Price----If the price that is set for the products is too high then it is easier to lower them than it is to raise them. Demand changes towards price, which is called ‘price elasticity’. Fortunately the competition is weak in the house. There is only a little tuck shop which only sells several products with high prices. In this case, I considered the competition in the house. Therefore I can keep the price high and obtain large profit margin. From this point the pricing strategy that will be Cost plus pricing, this is when the firm calculates and adds a percentage mark-up to determine the price. The percentage mark-up = profit. From the results of the questionnaire, 64% of respondents said that keeping prices low is important (See Appendix 1.10). So from this point “Have A Break” will decide on a suitable price by decreasing certain percent (But the price will be just a little lower) to satisfy consumers needs and wants.
E.g. From my observations of my competitor analysis I have found that the competitors charge around 35p for a packet of Walkers crisps. But I will only charge 20p-30p.
Eventually all the prices I decided are neither more nor less for most customers (See Appendix 1.4). Therefore I feel that if “Have A Break” has the low prices in the house, and we wouldn’t be making a great amount of loss because the demand and supply will not be very low.
Place--- The tuck shop will be located in a phone room inside the house (see Appendix 7) because 67% of students would like it in this location. “Have A Break” will be open in the lunch time and evening, because there are several rules for the boarding house which not allow boarder return to the house in school time. This limits the open time for my tuck shop. So to satisfy consumer needs and also not against the house management system the tuck shop will be open twice a day 7 days a week. The best time will be afternoon (1PM-5PM) and evening (7PM-9PM). (See Appendix 1.2 )
The Unique Selling Point (USP) of the tuck shop will be the ice creams that will be sold. In the summer the net profit margin will be raised because there will be an increase in demand for cooler eating products, a raise in sales means a raise in profits! But in winter, they only make a loss to my business, so I decided to pause this service in winter which means I can avoid this loss.
Promotion-----The methods of promotion are important because it projects a specific image to the target market. The method that will be used is ‘special offers’ (see Appendix 2) as 70% of respondents would prefer this method. Using this method, it will make the tuck shop more popular amongst the students because new customers will be coming to try out free foods. To promote the tuck shop even more, posters could be used ,23% of students did say that this would catch their attention (see Appendix 1.10), this idea will hopefully attract new customers.
By using this Marketing Mix I will hope to achieve a successful tuck shop and achieve the aims I have set myself so far.
5. Business Finance
Balance Sheet---The balance sheet will show what the business owns and what it owes and it’s a legally required document too. Balance sheet displays the business assets (where money is spent) and liabilities (where the money has come from). The payment for business assets, such as the purchase of a new delivery vehicle or a new machine, are referred to as capital expenditure. There are two main ways of drawing up the balance sheet.
- T-From Balance Sheet
The balance sheet has all the assets in one column and all liabilities in another. (See Appendix 3) In this balance sheet the total value of the assets and the total value of the liabilities will be BALANCED.
- Vertical Balance Sheet
This balance sheet uses exactly the same figures as the T-form balance sheet, but organizes the data in a different way, which allows accountant s to assess the financial health of the company. (See Appendix 4)
Profit And Loss Account---A profit and loss account shows all of a firm’s revenues and costs over a period of time, usually one year. But I won’t be sell ice cream in winter, so the profit will change. For my special case, I would like to produce a monthly profit and loss account which can be more accurate. (See Appendix 5).
Breakeven Graph---It is important for any business to have a clear picture of how output and sales will affect profit or loss. In particular, it is significant to know the level of sales necessary to avoid any loss. This is called the breakeven point (the point that Turnover line cross Total Costs line) A breakeven chart is produced in a business because it shows the level of sales required to cover all the costs. When a business ‘breaks even’ their total sales revenue equals their total cost (TR=TC) Fig.1 is the break-even chart for my tuck shop (See Appendix 6). I found the break-even output product is 600 items. Therefore Have A Break will need to sell 600 items per month in order to break even.
Sources Of Finances---All businesses want to invest form time to time. When most of entrepreneurs set up their own businesses, they need to obtain certain amount of money. This money can be obtained from internal or external sources of finance. For Detail see Appendix 9
To conclude the financial section of my business plan I will be using internal and external sources of finance. The internal finance will come from my own savings, which will be £300 and the external source of finance will be obtained by bank which will be £1000 in total (Long term: £500, Short term: £500)
Product:
6. Evaluation
I feel that the opening of the tuck shop is a very good idea. I think the students of the house will be supportive of the house tuck shop and will purchase goods from the tuck shop, I know this because of the findings of my research.
Arguments which might be put against the tuck shop:
People might say:
‘There are many other places near house to buy food from, so why Have A Break?’
‘How do we know that Have A Break will keep their prices low?’
‘How do we know that we can trust your workforce?
Arguments that might be put for the tuck shop are:
‘The house need more places where students sell the food and which means there is more of a customer and student relationship’
‘The house needs more places where they satisfy consumer needs and wants.’
‘Prices in the house need to be kept low and introducing a new tuck shop will be able to do this.’
Further information that I would like to have so that it will help me to decide whether opening a new tuck shop is a good idea is:
What will future trends be like? These are factors like:
How will the school size change over the years?
Economic situations
Social attitudes
Price list
1. Would you like a tuck shop being set up in the house?
Dislike Don’t mind Like Quite Like
2. When would you like the tuck shop to be open?
Morning Afternoon (include Lunchtime) Evening
3. Would you like ice cream are sold in tuck shop?
Dislike Don’t mind Like Quite Like
4. What do you think the price after read our price list?
Very Expensive Expensive Fine Cheap
5. Where do you think is the best location for the tuck shop?
Duty Room Kitchen Common Room Phone Room
6. How many packs of crisps do you usually buy a week in average?
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15+
7. How many cans of drinks do you usually buy a week in average?
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15+
8. How many packs of chocolate do you usually buy a week in average?
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15+
9. How many cones of ice cream will you buy in summer in average?
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15+
10. Which aspect of our tuck shop is the most important in your mind?
Lowest price High quality product Place
More product types Promotion
