Floppy disks
Blank CDs
Blank DVDs
Disk holders
Nothing
4. Do you think that membership would be a good idea where you pay a set payment and get unlimited access for a year, month or week?
Yes
No
5. How much would you be prepared to pay for monthly membership?
Below £15
£15-£25
£25-£35
£35 +
6. Do you think that computer lessons would be good idea?
Yes
No
7. How far is the nearest internet café to where you live?
<1mile
1-2 miles
2-3miles
4+ miles
8. How regularly would you visit the internet café?
Once a month
Once a week
Twice a week
Every other day
Every day
9. Choose one of the names that you think will be the best for the internet café
Surf da net
James’ internet café
World Wide Web
Other………………………………
Thank you for taking part in my questionnaire
Signed………………………………
Questionnaire 2 tally chart
How much would you be prepared to pay for an hour on the internet?
Would you also like the internet café to sell quick snacks and drinks?
Would you like the internet café to sell other products like electrical items, tick which one you would most like to see on sale.
Do you think that membership would be a good idea where you pay a set payment and get unlimited access for a year, month or week?
How much would you be prepared to pay for monthly membership?
Do you think that computer lessons would be good idea?
How far is the nearest internet café to where you live?
How regularly would you visit the internet café?
Choose one of the names that you think will be the best for the internet café
Second questionnaire analysis
How much would you be prepared to pay for an hour on the internet?
This graph shoes me that the majority of people that I questioned would be prepared to pay £1-£2 but both below £1 and £2-£3 were close so I should take this into account when I decide what price to charge.
Would you also like the internet café to sell quick snacks and drinks?
Everybody that I questioned thought that the internet café should sell quick snacks and drinks which tells me that I should sell these as they would be popular.
Would you like the internet café to sell other products like electrical items?
This shows me that all of the items were very popular but especially mp3 players, as each one has quite a high percentage I will probably sell all of them.
pDo you think that membership would be a good idea where you pay a set payment and get unlimited access for a year, month or week?
This shows me that the majority of people that I questioned would like the internet café to provide a membership service, so I will make the membership service available.
How much would you be prepared to pay for monthly membership?
This shows me that I should price my monthly membership at around £15 - £25 as this is what nearly half of the people that answered.
Do you think that computer lessons would be good idea?
The majority of people that I questioned said that they would like computer lessons to be available, so I will have to employ somebody with enough qualifications to be able to teach the lessons.
How far is the nearest internet café to where you live?
This shows me that the majority of people I questioned have to travel more than 4 mile to get to their nearest internet café, so if I put my internet café in their local area it will make it a lot more convenient for them to travel to.
How regularly would you visit the internet café?
This shows me that my internet café could be quite successful as a lot of people said that they would visit the internet café twice and once a week, this tells me that I may have to purchase a lot of computers to cater for the customers.
Choose one of the names that you think will be the best for the internet café
This chart shows me that more than a third of the people that I questioned would like the internet café to be called “Surf da net” although “James’ internet café” was also quite popular.
Pricing strategy
For my business to go well I will have to make sure that I price my products correctly. If a lot of people start to come to my business then I can put up the prices in order to earn more of a profit, but If not a lot of people are coming to my business then I will have to reduce my prices so that I can attract more customers.
There are many ways of pricing a product but these are the main types:
-
Cost plus pricing: This is where you add a percentage of the cost to make a reasonable profit.
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Competitive pricing: You are deliberately setting a low price in order to gain a share of the market. This type of pricing could lead to a price war.
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Promotional pricing: Setting a low price or using special offers in order to sell off old stock or stock with a low demand.
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Creaming/Skimming: Setting a high price so that your product looks good and claim it as a luxury product.
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Price discrimination: This is when a business sets different prices to different market segements.
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Loss leaders: This is a pricing strategy, which is based on marketing other firms. This sort of pricing is usually used by computer retailers.
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Penetration Pricing: When a business sells a product at a very low price in order to get people into their shop to buy more expensive products.
The type of pricing that I am going to use is Creaming/skimming, I am going to use this because my product is better than other competitors as it is using a lot faster computers and a lot better service, I am also using this because people in Thornton currently have to travel into town to use an internet café and so people will be prepared to pay a higher price. I will price my internet access at £2 - £3 as this is what the public said they would be prepared to pay for an hour on the internet.
Product Life Cycle
There are 4 stages to the product life cycle.
- Introduction
This is when the product is first introduced into the market – sales are low until customers become aware of the business and its benefits. I could introduce my business before it is opened – this will make customers previously aware of the business before it is launched. The advertising costs are typically high throughout this period as I would want to rapidly increase customer awareness. During an introductory stage the firm is likely to incur additional costs associated with the initial distribution of the product. In the introductory stage there is probably a loss in capital and no profit is gained.
- Growth
This is a period of rapid revenue growth. Customers become aware of the product and its benefits so sales increase. Once the product has proven a success sales will increase more as retailers become interested in carrying it.
- Maturity
This is the most profitable stage. Sales continue to increase although at a steadier pace. The brand awareness will be strong therefore advertising costs will reduce. The primary goal throughout this period is to maintain market share and also to extend the product life cycle. This could include releasing a new better improved version of the existing product.
- Decline
Eventually the sales begin to decline as consumers taste change and newer better products are released. During this stage, the producer has 3 options: to maintain the product in a hope that competitors will exit – they will reduce costs and find new uses for the product. They can also harvest the product, reducing market support and coasting along until no more profit can be made or they can discontinue the product. This means that there is no more profit to be made or there is a successor product.
Motivation theories
As I will be employing staff to work in my internet café I will need to understand how to motivate them so that I can get the best possible work out of them, I have researched on motivation theories and these are the main theories:
McGregor’s theory
McGregor's theories look at the different ways managers have to manage different types of people. There are two theories: theory X and theory Y.
Theory X
Workers are only motivated by one thing - money!
They are selfish, lazy and hate work.
They need to be closely controlled and directed.
Theory Y
Workers are motivated by many different factors apart from money.
They enjoy their work.
They will happily take on responsibility and make decisions for the business.
Maslow’s theory
-
Actualisation :Self fulfilment cognitive needs
-
Esteem : Strength, Reputation, confidence, Importance
-
Social : Affection, Belongingness
-
Safety: Security & stability, Dependency, Protection Freedom from Fear.
-
Physiological : Hunger and Thirst, Sex
Herxenberg’s theory
Herxenberg suggested that there are motivators that increase a person’s job satisfaction. These include achievement, recognition, the work itself, responsibility advancement and growth. He also suggested the existence of Hygiene Factors that act as de-motivators. These include company policy, supervision, working conditions, interpersonal relations and salary. Motivators can produce long term positive effects whilst hygiene factors tend to cause only short term changes. In general, motivators relate to what a person does whilst hygiene factors relate to the situation in which the things are done.
McClelland’s Theory
McClelland proposed a motivation theory based on three basic needs.
The need for achievement
- Achievement
- Personal responsibility
- Feedback (to help an individual to measure achievement)
- Moderate risk (to avoid excessive risks)
The need for power
The need for affiliation
- Acceptance and Friendship
- Co-operative (cooperating with individuals & groups)
With this research I now know how to motivate my staff which will help me to get the most out of me employees
Market segmentation
With my business, I will need to aim my products and services at a particular market segment. Markets can be segmented in different ways such as:
- By age
- By race or religion
- By gender
- By interest & or hobby
- By income
- By education
My target market will be young people aged 10 – 30, mainly males this is because people of this age and sex are interested in computers and internet gaming. There is not a specific segment of people which I will aim at because nowadays nearly every job involves something to do with computers so that is why I am not aiming at a specific segment.
There is one segment in the market that I may focus on which is interest or hobby as I feel that only people that are interested in gaming or internet messaging will visit my internet café, although nowadays nearly all teenagers and young adults are interested in gaming as a wide variety of games are available.
Finance
To finance my business I have to provide the sum of £7500 which both of my partners also have to do. To get my share of the capital I have found out that there are many ways to borrow the money, here are some of them.
Bank loan: If I was borrowing money from a bank then I would have to pay a set amount back each month which is based on the amount of the loan and the duration. I could choose from a fixed interest rate loan (which means that I pay a set interest fee even if interest rates go down or up this is risky because if interest rates go down then I could have ended up paying a lot less) or a loan that I pay what the interest rate is at that time which means that if interest rates go up then I will be paying a lot more but if they go down I will not pay as much. The disadvantage of a loan is that the lender may ask for security (i.e. my house) on the loan which is so that they are sure that I can repay the loan. I have visited the main high street banks like Barclays and Nationwide and collected leaflets about these loans which are in the appendices.
Family members: I could borrow money off my family members. This may not be ideal as I may not be able to borrow the amount of money I need, but an advantage of this is that I wouldn’t have to pay high interest rates as I would with a bank loan Also I would not have to stick to strict repayment dates.
I have chose to get my share of the capital from My family as my mum and dad have said that I would be able to borrow £7500 of them but I will have to pay them £320 a month which works out at 2 years to pay off the loan.
Businesses in Thornton
Businesses in competition with me
These are the nearest internet café to Thornton, they are in Bradford city centre as shown on the map. I have shown the addresses of them below.
Where my internet café will be
Name: Double cross
Address: 31A Westgate, Shipley, BD18 3QX
Tel: 01274 717974
Name: Silicon Sandwiches
Address: 1–3 piece hall yard, Bradford, BD1 1PJ
Tel: 01274 722114
Fax: 01274 722114
Name: Matrix Technologies
Address: 29 Morley St, Bradford, BD7 1AG
Tel: 01274 394111
Name: Adams Deli
Tel: 01274 420023
Address: 12 Mannville Terrace, Bradford, BD7 1BA
Places where I propose to place my internet café
Old computer store (LJ Computing)
Old flower shop
Old newsagents (Londis)
Old sweet shop
I have decided to situate my internet café at the old sweet shop, as it is on the main road in Thornton and therefore will attract a lot of publicity.
Parking is available for customers on Thornton road I have found out that this property is available to buy and it costs £130,000. It is also the biggest out of the four properties which is essential as I require a lot of room. This is how I plan to set out my internet café.
Down stairs Upstairs
toilets
Vending
Machines
Kitchen
Cashier and admin computer
2 xboxs with xbox live
5 computers
5 computers
Population of Bradford
This information backs up my first questionnaire results as in my questionnaire more than 50% of people were aged 0 - 40 and in this table it shows that nearly 50% of the population of Bradford are also 0 – 40.
Types of businesses
There are 4 main types of businesses:
- Sole trader
- Partnership
- Private limited company
- Public limited company
1). The sole trader
In a sole trader there is only one owner, who is responsible for all of the financial issues and all decision making.
Advantages
- Owner makes all decisions
- Owner keeps all profit
- You are your own boss
Disadvantages
- Owner is solely responsible for all losses/debts
- Sole decision making can be a heavy responsibility
- Problems if you are ill or want to go on holiday
- You have unlimited liability
Unlimited liability means that if the business goes into debt and cannot pay back what it owes. Then the owner will have no choice but to sell their own belongings to pay for the debt that they are in.
2). Partnership
A partnership can consist of between 2-20 people
Advantages
- More people to contribute the capital
- More people to share in the running of the business
- Fewer problems with taking time off
- Easier to make decisions
Disadvantages
- The profits have to be shared
- There can be disagreements
- You have unlimited liability
3). Private limited companies
Private limited companies must have ‘LTD’ in their title. There is no limit of owners. The owners are called shareholders. Private limited companies can only sell share privately i.e. friends and family
Advantages
- Limited liability
- Can raise more money as there are more investors
- Fewer problems with holidays/illnesses
- More people to contribute ideas and skills
Disadvantages
- All profits have to be shared
- Possibility of disagreements
- Decision making takes longer
4). Public limited company
Public limited companies or PLC’s are the biggest type of company that you can be. There are no limit of owners. Public limited companies can sell shares publicly at the stock exchange.
Advantages
- Limited liability
- Can raise more money as there are more investors
- fewer problems with holidays/illnesses
- More people to contribute ideas and skills
- Can sell shares publicly
- can become a lot bigger than other companies
Disadvantages
- All profits have to be shared
- Possibility of disagreements
- Decision making takes longer
From this research I have decided to run a partnership as it will run more efficiently as I feel that running the internet café on my own will be too much of a job so having a partner will make the running of the business a lot more easier.
Now that I have decided to run a partnership I will have to draw up a deed of partnership so that if there are any problems in the running of the business i.e. arguments between partners or profit sharing we will be able to refer to the deed of partnership so that no argument will follow and it will be fair.
Resources
Total(including VAT): £10120.90
Deeds of partnership
Between
Name: Mr James Richard Braid
Name: Mr Dipen Patel
Name: Mr Dale Marsden
The name of our business will be:
“Surf Da Net”
The business will
Provide internet access and online gaming to the public using the I.C.T skills of James Braid and Dale Marsden
Each partner agrees to provide the sum of
£7500, which will be used to purchase all of the computers and furniture and all the computer accessories i.e. floppy discs and memory sticks, it will also be used to pay for the deposit on the property, £1500 of the capital will be spent on the decorating of the property which will involve new laminate floors throughout and all the walls painting.
The duties of the partners will be as follows
Dipen Patel, Accountant, will manage the accounts and will arrange all of the necessary paperwork for insurance and tax as it is due, he will also be in charge of advertising the business by means of flyers and posters.
James braid, Manager, Will work in the store serving customers and purchase stock for the shop as it is required. He will also be teaching the computer lessons for customers who would like them.
Dale Marsden, Technician, will fix any problems with the computers and will help James Braid purchase new stock, he will also manage the store when James Braid is teaching the computer lessons.
Employment
If any workers are to be employed by the business, then all three business partners must agree on whom to employ and how much to pay them.
Hours
Each partner will work equal hours unless a partner is off ill or on holiday
The Bank account will be
In the name of “Surf Da Net” and Two signatures will be required for all banking, one of which must be Mr Dipen Patel’s.
Voting
Each partner will have equal voting rights
Profits/losses
Each partner will each receive an equal share of the profit/loss.
Wages
Each partner will be allowed to draw a wage decided by Mr Dipen Patel
Leaving the partnership
Should any partners retire, Die or otherwise wish to cease being a partner then they agree to the following:
All outstanding debts to the business will be paid of by the partner or by their estate: The partner that has left will be entitled to draw his share of that year’s profit depending on how far through the year that they left.
Signed……………………………………………………………………………………………..
Witnessed………………………………………………………………………………………
506Thornton Road
Thornton
Bradford
BD13 3AQ
Tel: 01274 833563
E-mail:
Advertising
To advertise my business I have designed a leaflet which I will send door to door to people that live in Thornton and the surrounding areas the leaflets will also be available in my store so that my customers will be able to take one home and have the information on prices and opening times at home with them. I have also designed a poster which I am going to stick up around Thornton I have also asked the newsagents on market street if it is ok if I stick the poster in the window, which they agreed to, they have also said that they will hand out my leaflets to their customers so that more people know about my business. Promoting my business this way is a good idea because it is cost effective and lots of people will get to know about it and hopefully become good customers.
Conclusion
In conclusion to this investigation I think that there is scope for an internet café in Thornton as I have found out through my research and knowledge of Thornton that there is nothing for young people to do other than messing about, I believe that my internet café would solve this problem as young people would enjoy using the internet with their friends and also playing games on the internet against hundreds of other people. My questionnaires showed me that the majority of people in Thornton are under 30 which made me aim my business at these people. My questionnaires also helped me decide which business the people in Thornton would most like to see and the majority of people did choose an internet café.
I found out that my only competition would be in Bradford city centre which for some young people is quite far to travel just to use the internet so I believe that my business will be successful as young people who live in the local area would come to use the internet. I think that my business would become quite popular and well known as I will make sure that people living in the local area know about it, by sending out leaflets and sticking up posters
Evaluation
I think that to improve my investigation I could have found out more research and investigated the local people more i.e. hobbies and interests. I think that my first questionnaire was not detailed enough as the research that I received from it was not enough to understand what the local people wanted and why. My second questionnaire was a lot better as I asked more detailed questions and found out enough information from it.
I think that I should have approached my competitors earlier on as a couple of them wanted to help me with my research like the resources section and promotion, but because I approached them too late I was not able to use this opportunity, although I did manage to find out the information but it was second hand information.
I do think that there is scope for an internet café earlier although I believe that I should have aimed my first questionnaire mainly at the younger people so that I could get a clearer picture of their wants and needs.
If I was to complete this investigation again I would plan my time more carefully so that I could approach businesses and banks a lot earlier so that I could get as much research as I could. If I had more time I would also contact other internet cafes to find out how they ran and promoted there businesses.
Overall, I think that my coursework is ok with some good research although if I had researched further then I would have been able to make some more discoveries throughout my investigation.
1st questionnaires
2nd Questionnaires
Business plan, Competitors leaflets, Bank loan leaflets`
