an advantage. It is 5 minutes away from Wood Green high road, which makes it easy for transport. As it is 5 minutes away from Wood green and not part of Wood Green, there are no parking restrictions, so it makes it easier to park. As it is in Palmers Green, the prices for buildings are less expensive, whereas buying a property over the border line in Wood Green, would be a lot more expensive.
This advantage of this area is that it is on the main road and is easy to get to. 5 minutes either side of Wood Green and north circular road (A406). It is easy to get to from Wood Green tube station. It is a relatively busy area and it is situated on a main road, so people can notice it by driving and walking past.
There are certain planning restrictions for the property. As it will be playing loud music, the walls need to be sound proof because it is in a built up area and can affect the local residents and also, it needs to include 2 entrances at the front because of the loud music. By having one entrance, every time the front entrance opens, the noise will be exposed to the outside.
Product
The products that I will be providing is a wide range of Indian foods from snacks, main courses to desserts and also will have a wide range of drinks as well. However, the business will not be only providing products to customers but a service as well. Initially, I intended to only provide a nightlife service, but it would reach a wider audience if the business were to be open during the day as well.
The food that will be served would be made by 4 star chefs and can be catered to suit person’s needs, so it will achieve customer satisfaction. The business will get the materials it would need from wholesalers on a regular basis and the business will run on a demand basis, rather then a flow production. When customers order what they want, it will be made then. If it was to be made before hand, then it could cause loss of profit as a certain product may not be ordered on that day. The following is a sample of what the menu would resemble.
Alcoholic drinks will be sold during the day as well as night, but I.D. will be required throughout day and night to ensure safety and regulations. Drinks will be located at the bar and will serve a wide range of beers, lagers, cocktails, liquors, fruit juices, hot beverages, milkshakes and of course mineral water.
Price
Pricing will have a lot of influence. It will depend on, customers, costs and competition. In order to make profit, I should ensure that products are priced above their average cost. Pricing would need to be done carefully and cannot be either too low or too high but relatively a close to competitors. The sales strategy that I am going to be using is penetration pricing. This allows the business to attract more customers at first, so that customers can be recognisable with my business. This lower pricing will only be applied to the business for the first month of opening and then will go back to which will be the normal price. The reason for choosing this pricing strategy is because it will possibly lead to large sales volume/market shares and therefore lower costs per unit.
Before setting this pricing strategy, I would have to be certain that I have the production capabilities to meet the expected increase in demand. The prices that will be set during my penetration strategy will be 15% added on to the wholesaler price. So for example, if a portion of chicken korma (all the raw materials added up together) was bought for £3.25, during my penetration strategy the price will be set at:
Introductory Price
£3.25 x 15% = £3.74 rounded off price= £3.80
After the first month of opening, the percentage added on will go up to 30%. So again using chicken korma as an example:
Normal Price
£3.25 x 30% = £4.22 rounded off price= £4.25
Once all the prices have been set to normal price, the retail price will not change, but only if wholesaler’s price does go up and sometimes may change as promotional offers only. Buying raw materials in bulk will help increase profits as well.
Promotion
For promoting my business, advertising objectives are simply to inform, to persuade and to remind. To do this, I used primary research to find out what was the best way of doing this.
From my results, it shows that television is the most accessible form of advertising, however, with my businesses budget, television would be out of reach for me. Out of the options, radio, leaflets and local newspapers adverts seem to be the most appropriate form of advertising. For radio adverts, only particular radio stations would be appropriate to target my chosen audience and specific times only. The main time to advertise on radio is when either people are getting ready for work and the way back from work. Also having a website address as a slogan, would help the business develop more, as it can contain more details about the business.
Production and Quality assurance
Production for my business will not depend on continuous output by my employees, but will be made on demand and this will be done by my staff that will be recruited. Before I start recruiting anyone, certain rules apply. As the business classes itself as a bar, all employees need to be over 18 and have no drink related convictions as it may be a bad influence to be working around drink again. The business will need a number of staff with different skills. The restaurant and bar will have two separate groups of staff. One group will be working for the restaurant and the other for the bar. The restaurant will have 3 fully trained chefs and 1 person to wash dishes which will all operate in the kitchen. It is important not to have the kitchen packed, as it can allow the workers more room and comfort for their work. The bar staff will consist of 3 people including myself, but will probably only need 2 during weekdays. There will be 3 waiters/waitresses operating on the actual floor of the bar and taking orders. Also, there will need to be a D.J. for the entertainment.
The skills and qualification will be different for each job role, which are the following:
- Chefs – fully trained with a known qualification in professional cookery and with background experience of working in restaurants and working specifically with Indian food with a minimum of 3-star rating.
- Bar staff – previous experience would be needed, fluent English speaking, preferably with a GCSE in English. Knowledge of alcoholic drinks and Indian food would be ideal.
- Waiters/waitresses – previous experience and fluent English speaking. Knowledge of Indian food and alcoholic drinks.
- D.J – previous background and experience of working with music.
All employees would have to be living near or around the surrounding area of the business. It makes it easier for travel especially when the bar will finish late at night.
Physical resources will require a lot of equipment. For the main floor of the bar, tables and chairs, decorative objects, coloured lighting, sound systems and speakers would to be put around the entire bar. For the bar, a bar would need to be put in, followed by fridges for all the drinks, storage for the glasses, beer pumps, etc.
