Apple: ‘Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings’
After researching into some of the worlds most successful businesses mission statements, I now have a clearer understanding of how I can create my own.
My Mission Statement
Our milkshake, our mission:
-“A happy customer is a returning customer”. We aim to satisfy our customers with the products and service offered and as a company we will ensure that our customers receive a prompt, friendly and reliable service.
-To guarantee that our staff are treated equally and with respect along with ruling out any misconduct or unfairness. To ensure staff are paid on time with no delay or hindrance.
-Finally we aim to maintain clean and comfortable premises and to operate in accordance to the Health and Safety Act 1974.
We will put our mission statement on our counter in the milkshake bar, in a plastic holder so that it is visible to all our staff and customers. We as a company are proud to have aims and objectives to enhance and develop our business.
I hope that in the future my business would have expanded and would have become more successful and well known.
Aims and objectives
The difference between aims and objectives are that aims are the goals that I will set myself for my business to achieve and objectives are the things that I will do to achieve my aims.
There are two types of objectives, short term and long term. Short term objectives normally last for about 12 months, whereas long term objectives last for up to 5 years. The important of short term objectives is that it leads the business in the right direction so in the future it can achieve its long term objectives.
A major difference between aims and objectives is in terms of specification. An objective is always as specific as it can be, whereas, an aim as compared to objective can be considered as slightly vague. Aims can be considered as a general statement. I need to make sure that the objectives that I set my business are SMART that means that they are Specific, Measurable, Achievable, Realistic, and are Time bound. Specific meaning that my aims will need to be well defined and clear to anyone else that may be involved in the achievement. Set your goal as specific as possible. Measurable meaning I need to be clear about where I am and how far away the completion of your goal is. I need to find a way to monitor my progress. I need to make sure my aims are Achievable. I have to think about whether we have everything necessary to achieve our goal. I have to think about the fact of whether my aim is Relevant or not. I need to know if the aim can be achieved or not taking into account the resources, markets and competition etc. Last of all I need to think about weather my aim is Time bound; I need to know if I can achieve my aims by a certain time.
Aim 1: To ensure the company sells 16,195 milkshakes per year.
Objective: the business wants to sell 16,195 milkshakes a year and by doing this we have set ourselves a target of selling 1349 a month, 337 a week so approximately 48 a day. This is a reasonable amount for a new business as it is not a high target to meet. The company may sell more than this target amount but to be on the safe side it is better to target ourselves less than to target more. The business thinks that selling 48 milkshakes a day is an achievable target as it isn’t a large amount and the more popular the business gets the higher the market volume will grow. With the resources that the company has, I think that it is realistic to make a profit with the money we make from the milkshakes.
Aim 2: to ensure that the customer receives the care and attention that he/she expects.
Objective: As we are a local community business I think an important aim would be to keep the locals happy. We, as a business, want to ensure that all of our customers are satisfied when they leave our milkshake bar and by monitoring this we encourage customers to give us feedback, both positive and negative. We want them to write feedback, suggestions and complaints to tell us their views and feelings about their experience with us, this enables us to see where we are going wrong and what we need to change to ensure that it doesn’t happen again. This could be done by email or we could have review cards in the restaurant for people to fill in and pop into a box. If we work in accordance with our mission statement then we should achieve everything we want to achieve with no hindrance. It is realistic to meet our aim as customer care is our number one priority and we always treat them with their care they deserve and expect and also with our fabulous milkshakes the customers should and will come back to us. The business sets no time to make this aim as it is an aim that the company will work towards for the whole of the businesses existence
Aim 3: Survival
Objective: It is important for all new businesses to survive. They have to make sure it doesn’t have a lack of resources which may make it fail, we will do our best to keep a positive cash flow, we will find new products to sell which will increase our profit and lastly we will make sure we do not make bad decisions at the start of the business.
Aim 4: Making the business better known to people.
Objective: It is very important that the business becomes better known so that we can expand our business in the future to new people and help us become more successful. We need to advertise the business, e.g. creating posters, websites and business cards. If we start our business for the first year we may not have as many customers as the second year because we are a new starting business so we can set ourselves a goal that by year 2 we will have doubled in customers. I think it is very relevant that we set this goal for ourselves as customers are the main priority as we need to sell our products in order to make a profit. I think the goal is achievable if we put our heads to it so that by the second year we would have doubled the customers we have in the first year.
Short term objectives – survival
All business, no matter how big or small they are, undergo a survival process when they first start their business. This protects them in the future if they face difficulties because of competition in rivals, lack of demand for their product or even if they make poor decisions in the start of their business which have affected them now. Most firms start small then tend to grow over the years. The problems that the company will encounter along the way might be things such as:
- Lack of experience in the workers or the manager
- Lack of resources
- Problems which the company didn’t take into consideration such as unexpected costs
The decision makers in the business might make mistakes during the early stages of the business and this could affect the main objective of the business.
Long term objective - expanding the business
Everyday new businesses are opening in the hope of succeeding, but sadly the majority of them are failing, mainly because of the recession. The businesses that do survive expect to grow and expand which increases their sales and profit. A business can grow by selling larger quantities of products or even joining together with another company. As businesses grow, they are sure to encounter issues and challenges along the way which they would stumble across in a small business.
Diversification
When a business produces products that are already on the market or are similar to another product, it is called related diversification and this is what most businesses come into contact with when they tend to expand their business and produces new goods. For example:
- A coffee bar might start selling food to increase its sales in drinks and so more people go to their bar
- A real estate might start to do property management to boost the amount of customers they have.
Unrelated diversification is when a business starts selling products in a different area this expands their sales and profit. For example a business might only sell electrical such as iPods, televisions and laptops, but then they might start selling electrical watches to make the business bigger. Virgin airline for instants once only sold soft drinks, now they sell airline tickets, train tickets and a financial service. This shows how big a business can expand to.
Corporate image
All businesses need to sell themselves so most business have a corporate image. The image promotes the business as a whole instead of individual products. It has double in recent years in the amount of money being spent on corporate image. For example, Cadburys have their name printed on all of their chocolate products. The reason for this is so that they can sell themselves.
There are two reasons why businesses need to sell themselves:
- They need to be seen responsible to good citizens, so this means communicating with them
- They need to become a known brand. This means that there corporate image is a constructive and optimistic one. Companies often use slogans and catch lines so people can identify their product easily.
Environmentally friendly
Business activities can sometimes have an effect on the environment. For example, a new business could be set up in a derelict area which could bring advantages for the citizens living there as there may be new grass areas with benches for pedestrians to sit on. As the world is becoming more environmentally friendly, businesses are becoming more aware of what it needs to do to be friendlier to the environment as well. There are also negative impacts that some businesses can have on the environment also. These include:
- Air pollution - which is made by car emission coming from customers visiting retail outlets.
- Water pollution because of people dumping waste.
- Noise coming from factories and traffic.
- Natural habitats being destroyed because of building works on premises. These can be controlled by such things as:
- Special laws which unauthorized firms to pollute the environment.
- Making petrol and diesel prices higher so people do not use their car as much as they normally would.
- Business having to compensate because of disrupting business activities. For example, some airports have to give grants to nearby houses in order for them to buy double glazing so the airplane noise is less noisy.
- Road tolls reducing traffic as car users would have to pay to use the roads. This would help cut car pollution.
As my business already has premises I will not have to consider natural habitats being destroyed because I will not be carrying out any building works. My business is in a popular area therefore most people will walk to buy my milkshakes instead of using their car which will result in less car noise and less pollution for car emissions. My business will not be operating any large machinery therefore there will be no noise coming from my premises.
In my business I will be using plastic cups for the milkshakes which are recyclable which will help the environment as they will not go to waste when people throw them in the bin as the bins will be taken to the local recycling ground. Local citizens may like this and therefore come to my milkshake bar and spend money as they know that they are helping the environment to becoming environmentally friendly.
Legal form of ownership
The first thing a business owner has to do is find out how the business will be structured, such as:
- The level of control they want to have over the business
- The size of the business they are going to attain
- The level of structure they will be dealing with
- How vulnerable the business is to lawsuits
- Tax implications of the different ownership structures
- Expected profit of the business
- Whether they will re-invest earnings into the business
- If they will need to access cash out of the business for themselves
Law affects business and employers are affected by employment laws. There are different types of legal forms of ownerships for small businesses.
Private sector: includes all the businesses that are set up by individuals or groups of individuals. In the private sector there are different types of businesses, some are small retails with a single owner. Others are big international companies such as Coca Cola. All businesses are different and vary depending on the kind of ownership and legal form they undertake.
Unincorporated businesses are businesses that have no legal differences between the owners and the businesses. Everything that is done within the business is in the name of the owner or owners and these firms are usually relatively small and are either owned by one person or a few partners. In corporate businesses, the business has a separate legal identity from the owner. In which case the business can be sued, taken over and sometimes even liquidated.
The different types of legal forms of ownerships are:
- Partnership
- Private limited company
- Public limited company
- Franchise
When deciding the type of ownership I want for my business I need to take into consideration the advantages and disadvantages for each form of ownership.
Sole trader
The most common type of enterprise would be a sole trader as it is the easiest and least costly way of starting a business and also it is the most common form of a private sector. There are likely to be fees to obtain the business name registration and other necessary licenses.
Advantages of a sole trader:
- There are not many legal restrictions that need to be considered. This therefore deducts the expensive administration costs that other businesses many need to pay out for.
- All the profit made after the tax is kept by the owner.
- Sole-traders can make their own decisions without the need to ask for other people’s opinions and interference. One of the main reasons why people set up to be a sole-trader is because of the amount of independence that they have.
- Sole-traders can decide how many hours they work, when they want to go on holiday and they can take the customer’s needs into account and act upon it.
- Because sole traders can offer a personal service to their customers, customers like this better and are willing to pay a higher price for the service as they can deal directly with the owner.
- Some business with a sole-trader ownership can be eligible for government support.
Disadvantages of a sole trader:
- Sole-traders have unlimited liability which means that if they get into debt, the owner is responsible and this means that they could end up selling personal possessions or it could even come to them having to sell their house.
- Most sole-traders when starting up the business have to put their own personal savings into the business, or get a bank loan. They can also find it hard to raise money.
- If the owner is the only person in the business it can have an impact on the company if they are ill as there will be no one to cover them.
- The owner can be sued by a customer because sole traders are unincorporated.
Partnership
Another form of ownership would be partnership. A partnership business can be owned by 2-20 people. There are several types of ownership. The two most common types are general and limited partnerships. A general partnership can be form simply by an oral agreement between two or more people, but a legal partnership agreement drawn up by attorney is highly recommended. However legal fees for having a partnership agreement are higher than being a sole trader. Partnerships are often found in certain professions such as:
- Accountants
- Doctors
- Solicitors
- Estate agents
A partnership has no legal formalities but partners need to draw up a deed which states partner’s rights if a dispute ever occurred. It covers problems such as how much capital each partner will put in, the procedure of ending the partnership and the rules for taking on other partners.
Advantages of a partnership
- Problems can be shared and discussed.
- New skills and ideas introduced.
- More capital can be raised, so that expansion is easier.
- No legal official procedure is needed to set up the business.
- Each partner can specialise in a separate part of the business. This can improve the everyday running of the business.
- Because there is more than one owner, the business can raise more finance in comparison with a sole trader.
- If a partner is off sick, the other can cover for them.
Disadvantage of a partnership
- Profits must be shared in contrast with a sole trader where they get to keep all their profits that they make.
- Disagreements can always take place when there is more than one person and the partners can disagree with what another partner is saying.
- Each person is liable for debt as they have unlimited liability.
- The partnership is limited therefore the business can only have a maximum of 20.
- Customers can sue the company as it has uncorrelated status.
- If a partner dies, the family of the partner is entitled to money that was invested into the business.
There are other forms of business that are less risky than sole traders and partnerships. These are private limited companies and public limited companies. Private shareholders usually own private limited companies, which would be friends or family. People choose to have this type of ownership as each shareholder has limited liability, can raise extra capital; profits have to be shared between people, financial information publicly available. You need certain legal requirements to set up and run the company such as memorandum of association, articles of association and have to hold AGMs.
Private Limited Company
There are two types of limited company, private limited and public limited. Private Limited companies are somewhat smaller than public limited companies and tend to end their name with Ltd or private limited companies. All the share holders need to agree on all the transfers beforehand and all the shares are transferred privately. Ltd businesses are primarily family run and the firm directors are the share holders who are concerned in successively running the business.
Advantages of private limited companies
- People are willing to risk their money as they know shareholders have limited liability.
- More capital can be raised as there is no limit to the amount of shareholders in the business.
- The business will still continue if a partner dies, all that will happen is the shares will be transferred to the other owner(s).
- Shares can only be sold to new members if all the other shareholders agree. This means that the control of the business will not be lost to the unknown.
Disadvantages of private limited companies
- Because there can be many members in the business, the shares may have to be split between many people.
- There has to be a legal procedure to set up which costs a lot of time and money.
- Shares are not allowed to be sold to the public so this can limit the amount of capital that could be raised.
- If a shareholder decides to sell their shares, it may take a long time finding a buyer.
Public limited company
Public limited companies are considerable larger than private limited companies. All public limited companies end in PLC. In the UK there are roughly 1.2 million limited companies, but only one percent is public limited companies.
To become a public limited company you need to have a Memorandum of Association, Articles or Association and Statutory Declaration. These documents show that all requirements have been met. After this, the company will be given a certificate which is normally common to publish in a prospectus.
Advantages of a public limited company
Private limited companies have some of the same advantages are public limited. These include advantages such as all shareholders have limited liability and also the firm will continue to trade if one of the owners dies. Other advantages include:
- Financial institutions are more willing to lend money; this means that it is easier to raise finance.
- Production costs can be lower as firms can gain more economic sale.
- Because of the size of PLCs, they can dominate the market.
Disadvantages of public limited companies
- Due to their size, they will find change hard. This is because they are not flexible.
- To protect shareholders, the Company Act controls the way they are operated.
- They cannot have personal dealings with customers due to their size.
- The public can view their accounts so competitors can hold this as an advantage to them.
- It can be very expensive to set up
Franchise
There are many types of franchises today such as the Body Shop. The different types of franchising that exists are:
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Dealer franchise – Companies such as petrol, brewers and vehicle producers use this type of franchise. There has to be a written agreement from the franchiser to the franchises to say that they can sell their product. The agreement covers areas such as stock levels, sales target and the backup service franchisor.
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Brand franchising – this means that an inexperienced franchisee is not allowed to set up from the start. McDonalds use this type of franchise because they already have a reputation. The customer will know they are buying the same product if they are in London or they are in Paris.
Benefits to the franchisor
- All the risks are shared equally
- It is guaranteed that there will be money if the franchise loses some because all royalties are based on turnover and not profit
Advantages to franchisees
- The product can be promoted worldwide if the franchiser decides so.
- The franchisor can carry out the training and administration services.
- The chances of failing reduces as the product being sold is recognised
The ownership that I have chosen
I have chosen partnership because it is the most suited to my business plan and there are no legal formalities that need to be completed before setting up. There are two of us that potentially own the business. I think that having this type of ownership would be less stressful as you get to have two options when it comes to the decision making for the business. When problems arise we can share and discuss them with each other. Also if you come up with an idea your partner can give you a verdict on whether they think your idea is good or not, you can also elaborate your ideas to see if you can improve them.
It would be good for me to go into a partnership with my partner as both of us specialize in a different area of the business. My partner would deal with the accounts and advertising side of the business whilst I could specialize in the day to day running of the business such as opening up in the morning and closing up at night, this could help and improve the everyday running of the business. Although we may not work the exact same hours each day we will both equally work the same amount of hours each week and put in the same time and effort.
A benefit for choosing a partnership business is that when one of us is on holiday or sick the other person can cover for us whilst the other one is away. New skills and ideas can be introduced as there are two of us in the business. Because there is more than one owner, the business can raise finance easier.
Stakeholders
In a business there are two different types of stakeholders, internal and external. Sometimes the stakeholder can be both. The main internal stakeholders are the owners, managers and employees. The main external stakeholders are the customers, lenders, the local community, suppliers, pressure groups, the government and investors/shareholders. In some large business there are often thousands of shareholders, who each own a small smart part of the business.
A stakeholder is someone that has an interest in a business and wants to become part of the outcome or success of the business. Most commonly this refers to people such as shareholders and creditors, who have money invested in the endeavour. However, a stakeholder can also be an employee of the company and even family of employees. A shareholder is a stakeholder simply because he or she has invested money in a company. Therefore, that person expects to see a good return on the investment.
Possible stakeholders include:
- Owners or shareholders
- Managers
- Employees
- Customers
- Government
- Suppliers
- The community
Owners or shareholders
The owner of the business is a stakeholder who looks for a return on the capital put into the business. It is the owner’s responsibility to formulate business objectives to keep the majority of the stakeholders happy. Owners want to cut cost to maximize profit but this isn’t always what the stakeholders want as they might not want the business to import goods or use cheap overseas labour for example. This can affect how aims and objectives are met which can put them at a disadvantage.
Managers
Managers organise, plan and control the business, make decisions and are accountable to the owners.
Employees
Employees have a big interest in the business as they want the business to do well because if the business fails then they may be made redundant. Employees know they have to work hard in the business.
Customers
Customers buy goods and services produced by firms; they may be individuals or other businesses. Firms must understand and meet the needs of customers otherwise they will fail to make a profit or indeed survive. The customers are the main priority in a business as they are the people buying the product or service so they benefit from the business as they get the quality of the products and services, good customer services and a continuity of supply. The customers are the people that keep the business running. This influences the business as the customers determine whether it fails or succeed.
Government
The local and national government are interested in businesses as they will receive revenue from rates and taxes levied on the new business.
Suppliers
Suppliers get given regular contracts as the business is always ordering new stock which therefore increases the supplier’s profits which benefits their business. They also get prompt payments which mean that they will want to keep supplying goods for the business.
Local communities
The community can have an interest in the business as it can offer employment opportunities and places for the community to shop. This can affect the business as they will be selling more products which can increase their sales profit.
Pressure groups
May be concerned about the effect the business will have on the community in terms of noise, waste and litter.
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Internal stakeholders are the people within the business or organisation. This could include cleaning staff in a school.
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External Stakeholders are the people from the outside the business or organisation. They have an interest in the business but they do not work for the business. This could include parents of a local school.
I need to think about who will be interested in my business. Without my suppliers I would not be able to restock therefore my business could not function. I will need to keep my stakeholders happy and satisfied to keep my business operating efficiently.
The main stakeholders that would be interested or influenced by my business are:
- Family and Friends
- Suppliers
- Banks
- Customers
- Owners
Family and Friends
They would have an influence in my business as they would not want me to fail, they would be supportive in any decisions I make and may offer to help out in order for my business to succeed.
Suppliers
A supplier would have interest in my business due to the regular purchasing of stock. They would play a vital role in my business as they will be supplying me with the goods that I would then sell on.
Banks
The bank would have a huge amount of interest in my business, as they would be investing money in my business in the form of loans. A bank would want to know where the money they have invested is going and whether they will definitely get it back. The bank play a vital role in the start up of my business as without a loan I would not be able to purchase my initial stock or the actual vending equipment. If a bank thinks that my company is not profitable enough they will not want to invest due to the fact that I may not be able to pay them back.
Customers
Customers are the main stakeholder in my business. They have a vital influence on my business as they are the ones paying my wages and preventing my business from going into financial difficulties
Owners
My partner and I are the main stakeholders within my business. The reason behind this is that we are a small local community and do not need big investments. We will both have equal control over the business and both receive an equal share in the profits that we make. We will also have equal rights over any big decisions over anything to do with the business. We both have the same interest and influence when it comes to the business, which is to expand and make the business as successful as possible.
The main reason behind being in a partnership is because it lightens the workloads making it less stressful for the both of us and if one of us were to become ill or be involved in an accident there would always be somebody to run the business. Also being in a partnership gives us both diversity so it will be less frustrating when a problem or decision making arises as we are able to discuss our ideas and elaborate on them. Although there may be disagreement it is always good to have somebody else’s perspective.
We, as a business, want to respect the interests of all our stakeholders and this involves listening to them, responding to their concerns and being honest in our expectations.
There are many stakeholders involved in our business and they all have an interest which will influence what we do and how we respond.
Target market
Some businesses will create products that are aimed at all customers, but sometimes products are made for a certain group to target. For example, Head and Shoulders anti dandruff shampoo is targeted at people who have dandruff.
There are different strategies that are used, such as:
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Concentrated marketing – this is when a business focuses on a particular section of the market. For example there are many different types of shampoos such as anti dandruff shampoo, shampoos for children, shampoo for sensitive skin etc; this gives the customer more choice to choose from and to suit their needs.
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Differentiated marketing- this is when different products are marketed to different groups of people. For example, banks have financial services for different types of people so they will have different ones to suit teenagers, students, retired couples etc.
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Undifferentiated marketing –this is when businesses aim their products at different sectors of the market.
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Mass marketing –this strategy is comparable to undifferentiated marketing. The benefits are that the products are mainly sold to large number of consumers and also that the product can be marketing in different countries and still be noticed, this is known as global marketing.
To help our business survive we need to target the right consumers, the ones who will be interested in buying our products. This will be mostly tourists in the summer, mainly families with children.
Primary and secondary research
Market research is the process of collecting and analyzing information about the customers you want to reach, this is called your target market. In order for your business to make or break you need to carry out significant market research. When you have information about a particular market segment, geographic area or a customer preference you will be better prepared to make decisions to help your business. Primary and secondary market research can provide a valuable insight to help you shape your business which can also help you to expand it to make it more popular.
Primary research
Primary research delivers much more specific results than secondary research. Most primary research is gathered by:
- Interviews/questionnaires
- Observations
- Experimentations
Advantages of primary research
- It is a fast way of collecting information
- The information is easy to gather
- The information lets the person carrying out the research see if the product is worth bringing out.
Disadvantages of primary research
- It takes up to 6 weeks for some primary research to be sent back to the person who needs to research, for example postal surveys can take a long time.
- Some customers will find it time consuming filling out the questionnaire so they might reject the offer to do so.
- Customers may not trust telephone interviews as they do not know who they are speaking to.
In order to find out if my business would be popular with the general public I needed to do some primary research. I decided to make a questionnaire to give me a clearer idea of what my customer’s needs and wants are. It was handed out to 60 of my target audience around Vale Do Lobo, Almancil. To make it fair I made sure I asked the same amount of men that I did women, so therefore I ask 30 men and 30 women. Then to make sure I asked a varied of age groups I asked 10 boys age 15-25, 10 men age 26-40 and 10 men age 40+. I asked the same amount of men and women in the same ages as men. I tried to ask a range of tourist and locals to make the questionnaire fair.
Questionnaire
- Do you think the Almancil area would benefit from a milkshake bar?
- How much would you be willing to pay for a milkshake?
- £1.00-£1.50
- £1.51-£2.00
- £2.01-£3.50
- What type of topping would you want on top of your milkshake?
- Oreo
- Strawberry
- Chocolate sauce
- Banana
- What is your favourite milkshake flavour?
- Strawberry
- Banana
- Chocolate
- Vanilla
- Do you think this business has a unique selling point?
- How far do you live from Almancil?
- I live in Almancil
- 5km away
- 10km or more away
- I am on holiday
- Would you be a customer for my business?
Questionnaire analysis
51 people answered yes
9 people answered no
I needed to ask this question in the questionnaire to see if potential customers thought that the area actually would benefit from a milkshake bar. If most of the people doing the questionnaire said no then I would have to re think about my business plan and maybe change the idea. As this was not the case, as the majority of the people said yes I now know that setting up a milkshake bar is beneficial.
6 people said: £1-£1.50
14 people said: £1.51- £2
40 people said: £2.01 - £3.50
As I now knew that Almancil would benefit from a milkshake bar, I needed to see how much people would actually pay for one of my milkshakes. The results from this question show that the majority of people would pay £2.01 to £3.50 for a milkshake. From my secondary research I found out that one of my businesses competitors sell their milkshakes at £5.50, which I found a very high price for a milkshake. I have decided to stick to £3.50 for a milkshake and then any extra toppings or sauces would be an extra 20p. I think that this is a reasonable price and carrying out this primary research has helped the business decided what price is best for both the business partners and the customers.
5 people said chocolate
40 people said strawberry
5 people said banana
10 people said vanilla
The reason I asked this question was so that I would know how much of a certain product I would have to buy most of people opening up the business. From my results I can see that strawberry is the most popular so I would have to buy more strawberry than any other product. The graph above shows the strawberry is clearly the most popular and this is important to know.
47 said yes
13 said no
I chose to ask people this question because I wanted to know if the public thought that my business idea was unique so I asked them if they thought it had a unique selling point. From my results I found out the 47 people out of the 60 that answered the questionnaire, said that my business has a unique selling point. The majority of people said that my business idea was one of a kind as they is nothing out there like mine. This question helped me know that I have something different to offer than my competitors by the percentage of people saying I have a USP.
25 people answered they lived in Almancil
19 people answered that they lived 5km away
5 people answered that they lived 10km away
1 person said they were on holiday
This question was needed so that I could ask the next question. I needed to know how many people actually lived in the area that I was going to set up m business. The majority of the people that took the questionnaire live in Almancil or 5km away. This is good for my business as I know that the people taking my questionnaire have an interest in my business and are actually taking my questionnaire for a reason. For example someone that lived on the other side of Portugal could take my questionnaire and say that they would be a customer for my business but that would only mean they would buy milkshakes when they are in the Algarve on holiday. I needed to know that whoever was taking my questionnaire wasn’t on holiday as this would not help me as they would only be a customer for a few weeks of the year and not all year round.
All 60 people who answered my questionnaire said they would be a customer of my milkshake bar.
This question was crucial to ask the public as I wanted to know if I would get customers once I opened up the business. The people who live more than 10km away said they would still be a customer of my business and even the person who was on holiday.
45 people chose Oreos
15 people chose strawberries
4 people chose chocolate sauce
6 people chose banana
This question has given me a better understanding of what customers prefer on top of their milkshakes, and also when I first open the business I know what to have more of in stock. I also wanted to know this so I could advertise the more popular toppings and also get people to try the not so popular toppings.
My competitors:
The business is situated in a location where other restaurants are present; the Praça. This makes the business have competitors. La Creperie, which is situated in the Praça, sells a wide variety of products, such as crepes and light snacks. In the summer they sell smoothies and ice cream. This could give our company several competitions as both businesses are selling cold drinks to cool customers down during the hot days in the summer months. I had to carry out some primary research to find out what prices La Creperie sell their products at. There is a restaurant called “sandbanks” which sell milkshakes on part of their drinks menu. They are sold at a very high price of £5.50 each. I thought this price was a little high so I thought of lowering my price from around £2 - £3.50, which I found a good price from carrying out primary research. This price could attract more customers. If a family is sitting in Sandbanks and their children ask for a desert, they could tell them to wait till after dinner and they could get a milkshake from “shake-about”.
Secondary research
Secondary research is research that has already been carried out by someone else. Secondary date which can be available and found in the business can include:
- Research that already exists
- Sales figures
- Reports and accounts distributed by the companies
- Stock movements which provide up to date information of patterns on demand in the market
Secondary research can be collected from sources outside the business. Businesses could use this for their own market research.
- Information from competitors such as price lists and product specifications
- Businesses may use the internet to search for data outside their own business.
- General publication which is newspaper and magazine publications which businesses use for their market research.
- Retail audits - electronic point of sale (epos) which allows information to be collected easily at retail outlets and supermarkets.
My partner and I went down to Vale do Lobo to carry out research to help us with our business. We went to the main office and looked at the size of the area, how many houses and restaurants there are etc.
The size of the market:
Vale do Lobo is in a unique location, situated in the heart of the Algarve. It is the largest luxury resort of its kind in Portugal. There are currently 1500 homes in Vale do Lobo and there are plans for approximately 500 more. There are 15 restaurants situated in the resort, most of which are in the Praça, which is at the beach front, the most popular part of the resort, but none of which offer a milkshake bar.
The size of the market is fairly big as each house, holds on average, 6 people. 1500 times by 6 is 9000. That is a huge market to consider in for business and hopefully all these customers will bring our company vast amounts of business. In the peak seasons, July and August, the business will attract the majority of customers as the weather is at its highest and that is when customers, mainly tourists, want cold drinks whilst sitting on the beach. During the winter months the business needs to take into consideration that it will not get as many customers as it would in the summer months. There are businesses around which sell milkshakes such as McDonalds, Burger King, ZON Cinema and Don Camillus.
Growing market
As the recession is at its worst, there are obviously not as many people going on holiday as there was a few years ago. This puts businesses at a downfall as they are not getting as much business as they would like. If businesses are renting the shop that they are selling the product in then the rent would have probably gone up, this means that product prices have to go up, which means that customers have to pay more. As milkshakes are not considered to be a priority, more of a luxury, then the customer might be put off by the price of the milkshake, this results in no milkshake being bought, which means the business suffers. Portugal offers 3000 hours of sun each year; this is good for the business as they know that every year they are guaranteed customers to buy their products, mainly because milkshakes are bought in the hot weather.
My competitor strengths and weaknesses:
My competitors have many strengths and weaknesses that need to be considered when setting up my business.
- La Praça has been around for a few years now so many loyal customers know that it sells good food at reasonable prices. This means that La Creperie have loyal customers. This is one of their strengths as they always have customers, and also word of mouth gets around and more people know that it is a well set up business which sells good products. La Creperie is open for many hours during the day. It opens from 8 am till midnight. During the winter seasons it isn’t open for as many hours as it is out of the peak season so not as many tourists visit, therefore it isn’t needed to be open till midnight. It opens from 9am till 6pm. La Creperie do not sell milkshakes which benefits us but it is something that they are losing money from as milkshakes are quite cheap to make and if they sold these then they would be making a lot more money.
- Sandbanks have much strength which our business has to consider. Their restaurant is located right on the beach front in full view of the sea. This can attract more customers than if it was located at the back of the Praça. Sandbanks offer milkshakes on their drinks menu; this can be a downfall for us, because even though they are expensive and some people might consider waiting until after dinner when they can get a cheaper milkshake at our bar. But for some people they might not want the stress so they might just order it from sandbanks menu. This can enhance our profits as they may want to go to our milkshake bar instead.
Their product, price, place and promotion & unique selling point
My competitors sell the same product as me.They have a price, place and how they promote their product and also they have a unique selling point. Sandbanks sells 3 different types of milkshake, Strawberry, chocolate and banana. Sandbanks is situated at the front of the Praça, by the beach so it is in easy access and it is noticeable from the beach. You cannot order take outs from Sandbanks, you can only buy their product if you are sitting down having a meal or snack. McDonalds sell milkshakes at a relatively cheap price of 1.80 euro’s. They are powder and milk and are not as fresh as “Shake-about” milkshakes. They also sell McFlurrys which are not exactly the same as milkshakes but they are along the same lines as they are both made from ice cream and chocolate. These are priced at 1.50 euro’s. McDonalds are a well known franchise and they have a multi million pound advertising campaign which promotes their products well by advertising through billboards, television adverts, radio commercials and magazine advertisements. McDonalds are situated all around the Algarve such as Faro, Vilamoura, and Lagoa etc. but compared to other countries like England and America they have very little McDonalds restaurants. Most McDonalds now offer a free Wi-Fi service which attracts more customers if they know they can work from their laptop whilst drinking a milkshake. This can put our business at a disadvantage as we cannot offer that service. McDonalds has various selling points, one of them being they offer promotional foods.
SWOT analysis
SWOT analysis is a tactical planning technique used to weigh up the Strengths, Weaknesses, Opportunities, and Threats involved in a business venture. SWOT stands for:
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Strengths–these are the good points of the business. Such as what they are known for, how much money they make, making the customers come back etc.
My business is unique and innovative. We do not have much competition as there is only 1 other competition in the area and it is in a prime location.
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Weaknesses-these are the bad points in a business, and this is why the business could have a poor reputation for. This could include factors such as complaints, bad reputation due to the website, hardships etc.
Due to the recession we may not get as many customers as we hope for.
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Opportunities-these can be what the business wants to achieve when they improve on their weaknesses. This can include; the business growing online, creating new products or services, decreasing local unemployment rates etc.
We can grow and expand, if we find that we become very popular, (especially with tourists during the summer) we could open up another milkshake in a similar area.
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Threats- threats can happen when a business has not taken on new opportunities. Falling profits, complaints and rising costs can provoke these from happening.
There is the chance that the same business could open up and be bigger and better than us and also sell their milkshakes at a cheaper price.
Advantage of using a SWOT analysis
The advantage of using a SWOT analysis is that it can be a great help in the future as the businesses can understand what their weaknesses are to improve on them and turn them into strengths.
Customer profile
Having looked at my primary research I found that all 60 people that filled in my questionnaire said that they would come to my milkshake bar. I needed to do a customer profile to really show who my business is aimed at.
Age: Teenagers aged 13-17
Income: pocket money/part time job
Occupation: student
Location: mainly tourists in the summer/teenagers that live nearby
My business will mainly attract teenagers as that are what teenagers like. It would not suit babies and toddlers as there is too much chocolate and ice cream in the milkshakes, it wouldn’t attract the older generation as they are older and mostly like sitting in bars drinking coffee.
I found out from my research that some restaurants are too high priced for milkshakes, such as Sandbanks; therefore I will charge my customers a cheaper price in order for my business to be successful. As there are not many restaurants that sell milkshakes in the area it is a good idea to set up a bar which specifically sells only milkshakes.
Location
Location is important in a business as it increases sales and can affect the businesses overall performance. Before a business sets up it needs to make decisions about size and location and this is not always an easy decision to make. A factory is different from a retail outlet so you wouldn’t put a high street shop, for example Topshop in a Factory. Similarly you wouldn’t put Asda in a deserted and isolated area with minimum people, you would put it in a built up area where there are lots of customers to increase your sales. The location of my milkshake bar is in a well known built up area where there are many tourist during peak seasons. I feel that I will gain many customers from being where I am.
Price
Pricing your product right is important because if the customers think that it is priced too high then it may generate low sales and this could impact on the business. Similarly, as there is a credit crunch at the moment people haven’t got the amount of money that they use to have so they will be more carefully with their money. Similarly, if the product is priced to low customers will think that there is something wrong with the product. In this means, companies have to price the product right in order to get the right number of sales.
Discounts
The degree of competition that the business faces influences the price that it charges.