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business cw

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Harry Hawes

Introduction

I have chosen to set up a small coffee shop specifically selling iced coffees and similar drinks, being a coffee shop there will be a large variety of teas, coffee however I will not sell any food it will be specifically drink I may incorporate food once the business has established itself. The reason why I didn’t want to market food is because I will not be buying a lot so production would be initially high and there is a lot of competition where I intend to set up; there are three supermarket on the same road.

The name of my coffee shop will be called ‘Cool Bean’ I chose this name because it ties in with what he main products I am selling coffees and iced coffee drinks. I feel this name also relates to my target audience 10-30 yr olds.

The location of my business will be located on West Wickham High Street. I have chosen this location because it is central to both Croydon and Bromely, there are three secondary school and colleges which will be my focused targeted market.

The main aim of my business is to deliver high quality service to my customers and to survive for the first year just to establish my business to the public.

I will run the business as a sole trader/ proprietor I will run the business under this set up as I want to have complete control over finance, decision making and overall design of the business.

It is important I produce a business plan because I gain start up fiancé to get my business going I will need to persuade the bank to loan me the capital. I will asking the bank for a long term loan the amount will be specified later on in the plan. I have sub-headed the sections that need to be included within my business plan they are:

  • Preliminary information
  • Marketing plan
  • Production plan
  • Financial plan
  • Human-resource plan
  • Constraints

The success of my business depends upon the decisions I make. A business plan allocates resources and measures the results of my actions, helping me set realistic goals and make decisions.

A business plan is important to set up because;

  • It act as a  reality check the process of putting a business plan together, including the thought you put in before you begin to write it, it forces you to take an objective, critical, unemotional look at your business project in its entirety.
  • Performance Tool it will help me manage my business and work effectively towards its Success. My business plan will allow me to set realistic goals and objectives for my company's performance, and if maintained, will also provide a basis for evaluating and controlling the company's performance in the future.
  • The completed business plan communicates my company's ideas to employees, lenders, and potential investors, outside my company. Also, the process of planning helps me determine if my vision is realistic, and tells me what I need to do in order to achieve it.
  • Management Development Tool putting together my business plan will help me develop as a manager because it can give me practice in thinking and figuring out problems about competitive conditions, promotional opportunities, and situations that are or may be beneficial or harmful to my business.

Preliminary information this will include the basic information about the company; present, and future. That is, there should be information, about the evolution of the market and product concept. Information is necessary as well about the company's current position.  What is the company's future strategy? What are its goals and what actions are required to achieve its goals?

  • Name  of business
  • Mission statement
  • Location
  • Physical size of business
  • Type of owner ship
  • Goals and objectives

Marketing plan is a key part of business success. You need to decide which customers to target. You need to work out how you will reach and win new customers. You need to make sure that you keep existing customers happy. And you need to keep reviewing and improving everything you do to stay ahead of the competition.

A good marketing plan starts by looking at your overall strategy, and the business environment you operate in. It builds on your own strengths and weaknesses to work out what your marketing strategy should be. It sets out clear objectives and explains how you will achieve them. Perhaps most importantly it looks at how you can ensure that your plan becomes reality.

  • SWOT
  • PEST
  • Ansoff matrix
  • Product life cycle
  • Boston box
  • Primary and secondary data
  • Competition threats
  • Prices
  • Promotion
  • Distribution

Production plan this will include the aspects of the business where there is a product or service. This section will show how they are produced I will include:

  • Production methods
  • Equipment
  • Quantity
  • Timing of production

Financial plan

Think about your sales and marketing strategy, include information on how the product or service will be priced, channels to market, advertising and marketing plans as this will cost my business a lot of capital with no profit straight way.

Details of key employees and their relevant experience are also important, as is operational information like my business location, special equipment and expected employee headcount.

Stating the financing I will need, based on your financial forecasts.

My plan should also include a sales forecast, cash flow forecast and a projected profit and loss account for up to a year ahead a balance sheet will be constructed as well. The figures used must be reasonable - avoid being over optimistic. The involvement of a qualified accountant in preparing these forecasts is recommended.

Human resource plan

This will include 1. The number of employees needed 2. Skills needed 3. Recruitment methods I will use. 4. Training needs of employees.

Constraints I will take into account that there are a number of constraints that may impact on the implementation of my business plan I will show the main constraints which are:

  • Legal
  • Financial
  • Social
  • Environmental
  • Technological
  • Competitive.

Aims and objects

When a sole trader sets up they may have some unstated aims or objectives - for example to survive for the first year. Other businesses may wish to state exactly what they are aiming to do, Tesco want to become market leader in their field and stay there.

An aim is where the business wants to go in the future, its goals. It is a statement of purpose, e.g. we want to grow the business into a franchise.

Business objectives are the stated, measurable targets of how to achieve business aims. For instance, we want to achieve sales over 50% in one year.

A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.

Business Objectives

Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims.

Smart target are set up it clearly states how a business can achieve a goal or objective

S – Specific – objectives are aimed at what the business does, e.g. to increase sale by 25% in the summer period, an objective specific to that business.

M - Measurable – the business can put a value to the objective, e.g. £10,000 in sales in the 6 months of trading.

A - Agreed by all those concerned in trying to achieve the objective.

R - Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available.

T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.

Alternative Aims and Objectives

Not all businesses seek profit or growth. Some organisations have alternative objectives.

Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.

Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.

Charities and voluntary organisations – their aims and objectives are led by the beliefs they stand for.

business may change its objectives over time due to the following reasons:

A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).

The competitive environment might change, with the launch of new products from competitors.

Technology might change product designs, so sales and production targets might need to change.

Type of information

Description

Factors to consider

Name

The name of the business which may give sum ideas to what the business is such as john’s bakery.

  • Gives a first impression of the business
  • Will it go out of fashion
  • Does anyone have it
  • Can people say it communicate with friends etc.

Mission statement

The mission statement gives detail of the aims and objectives e.g. Sony’s to deliver high quality electronics products.

  • Profitable or non-profitable
  • What is its purpose
  • What is involved within the business.
  • What dose it stand for

Location

The location of the business is probably the most important factor to consider as it is where you will be making your money if you pick a wrong location the business will fail.

  • What is the image of the area?
  • How much I will it cost to set up there expensive or cheaper
  • Competition
  • Suppliers close or not
  • Customer potential (population)
  • Built up or not
  • Viable for government grant

Physical size

The physical size is important because it influences everything associated with starting up one; the location, finance etc.

  • What sort of equipment is needed?
  • Will it produced a lot economises of scale.
  • Will it affect the loan amount too big?

Type of business owner ship

The type of ownership needs to be outline as this will affect your finance considerably whether there is unlimited liability or you are responsible for your own loses.

  • Sole trader
  • Partnership
  • LTD
  • Unlimited liability

Sole trader

Being a sole trader is the simplest way to run a business, and does not involve paying any registration fees. Keeping records and accounts is straightforward, and you get to keep all the profits. But you are personally liable for any debts that your business runs up, which can make this a risky option for businesses that need a lot of investment.

Management and raising finance

  • You make all the decisions on how to manage your business.
  • You raise money for the business out of your own assets, and/or with loans from banks or other lenders.

Records and accounts

  • You have to make an annual self assessment tax return to HMRC.
  • You must also keep records showing your business income and expenses.

Profits

  • Any profits go to you.

 Unlimited Liability

As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble.

Partnership

A partnership can be two or more people, and they share both the profits and liabilities of the business. The responsibility and financial risks are shared, but legally all the partners will be “jointly and severally liable” for any business debt incurred.  This means that you personally can be liable for debts run up by another partner. It is vital then to have a partnership agreement in place, so that all partners have equal rights.  

Simple money matters can cause huge problems, especially if the business seems to be profitable!  It is wise to cover all eventualities for you and your partners’ protection, peace of mind and for the long term business benefit.  

As circumstances and expectations change, it is worth asking certain questions such as:

What happens to a partner’s share if they die?

Who has the power to write cheques and authorise payments?

How much holiday can you each take?

What if a partner dies, is on long term sick or wants to leave?  

It is essential to have a formal partnership agreement drawn up so everyone is clear about company ground rules before you start. It should be discussed with your accountant, and then drawn up by your solicitor.

Advantages

  • Shared risk.
  • Shared management.

Disadvantages

  • Risk of conflict between partners.
  • Shared decision making.

Private limited company LTD

A Company owned by shareholders. A limited number of shares are issued, these are owned by family and friends of the business. The business has limited liability.

Public limited company PLC

A Company owned by shareholders. It must have £50,000 of capital when founded, and may allow its share to be bought by the general public (though it does not have to). The business has limited liability.

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

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