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Will a Cyber Café in Wakefield be successful?

Extracts from this document...

Introduction

Will a Cyber Caf� in Wakefield be successful? Contents 1.0 Objective 1 Introduction into the business. To identify a worthwhile business opportunity and method. 2.0 Objective 2 Secondary research into the market. To investigate the market potential with past trends and sales forecast. To identify the local/national competition. 3.0 Objective 3 Primary research into consumer opinions. To assess the potential success of the business through a questionnaire. 4.0 Objective 4 The marketing mix. To focus attention on the different elements of marketing in relation to my business. 5.0 Objective 5 Startup and operating costs of the business. To work out startup costs and direct/indirect costs. 6.0 Objective 6 Financial aspects To construct a Profit and loss account, a cash flow forecast and carry out break even analysis. 7.0 Objective 7 Conclusions and recommendations To decide whether it would be worth proceeding with the venture and making justified comments. 8.0 Bibliography and Appendix 1.0 Objective 1 - Introduction into the business 1.1 Introduction into a feasibility study 1.2 Research 1.3 Methodology 1.4 Target market 1.5 Requirements for chosen business 1.1 A feasibility study is an investigation into the financial viability of a new business opportunity and it requires independent primary and secondary research to determine this. Some of the things a feasibility study should include are: * Objectives and methods * Primary and secondary research * Business strategies * Costs and financials * Conclusions on the viability of the business Key features are research, analysis and evaluation to gain high marks and work must be set out clearly. 1.2 Following analysis of my local area, Wakefield, businesses such as cafes, restaurants and caf� bars are very popular and on the increase due to high demand. I have taken time to visit the Official Wakefield web site and found that there are 12 cafes, 21 restaurants but only 1 Cyber Caf� in the city centre of Wakefield. ...read more.

Middle

I think that customers are less bothered about the prices because if the quality is good they don't mind paying a higher price, which means the Cyber Caf� has to ensure that the quality of food, service and cleanliness are up to standard to help guarantee customers' return. This question gave a good result about how interested in a Cyber Caf� potential customers are, with the majority of people having a positive view towards it. The results can never be 100% accurate as some people may fill in the questionnaire untruthfully to be polite and also, a good response does not always guarantee business. The results give good indication that there is demand for a Cyber Caf� and that people are prepared to try it. I think such a good response was gained because people like to try new things and also Cyber Cafes are a fairly new idea. Wakefield is home to many Caf� bars, which gives the town a modern edge, as do Cyber Cafes. Residents of Wakefield may feel the need to keep up and try these new, modern ideas for themselves. This question was asked to find out about repeat purchases and if the customer liked the Cyber Caf�, how often they would visit. Most people asked said 2-3 times a month closely followed by people who said once a week, therefore regular customers will be most likely to visit either once a week or once every two weeks. This could generate a good customer base if many customers become regulars. To develop customer loyalty service and product must be excellent at all times so customer will not stray to competitors. I think the response depended on when people had the time to visit the Caf� because if people have one day off work through the week that may be the only chance they get to visit and maybe to do work. ...read more.

Conclusion

6.2 Break even Analysis compares a firm's revenue with it's fixed and variable costs to identify the minimum sales level needed to make a profit. As labelled in the graph, the break-even point shows that 8339 customers must visit the Cyber Caf� in one year before any profit is made. This works out at 29 customers per day therefore there is question whether it will be achievable. If this target is not met in the short-term action must be taken in the form of advertising and promotion to attempt to boost sales enabling the Cyber caf� to break-even. If this is not successful the Cyber Caf� will not make enough money to stay afloat and therefore fail as a business. However observation showed that 50 customers could be expected to visit per day. Therefore if my calculations are correct, I have a factor of safety of 18 (56%). This forecast of sales is good because people may not spend as much as I have predicted. 6.3 Cash Flow is the flow of money into and out of the business in a given time period it they can cover long or short periods of time, my cash flow covers 12 months. For my new business the cash flow will help answer questions such as, is the venture viable? How much capital is needed? Which are the most dangerous months? As my business is only just starting up it is expected that the difference between income and expenditure is a minus figure at the start of the year as profit is not yet being generated. A bank loan could be used to cover this if it is needed. Money begins to be carried forward by February and continues to increase after this but it is only an estimate and there could be changes which affect the results. The estimates could differ widely from actual figures because this is an inexperienced firm. 7.0 Objective 7 - Conclusions and Recommendations 7.1 Recommendations 7.2 Conclusions 7. ...read more.

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